Document:

Exhibit

10.19

 

PLEDGE

AGREEMENT

 

 

In consideration of a loan made by Inverness Medical

Innovations, Inc., a Delaware corporation (together with any successor thereto,

the “Company”), to David Scott (“Borrower”), under the Promissory

Note dated December 4, 2001, and any renewals or extensions thereof made in the

sole discretion of the Company (“Note”), Borrower agrees as follows:

Section 1.  Pledge.  Borrower hereby pledges, assigns and

transfers to the Company, and grants to the Company a security interest in, the

following property (“Collateral”), to be held by the Company:

(a)           The

399,381 shares of Common Stock of the Company (each, together with any

successor securities, a “Share”) obtained upon the exercise of stock

options granted pursuant to a certain Non-Qualified Stock Option Agreement

dated as of August 15, 2001 between Borrower and the Company (the “Option

Agreement”) and held by Borrower, or any Permitted Transferee (as that term

is defined in the Option Agreement), and any securities owned in respect

thereof or in exchange therefor.

(b)           All

other securities, instruments and other property issued or accepted in

substitution for any of the foregoing.

(c)           All

proceeds of any and all of the Collateral.

Section 2.  Obligations.  This Agreement and the security interest

granted hereby secure the payment of all obligations of Borrower to the Company

under the Note (“Obligations”), and the Obligations of Borrower under

this Agreement, and any and all renewals or extensions thereof.  So long as any of the Obligations are

outstanding, unless and until Borrower shall be in default hereunder or there

shall be any default of any of the Obligations, Borrower shall retain all

rights to dividends and distributions and voting rights, if any, with respect

to the Collateral.  In the event the

Obligations shall be in default or in the event that Borrower shall be in

default under the terms hereof, the Company may, in its discretion, vote and

exercise all of the powers of an owner with respect to any of the relevant

Collateral.  Without limiting the

generality of the other remedies provided herein and in addition thereto, in

the event any of the Obligations shall be in default or upon any default by

Borrower hereunder, the Company after the occurrence of an Event of Default may

take all steps necessary to cause the Collateral to be transferred into the

name of the Company, including but not limited to taking steps necessary to

comply with restrictions on sale or transfer of the shares constituting such

Collateral, and in connection therewith Borrower appoints the Company such

Borrower’s attorney-in-fact to execute and deliver such offers, tender offers,

certificates, documents or instruments of every nature or description required

for the purpose of the transfer of such shares into the name of the Company, or

any other person.

If Borrower receives any cash distribution or dividend

in respect of any Collateral, Borrower may retain such cash distribution or

dividend as his own property unless prior to such receipt an Event of Default

has occurred, in which event Borrower shall accept same in trust for the

Company, and shall upon request deliver same immediately to the Company in the

form 

 

 

received, with Borrower’s

endorsement and/or assignment when necessary, to be held by the Company as

Collateral.

If Borrower receives any stock certificate or option

or deferred compensation right, whether as an addition to, in substitution of,

or in exchange for, any Collateral, or otherwise, Borrower shall accept same in

trust for the Company, and shall upon request deliver same immediately to the

Company in the form received, with Borrower’s endorsement and/or assignment

when necessary, to be held by the Company as Collateral.

Borrower is herewith delivering to the Company all

certificates or instruments representing or evidencing Collateral in suitable

form for transfer or delivery, or accompanied by duly executed instruments of

transfer or assignment to be held subject to the preceding paragraph.

Section 3.  Limitations

on Transfer.  Borrower acknowledges

that transfer of the Shares is subject to certain limitations under the Option

Agreement.  The obligation of the

Company to release certificates representing Shares to Borrower or his designee

hereunder shall in any event be subject to the requirements of the Option

Agreement.  Subject to such requirements

and the terms hereof, the Company shall release from this pledge

Non-Repurchasable Shares or Repurchasable Shares (as those terms are defined in

the Option Agreement) as designated by Borrower, provided that such Shares

shall remain subject to the Option Agreement to the extent applicable.

Section 4.  Representations

and Warranties.  Borrower represents

and warrants to the Company as follows:

(a)           Borrower

is, and (as to any substitute or additional Collateral) shall be, the sole

owner of the Collateral pledged by Borrower, free and clear of any lien,

security interest, option or other charge or encumbrance, except for (i) the

security interest created by this Agreement, (ii) certain restrictions under

the Option Agreement and (iii) restrictions imposed by applicable laws, and,

subject to the same exceptions, Borrower has and shall have the right to

transfer such Collateral and to grant a security interest therein to the

Company as provided in this Agreement.

(b)           No

effective financing statement or similar notice covering any Collateral pledged

by Borrower is or shall be on file in any recording office, and no other pledge

or assignment thereof has been made, or shall have been made, other than in

favor of the Company, except as the Company may approve.

Section 5.  Further

Action by Borrower.  Borrower shall,

at the expense of Borrower, promptly execute and deliver all further notices,

instruments and documents, including, without limitation, financing statements,

and take all such further action as may be reasonably necessary or reasonably

advisable or as the Company at any time may reasonably request, in order to

perfect, preserve and protect the security interest granted or purported to be granted

hereby or to enable the Company to exercise and enforce such rights, powers and

remedies with respect to the Collateral.

 

2

 

Section 6.  Preservation of Collateral.

(a)           The

Company shall give to the Collateral the same degree of care and protection

which it gives to its own property; provided, however, that the

Company shall have no liability to Borrower for any losses, costs, expenses or

damages due to any acts or omissions of third parties, or due to any acts of

God or other causes beyond its control. 

The Company shall have no duty to preserve any rights with respect to

any Collateral, including, without limitation, rights against prior parties, or

to take, or to notify Borrower of the need to take, any action respecting any

rights, privileges or options relating to any Collateral.  To replace any certificates, however,

Borrower shall not be required to supply any bond or other indemnity.

(b)           Borrower

shall furnish to the Company, promptly upon receipt thereof, copies of all

material notices, requests and other documents received by Borrower relating to

Collateral unless the same were sent by the Company.

(c)           Borrower

shall not (i) sell, assign, transfer or otherwise dispose of any Collateral, or

create or suffer to exist any lien, security interest, assignment by operation

of law or other charge or encumbrance on, or with respect to, any Collateral,

except for the security interest created by this Agreement and the rights,

remedies and restrictions imposed by the Option Agreement; or (ii) attempt any

action prohibited by paragraph (c)(i) of this Section 6.  Notwithstanding the foregoing, Borrower may

transfer Shares to Permitted Transferees pursuant to the Option Agreement or

following the vesting of such Shares provided such transfer is in accordance

with the Option Agreement; provided, however, that the Shares so

transferred shall remain subject to the security interest created by this

Agreement and any such Permitted Transferee(s) shall, as a condition to any

transfer, agree to be subject to the provisions of this Agreement.

Section 7.  Defaults.  A default (an “Event of Default”)

shall be deemed to have occurred hereunder if (a) Borrower fails in any

material respect to perform any material obligation hereunder, if any material

representation or warranty hereunder was untrue in any material respect when

made, or if any default or Event of Default by Borrower occurs under the Note

or any agreement evidencing, or constituting or granting security for, the

Obligations, and (b) the Company gives to Borrower written notice thereof and

such default shall not have been cured within fourteen (14) days or such

additional time as determined by the Board of Directors of the Company.

Section 8.  Remedies.  Upon and after the occurrence of any Event

of Default which is then continuing or which has not been cured within the time

period given for such cure:

(a)           The

Company may exercise its rights with respect to the Collateral, without regard

to the existence of any other security or source of payment for Obligations,

including without limitation the rights set forth in Section 2, and may

demand, sue for collection or make any other compromise or settlement with

respect to other rights and remedies provided for herein or otherwise available

to it, and the Company shall have all of the rights and remedies of a secured

party under the Uniform Commercial Code as in effect in the State of Delaware.

 

3

 

(b)           Except

as specifically reserved herein, Borrower waives all suretyship defenses at law

and in equity, including waste and impairment of Collateral, and further waives

the requirement of any demand and presentment. 

Twenty-one (21) days’ prior notice to Borrower at the address provided

below or at such other address as Borrower shall provide to the Company in

writing for such purpose, of the time and place of any public sale of

Collateral, or of the time after which any private sale or any other intended

disposition is to be made, shall constitute reasonable notification.

(c)           The

Company is authorized at any such sale (including without limitation any sale

to itself or any affiliate of the Company, the same being expressly authorized

and contemplated herein), if the Company deems it advisable to do so, in order

to comply with any applicable securities laws, to restrict the prospective

bidders or purchasers to persons who will represent and agree that they are

purchasing the Collateral for their own account for investment, and not with a

view to the distribution or resale thereof. 

Sales made subject to such restriction shall not, solely by reason

thereof, be deemed not to have been made in a commercially reasonable manner.

(d)           The

Company is specifically authorized, with respect to any Collateral that

consists of Shares, to acquire such Collateral itself or to transfer such

Collateral to any affiliate of the Company at a price equal to the Repurchase

Price as that term is defined in the Option Agreement.  Borrower expressly waives any requirement

that the Company conduct a public or private sale with respect to such Shares

and agrees that such a disposition is commercially reasonable.

(e)           In

case of any sale of all or part of the Collateral on credit for future

delivery, the Collateral so sold shall be retained by the Company until the

purchase price is paid.  The Company

shall incur no liability in case of the failure of the purchaser to pay for the

Collateral as so sold if the Collateral is recovered, or of the failure of the

Company to make any sale of Collateral after giving notice thereof, and in case

of any such failure, such Collateral may again be sold.

(f)            Subject

to the terms of the Note, all cash proceeds received by the Company in respect

of any sale, collection or other enforcement or disposition of Collateral shall

be applied (after deduction of any amounts payable to the Company for

reasonable expenses of the sale, collection or disposition of Collateral)

against Obligations in such order as the Company shall elect.  Upon payment in full of all Obligations,

Borrower shall be entitled to the return of all Collateral pledged by him and

all proceeds thereof, which have not been used or applied toward the payment of

Obligations as herein authorized.

Section 9.  Waivers

and Remedies.  Except as otherwise

provided herein or by law, Borrower waives presentment, demand, notice and

protest, notice of acceptance of this Agreement, and except as provided in

Section 8(b) notice of all action by the Company in reliance hereon.  No failure by the Company to exercise, no

delay by the Company in exercising, and no single or partial exercise of, any

right, remedy or power hereunder or under any other agreement relating to the

Obligations or to Collateral shall operate as a waiver thereof, or of any other

right, remedy or power at any time.  No

amendment, modification or waiver of any provision of this Agreement shall be

effective unless contained in a writing signed by the 

4

 

Company.  Any

such waiver or consent shall be effective only in the specific instance and for

the specific purpose for which given. 

The rights, remedies and powers of the Company and Borrower, not only

hereunder, but also under any promissory note or notes of Borrower held by the

Company, any other agreements of Borrower with the Company and applicable law,

are cumulative and may be exercised successively, concurrently or

alternatively.

Section 10.  Term;

Binding Effect.  This Agreement

shall remain in full force and effect until payment and satisfaction in full of

all Obligations, shall be binding upon Borrower and the heirs, legatees, legal

representatives and assigns of Borrower, including Permitted Transferees, and

shall inure to the benefit of the Company and its successors and assigns.  Notwithstanding the foregoing, the Company

may terminate this Agreement and release the Collateral, or may accept

substitute Collateral, at any time in its sole discretion without in any way

affecting the nonrecourse nature of a portion of the Obligations as provided in

the Note.

Section 11.  Governing

Law.  This Agreement shall be

governed by and construed in accordance with the laws of the State of Delaware

without regard to conflict of law principles, except to the extent that the

perfection of the security interest granted hereby in respect of any item of

Collateral may be governed by the law of another jurisdiction.  Unless otherwise defined herein, all words

and terms used in this Agreement shall have the meanings provided in the

Uniform Commercial Code of the state of the jurisdiction of incorporation of

the Company (including its successor as issuer of the Shares).  If any provision of this Agreement, or the

application thereof to any person or circumstance, is held invalid, such

provision shall be deemed to be modified to comply with applicable law or if

not able to be so modified, shall be deemed to be severed from the Agreement,

the remaining provisions of which to be valid and enforceable.

Section 12.  Signatures.  This Agreement may be executed in

counterparts.

Section 13.  Headings.  The captions in this Agreement have been

included for reference only and shall not define or limit the provisions

hereof.

[SIGNATURE PAGE FOLLOWS]

 

5

 

EXECUTED as of the date set forth below.

December 4, 2001                                                                BORROWER:

  /s/ David

Scott        

Name:  David Scott

COMPANY:

INVERNESS MEDICAL

INNOVATIONS, INC.

By: /s/ Duane L.

James       

        Name: Duane L. James

        Title: Vice President and TreasurerEXECUTION COPY

Exhibit

10.26

 

EXECUTION

COPY

 

WARRANT

AGREEMENT

 

between

 

INVERNESS

MEDICAL INNOVATIONS, INC.

 

and

 

RBS

MEZZANINE LIMITED

 

 

Dated as

of December 20, 2001

 

 

 

 

 

	

   

  	

   

  	

   

  	

  Page

  
	

  ARTICLE I

  	

  CERTAIN DEFINITIONS AND

  TERMS

  	

   

  	

  1

  
	

   

  	

   

  	

   

  
	

  Section 1.01. 

  	

  Definitions

  	

   

  	

  1

  
	

   

  	

   

  	

   

  	

   

  
	

  ARTICLE II

  	

  ISSUANCE

  OF WARRANTS

  	

   

  	

  2

  
	

   

  	

   

  	

   

  
	

  Section 2.01. 

  	

  Issuance of Warrants

  	

   

  	

  2

  
	

   

  	

   

  	

   

  	

   

  
	

  ARTICLE III

  	

  REPRESENTATIONS

  AND WARRANTIES OF THE COMPANY

  	

   

  	

  2

  
	

   

  	

   

  	

   

  
	

  Section

  3.01.

  	

  Authorization

  and Enforceability 

  	

   

  	

  2

  
	

  Section

  3.02

  	

  Private

  Offering by the Company

  	

   

  	

  2

  
	

  Section

  3.03.

  	

  Authorized

  Capital Stock

  	

   

  	

  2

  
	

  Section

  3.04. 

  	

  Percentage of

  Common Equity

  	

   

  	

  3

  
	

  Section 3.05. 

  	

  Mezzanine Loan Facility Representations

  and Warranties

  	

   

  	

  3

  
	

   

  	

   

  	

   

  	

   

  
	

  ARTICLE IV

  	

  REPRESENTATIONS OF PURCHASER

  	

   

  	

  3

  
	

   

  	

   

  	

   

  
	

  Section

  4.01. 

  	

  Representations

  of Purchaser

  	

   

  	

  3

  
	

   

  	

   

  	

   

  	

   

  
	

  ARTICLE V

  	

  COVENANTS

  	

   

  	

  3

  
	

   

  	

   

  	

   

  
	

  Section 5.01. 

  	

  Observer Rights

  	

   

  	

  3

  
	

  Section

  5.02. 

  	

  Bank

  Regulatory Requirements

  	

   

  	

  3

  
	

   

  	

   

  	

   

  	

   

  
	

  ARTICLE VI

  	

  MISCELLANEOUS

  	

   

  	

  4

  
	

   

  	

   

  	

   

  
	

  Section 6.01. 

  	

  Notices

  	

   

  	

  4

  
	

  Section 6.02.

  	

  Headings

  	

   

  	

  4

  
	

  Section 6.03. 

  	

  Successors and

  Assigns

  	

   

  	

  4

  
	

  Section 6.04. 

  	

  Severability

  	

   

  	

  4

  
	

  Section 6.05. 

  	

  GOVERNING LAW

  	

   

  	

  4

  
	

  Section 6.06.

  	

  Amendments

  	

   

  	

  5

  
	

  Section 6.07. 

  	

  No Stockholder

  Rights

  	

   

  	

  5

  
	

   

  	

   

  	

   

  
	

  SCHEDULE

  I TO WARRANT AGREEMENT 

  Warrants, Options or Other Rights for the Purchase or Acquisition of

  Capital Stock of the Company

  	

   

  	

  SI-1

  
	

   

  	

   

  	

   

  
	

  SCHEDULE

  II TO WARRANT AGREEMENT 

  Notices

  	

   

  	

  SII-1

  
	

   

  	

   

  	

   

  
	

  EXHIBIT A TO WARRANT AGREEMENT Form of Warrant

  	

   

  	

  E-1

  
						

 

 

-i-

 

 

WARRANT

AGREEMENT

 

This WARRANT AGREEMENT is entered into as of

December 20, 2001 by and between INVERNESS

MEDICAL INNOVATIONS, INC., a Delaware corporation (the “Company”),

and RBS MEZZANINE LIMITED, a

company organized pursuant to the laws of the United Kingdom (“Purchaser”).

 

WHEREAS,

concurrently with the execution and delivery of this Agreement, the Company

will issue warrants to purchase 65,000 shares of its common stock to Purchaser

in consideration of the provision by Purchaser of a mezzanine loan facility to

the Company (as amended, restated, supplemented or otherwise modified from time

to time, the “Mezzanine Loan Facility”);

 

NOW, THEREFORE, the parties hereto agree as

follows:

 

ARTICLE I

CERTAIN DEFINITIONS AND TERMS

 

Section 1.01.          Definitions. 

As used in this Agreement, the following terms have the meanings

indicated:

 

“Business Day”

shall mean any day which is neither a Saturday or Sunday nor a legal holiday on

which banks are authorized or required to be closed in New York, New York.

 

 “Commission” shall mean the Securities

and Exchange Commission, or any other Federal agency at the time administering

the Securities Act or the Trust Indenture Act of 1939, as amended, as the case

may be.

 

“Common Stock”

shall mean the shares of common stock, $.001 par value per share, of the

Company.

 

“Current Market

Price” shall mean, at any date, the last reported sale price per share of a

share of Common Stock on the New York Stock Exchange trading day preceding that

date.  The “last reported sale price”

for any day shall be (i) if the Common Stock is listed or admitted for

trading on any national securities exchange, the last sale price, or the

closing bid price if no sale occurred, of the Common Stock on the principal

securities exchange on which the Common Stock is listed, or (ii) if not

listed or admitted for trading as described in clause (i) above, the last

reported sale price of the Common Stock on the National Market System of the

National Association of Securities Dealers, Inc. Automated Quotation System, or

any similar system of automated dissemination of quotations of securities

prices then in common use, if so quoted, or (iii) if not quoted as

described in clause (ii) above, the last bid quotation for the Common

Stock as reported by the National Quotation Bureau Incorporated if at least two

securities dealers have inserted bid quotations for the Common Stock.  If none of the conditions set forth above is

met, the Current Market Price of the Common Stock on any day shall be the fair

market value of the Common Stock as determined by any firm of independent

public accountants of internationally recognized standing selected by the Board

of Directors of the Company and reasonably acceptable to the Holder (the fees

and expenses of any such firm to be paid by the Company).

 

“Holder”

shall mean any beneficial owner of (i) any Warrant Share or (ii) any

Warrant.

 

“Mezzanine Loan

Facility” shall have the meaning set forth in the second paragraph of this

Agreement.

 

 

 

“Person”

shall mean an individual, partnership, corporation, trust or unincorporated

organization, or a government or agency or political subdivision thereof.

 

“Securities Act”

shall mean the Securities Act of 1933, as amended.

 

“Warrant Shares”

shall mean shares of Common Stock issued upon the exercise of any of the

Warrants.

 

“Warrants”

shall have the meaning set forth in Section 2.01.

 

ARTICLE II

ISSUANCE OF WARRANTS

 

Section 2.01.          Issuance of Warrants. 

The Company shall issue, sell and deliver to Purchaser, promptly

following the execution and delivery of this Agreement and the closing of the

Mezzanine Loan Facility, one or more warrants, each substantially in the form

attached hereto as Exhibit A, to purchase up to an aggregate of 65,000

Warrant Shares, subject to adjustment as provided therein (such warrants,

including any replacements, amendments, supplements or other modifications

thereof, being referred to collectively as the “Warrants”).

 

ARTICLE III

REPRESENTATIONS

AND WARRANTIES OF THE COMPANY

 

The Company

represents and warrants to Purchaser as follows:

 

Section 3.01.          Authorization and Enforceability. 

The execution and delivery of this Agreement and the issuance and sale

of the Warrants has been duly authorized by all necessary corporate action on

the part of the Company and this Agreement and the Warrants constitute the

legal, valid and binding obligations of the Company enforceable against the

Company in accordance with the terms hereof and thereof, 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).

 

Section 3.02.          Private Offering by the Company. 

Neither the Company nor anyone acting on its behalf has offered the

Warrants, or any similar securities, for sale to, or solicited any offer to buy

any of the Warrants from, or otherwise approached or negotiated in respect thereof

with, any Person other than Purchaser. 

Neither the Company nor anyone acting on its behalf has taken, or will

take, any action that would subject the offer, issuance or sale of the Warrants

to the registration requirements of the Securities Act.

 

Section 3.03.          Authorized Capital Stock.  The authorized capital stock of the Company consists of (a)

5,000,000 shares of preferred stock, $.001 par value per share, of which class

2,666,667 are designated Series A Convertible Preferred Stock, and of which series

1,828,333 shares will be issued and outstanding immediately after the Closing

(as defined in Section 3.04), and (b) 50,000,000 shares of Common Stock,

$.001 par value per share, of which 7,779,197 shares were issued and

outstanding on December 17, 2001.  There

have been no material issuances of shares of Common Stock since that date.  All of the issued and outstanding shares of

Common Stock have been duly authorized and validly issued and are fully paid

and non-assessable.  Except as set forth

on Schedule I hereto, the Company does not 

 

2

 

have outstanding

any warrants, options or other rights for the purchase or acquisition of shares

of its capital stock other than the Warrants. 

The Board of Directors of the Company has duly reserved for issuance

upon exercise of the Warrants 65,000 shares of Common Stock.  No stockholder of the Company or any other

Person is entitled to preemptive or similar rights that have not been properly

waived or complied with, with respect to the shares of Common Stock that are

issuable upon exercise of the Warrants and, if and when issued upon exercise of

the Warrants in accordance with the provisions thereof, such shares will be

validly issued, fully paid and non-assessable.

 

Section 3.04.          Percentage of Common Equity. 

The shares of Common Stock issuable on exercise of the Warrants

represent in the aggregate .4622% of the Common Stock on a fully diluted basis,

computed after giving effect to the issuance of the Warrants and consummation

of the transactions contemplated by the Mezzanine Loan Facility (the “Closing”).

 

Section 3.05.          Mezzanine

Loan Facility Representations and Warranties.  Each of the representations and warranties of the Company set

forth in the loan agreement for the Mezzanine Loan Facility are true and

correct as of the date hereof.

 

ARTICLE IV

REPRESENTATIONS OF PURCHASER

 

Section 4.01.          Representations of Purchaser. 

Purchaser represents that it is purchasing the Warrants for its own

account and not with a view to the distribution thereof.  Purchaser further represents that it is an

accredited investor within the meaning of Rule 501(a) under the Securities

Act.  Purchaser acknowledges that the

offering of the Warrants pursuant to this Agreement and the Warrant Shares

pursuant to the Warrants 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.

 

ARTICLE V

COVENANTS

 

Section 5.01.          Observer Rights. 

The Company agrees that one representative of the Holders, collectively,

shall have the right to receive all notices of and to attend (by any of their

authorized representatives) at such Holders’ expense all meetings of the

Company’s Board of Directors and any committees thereof.  The Company shall provide to the

representative of the Holders copies (reasonably promptly) of all minutes of

such meetings along with copies of any items distributed to the members of the

Board of Directors at or prior to such meeting, whether or not such

representative of the Holders attends such meeting; provided, however,

that the Company reserves the right to exclude such representative from access

to any material or meeting or portion thereof if (i) the Company’s Board of

Directors determines in good faith upon advice of counsel that failure to so

exclude such representative could jeopardize the attorney-client privilege with

respect to material information or (ii) such material or such meeting or

portion thereof relates directly or primarily to any existing or proposed legal

proceeding or contractual arrangement with any Holder or any affiliate of a

Holder.  The rights of the Holders and

the obligations of the Company under this Section 5.01 shall terminate upon the

earlier to occur of the (x) expiration of the Warrants, or (y) first

date that the Holders no longer hold, or have rights to purchase, at least

5,000 Warrant Shares in the aggregate.

 

Section 5.02.          Bank Regulatory Requirements. 

The Company shall take all actions reasonably requested by any Holder

(including, without limitation, creating a new series of common stock of the

Company that is not voting and authorizing the issuance thereof to any such

Holder and the entering into 

 

3

 

of an appropriate

exchange agreement to permit any such Holder to exchange such shares for voting

common shares upon a sale thereof) in order to permit such Holder to reduce the

percentage of the Company’s voting stock held by such Holder to such percentage

that would not be in violation of laws applicable to such Holder including,

without limitation, Regulation Y promulgated by the Board of Governors of

the U.S. Federal Reserve System.  Notwithstanding

the foregoing, or anything else contained herein to the contrary, the Company

shall not be required to undertake any action which, in the reasonable judgment

of the Board of Directors of the Company, would materially and adversely affect

the Company’s business or materially impair the Company’s ability to raise

future financings.

 

ARTICLE VI

MISCELLANEOUS

 

Section 6.01.          Notices. 

All notices and communications provided for hereunder shall be in

writing and sent (i) by facsimile if the sender on the same day sends a

confirming copy of such notice by a recognized international express delivery

service (charges prepaid), or (ii) by a recognized international express

delivery service (specifying delivery within two Business Days, with charges

prepaid).  Any such notice must be sent:

 

(i)            if to a Holder or its nominee, to

such Holder at the address specified for such communications in Schedule II,

or at such other address as such Holder shall have specified to the Company in

writing, or

 

(ii)           if to the Company, at 51 Sawyer Road,

Suite 200, Waltham, Massachusetts 02453 or to such other address as the Company

may designate to the Holders in writing.

 

Notices under this

Section 6.01 will be deemed given only when actually received.

 

Section 6.02.          Headings. 

The table of contents and the descriptive headings of the various

sections of this Agreement are for convenience only and shall not affect the

meaning or construction of the provisions hereof.

 

Section 6.03.          Successors and Assigns. 

This Agreement shall be binding upon the Company and its respective

successors and assigns and shall inure to the benefit of Purchaser and their

successors and permitted assigns, including each successive Holder.

 

Section 6.04.          Severability. 

Should any part of this Agreement for any reason be declared invalid or

unenforceable, such decision will not affect the validity or enforceability of

any remaining portion, which remaining portion will remain in force and effect

as if this Agreement had been executed with the invalid or unenforceable

portion thereof eliminated and it is hereby declared the intention of the

parties hereto that they would have executed the remaining portion of this

Agreement without including therein any such part or portion which may, for any

reason, be hereafter declared invalid or unenforceable.

 

Section 6.05.          GOVERNING LAW. 

THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND

THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF

DELAWARE, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF SUCH STATE THAT WOULD REQUIRE

THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

 

4

 

Section 6.06.          Amendments. 

This Agreement may be amended only by an instrument in writing executed

by the Holders.

 

Section 6.07.          No Stockholder Rights. 

This Agreement and the Warrant in and of itself shall not entitle a

holder of a Warrant to any voting rights or other rights as a stockholder of

the Company prior to the exercise of the Warrant in accordance with its terms.

 

[Signatures are on

the following page.]

 

 

5

 

IN WITNESS

WHEREOF, the parties hereto, intending to be legally bound hereby, have duly

executed this Agreement on the date first above written.  This Agreement may be executed in any number

of counterparts, each executed counterpart constituting an original but all

together only one agreement.

 

	

  .

  	

  INVERNESS MEDICAL

  INNOVATIONS, INC

  
	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ Paul T. Hempel

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
	

   

  	

   

  

 

	

   

  	

  RBS MEZZANINE LIMITED

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Alison M. Rose

  
	

   

  	

   

  	

  Name:  Alison M. Rose

  
	

   

  	

   

  	

  Title:  Director

  
	

   

  	

   

  

 

6

 

SCHEDULE

I TO WARRANT AGREEMENT

Warrants,

Options or Other Rights for the Purchase

or

Acquisition of Capital Stock of the Company

 

Warrants

Warrants to purchase an

aggregate of 55,189 shares of Common Stock, par value $.001 per share (“Common

Stock”) have been issued in connection with that certain Note and Warrant

Purchase Agreement, dated as of December 19, 2001, between the Company and the

Investors party thereto (the “Note and Warrant Purchase Agreement”).

 

As of December 17 2001,

warrants to purchase an aggregate of 117,629 shares of Common Stock were

assumed and remain outstanding pursuant to the Agreement and Plan of Merger

among Inverness Medical Technology, Inc., Johnson & Johnson, and Sunrise

Acquisition Corp. dated May 23, 2001.

 

A warrant to purchase

500,000 shares of Common Stock has been issued to Ron Zwanziger as of the

Closing.

 

Options

Options to purchase and

aggregate of 1,486,794 shares of Common Stock issued pursuant to the Company’s

2001 Stock Option and Incentive Plan (the “Plan”).  A total of 2,655,890 shares of Common Stock remain reserved for

issuance under the Plan.

 

As of December 17, 2001,

options to purchase and aggregate of 903,317 shares of Common Stock were

assumed and remain outstanding pursuant to the Agreement and Plan of Merger

among Inverness Medical Technology, Inc., Johnson & Johnson, and Sunrise

Acquisition Corp. dated May 23, 2001.

 

Convertible

Securities

Subordinated promissory

notes, which are convertible into shares of Series A Preferred Stock, and on

which interest is payable, at the Company’s election, in shares of Common

Stock, all on the terms and conditions set forth therein (the “Notes”), have

been issued pursuant to the Note and Warrant Purchase Agreement.  The aggregate principal amount of the Notes

is approximately $20,000,000.00.

 

1,828,333 shares of

Series A Convertible Preferred Stock, par value $.001 per share, have been

issued in connection with that certain Stock Purchase Agreement, dated as of

December 19, 2001, between the Company and the Investors thereto.

 

 

SI-1

 

 

SCHEDULE

II TO WARRANT AGREEMENT

Notices

 

RBS MEZZANINE LIMITED

Level 7, 135 Bishops Gate

London England

EC2M 3UR

Fax:  +44 207 375 5202

Contact:  David Beadle

 

SII-1

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