AMENDED AND RESTATED INVESTOR
RIGHTS AGREEMENT
THIS AMENDED AND
RESTATED INVESTOR RIGHTS AGREEMENT (this “ Agreement
”) is made and entered into on April 29, 2009 and
effective as of April 30, 2009, by and between Inverness
Medical Innovations, Inc., a Delaware corporation (the “
Company ”), each of the other parties signatory from
time to time hereto (the “ Investors ”), and for
purposes of the co-sale rights in Sections 9 and 11 only, Ron
Zwanziger, the Chief Executive Officer of the Company (the “
Company Executive ”).
WHEREAS, the
Company, ABON BioPharm (Hangzhou) Co., Ltd., a Chinese limited
liability company (“ ABON ”), ACON Biotech
(Hangzhou) Co., Ltd., a wholly foreign owned enterprise established
in the People’s Republic of China (“ ACON Bio
”), AZURE Institute, Inc., a California corporation (“
AZURE ”), ACON Laboratories, Inc., a California
corporation (“ ACON Labs ”), GENCLONN BIOTECH
(HANGZHOU) CO., LTD., a Chinese limited liability company
(“ Genclonn ”), LBI Inc., a British Virgin
Islands company (“ LBI ”), New Hampton Inc., a
Cayman Islands company (“ New Hampton ”), NJI,
Inc., a Cayman Islands company (“ NJI ”),
Oakville Hong Kong Co., Ltd., a Hong Kong company (“
Oakville ”), Sincerita Ltd., a British Virgin Islands
limited liability company (“ Sincerita ”),
Karsson Overseas Ltd., a British Virgin Islands Company (“
Karsson ”), and Rich Horizons International Ltd., a
British Virgin Islands company (“ Rich Horizons
”) (collectively, the “ ACON Entities ”),
Feng Lin and Jixun Lin (the “ Management Team ”)
(collectively with the ACON Entities, the “ Seller
Entities ” and the Seller Entities together with their
Affiliates, the “ SE Investors ”) are parties to
various agreements relating to the Company’s purchase of the
First Territory Business and the New Facility (as such terms are
defined in the First Territory and New Facility Acquisition
Agreement).
WHEREAS, in
connection with the First Closing and the New Facility Closing and
pursuant to the acquisition agreement dated as of February 24,
2006, by and among the Company and the Seller Entities named on the
signature pages thereto (the “ First Territory and New
Facility Acquisition Agreement ”), the Investors received
shares of common stock of the Company, par value $.001 per share
(the “ Common Stock ”) as consideration for the
sale of the First Territory Business and the New
Facility.
WHEREAS, the
Company, certain of the Investors (the “ Prior
Investors ”) and the Company Executive previously entered
into an Investor Rights Agreement dated March 31, 2006 (the
“ Prior Agreement ”), the execution and delivery
of which were inducements and conditions precedent to the
consummation of the transactions contemplated in, including the
issuance by the Company of the Common Stock under, the First
Territory and New Facility Acquisition Agreement.
WHEREAS, the
Company, ACON Labs, AZURE, Oakville, ACON Bio and Karsson entered
into an acquisition agreement dated as of March 16, 2009 (the
“ Second Territory Acquisition Agreement ”)
pursuant to which the Company has agreed to purchase from certain
of the Seller Entities, and such Seller Entities have agreed to
sell to the Company, the First
Amended and Restated Investor
Rights Agreement
Territory
Business in all other territories other than the First Territory
(the “ Second Territory Business ”).
WHEREAS, in
connection with the purchase and sale of the Second Territory
Business under the Second Territory Acquisition Agreement, the
Company has agreed to deliver the Common Stock portions of the
consideration for the Second Territory Business in three separate
installments, (a) as provided in Section 3.1(a)(ii) of
the Second Territory Acquisition Agreement, (b) on the First
Subsequent Payment Date (as defined in the Second Territory
Acquisition Agreement) and (c) on the Second Subsequent
Payment Date (as defined in the Second Territory Acquisition
Agreement). Each of such dates on which an installment is due is
referred to herein individually as a “ Payment Date
” and collectively as the “ Payment Dates
”.
WHEREAS, in
connection with the foregoing, the Company may issue shares of
Common Stock to the Investors on one or more of the Payment Dates
(each, an “ Issuance ” and the date of such
Issuance, an “ Issuance Date ”).
WHEREAS, the
Investors or other holders of Registrable Securities issued under
the First Territory and New Facility Acquisition Agreement have
sold or otherwise disposed of all such Registrable Securities prior
to the date hereof and such Persons have no rights as to the
registration for resale of such Registrable Securities.
WHEREAS, the
Investors listed on the signature pages hereto represent all of the
Prior Investors party to the Prior Agreement and none of such
Investors, or any other Person, holds any Registrable Securities
issued under the First Territory and New Facility Acquisition
Agreement.
WHEREAS, the
Company, the Investors, and the Company Executive wish to amend and
restate the Prior Agreement as set forth herein to provide, among
other things, that the shares of Common Stock to be acquired by the
Investors on each Payment Date, if any, shall be Registrable
Securities hereunder.
WHEREAS, the
execution and delivery of this Agreement by the Company Executive
is for the exclusive and sole purpose of enforcing Section 9
of this Agreement.
NOW, THEREFORE, in
consideration of the mutual promises and agreements set forth
herein and in the First Territory and New Facility Acquisition
Agreement and the Second Territory Acquisition Agreement, and other
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as
follows:
1.
Certain Definitions . Unless otherwise set forth in this
Agreement, all capitalized terms shall have the meaning set forth
in the First Territory and New Facility Acquisition Agreement. As
used in this Agreement, the following terms shall have the
following respective meanings:
“
Affiliate ” of a Person shall mean any person or
entity which directly or indirectly controls, is controlled by, or
is under common control with such person or entity.
Amended and Restated Investor
Rights Agreement
2
“ Change
of Control ” shall refer to any (i) merger or
consolidation of the Company, other than a merger or consolidation
in which the holders of capital stock of the Company immediately
prior to such merger or consolidation continue to hold, directly or
indirectly, greater than fifty percent (50%) of the voting
power of the surviving or acquiring entity after such merger or
consolidation, (ii) sale, lease, exchange or other disposition
of all or substantially all of its property and assets or
(iii) similar transaction or series of transactions involving
an acquisition of the Company.
“
Company ” shall have the meaning set forth in the
preamble and shall include the Company’s successors by
merger, acquisition, reorganization or otherwise.
“
Closing ” shall refer to each of the First Closing,
the New Facility Closing, the date on which payment of a portion of
the consideration for the Second Territory Business is due under
Section 3.1(a)(ii) of the Second Territory Acquisition
Agreement, the First Subsequent Payment Date (as defined in the
Second Territory Acquisition Agreement) and the Second Subsequent
Payment Date (as defined in the Second Territory Acquisition
Agreement).
“ Closing
Date ” shall refer to the date on which each Closing
occurs, as applicable.
“
Commission ” shall mean the United States Securities
and Exchange Commission, or any other federal agency administering
the Securities Act and the Exchange Act at the time.
“ Common
Stock ” shall mean the common stock and any other common
equity securities issued by the Company, and any other shares of
stock issued or issuable with respect thereto (whether by way of a
stock dividend or stock split or in exchange for or upon conversion
of such shares or otherwise in connection with a combination of
shares, recapitalization, merger, consolidation or other corporate
reorganization).
“
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended from time to time, or any similar successor
federal statute, and the rules and regulations of the Commission
thereunder.
“
Person ” shall mean an individual, a corporation, a
partnership, a joint venture, a trust, an unincorporated
organization, a limited liability company or partnership, a
government and any agency or political subdivision
thereof.
“
Registrable Securities ” shall mean (i) any
shares of Common Stock issued to the Investors in connection with
any Closing, and (ii) any other securities issued or issuable
with respect to any such shares described in clause (i) above
by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or
other reorganization.
“
Registration Expenses ” shall mean the expenses so
described in Section 5 hereof.
“
Securities Act ” shall mean the Securities Act of
1933, as amended from time to time, or any similar successor
federal statute, and the rules and regulations of the Commission
thereunder.
Amended and Restated Investor
Rights Agreement
3
“
WKSI ” shall mean a well-known seasoned issuer as
defined under Rule 405 of the Securities Act.
(a)
Shelf Registration. After each relevant Issuance Date,
subject to the terms and conditions of this Agreement, the Company
shall use commercially reasonable efforts as described in this
Section to register for resale on a delayed or continuous basis the
Registrable Securities on a shelf registration statement on
Form S-3 (or any successor form) pursuant to Rule 415
under the Securities Act (together with any other form that the
Company may be able to use in order to register the Common Stock in
the event a Form S-3 registration statement is not then
available to the Company, the “ Registration Statement
”). The Company shall cause such Registration Statement to be
filed with the Commission as soon as reasonably practicable after
each relevant Issuance Date, which shall in no event be more than
three (3) business days after each Issuance Date occurring
under the Second Territory Acquisition Agreement. If the Company is
eligible as a WKSI at the time of filing, such Registration
Statement shall utilize the automatic shelf registration statement
process under Rule 415 and Rule 462 under the Securities
Act, and in connection therewith, the Company shall make any other
filings with the Commission required to be made prior to the
effectiveness of the Registration Statement, including, if
required, a Current Report on Form 8-K with respect to the closing
of the transactions contemplated by the Second Territory
Acquisition Agreement and all financial statements required to be
included therein; provided , that the Seller Entities (as
defined in the Second Territory Acquisition Agreement) have
fulfilled their obligations under Section 6.4 of the Second
Territory Acquisition Agreement to provide such financial
statements for such Form 8-K filing with the Commission, solely to
the extent necessary. If the Company is not eligible as a WKSI at
the time of filing, the Company shall use commercially reasonable
efforts to cause the Registration Statement to be declared
effective as soon as reasonably practicable after the filing
thereof, but in any event within one hundred and
thirty-five (135) days after each relevant Issuance Date;
provided , that the Investors provide the Company with all
information required to be provided by the second paragraph of
Section 2(c) below.
(b)
Piggyback Registration . If the Company at any time proposes
to register any of its securities under the Securities Act for sale
to the public it will give written notice at the applicable address
of record to each holder of Registrable Securities of its intention
to do so; provided , however , that no such notice or
registration shall be required for (i) a registration effected
solely to implement an employee benefit plan, (ii) a
transaction to which Rule 145 of the Securities Act is
applicable, (iii) a registration solely in connection with a
merger or acquisition not involving the Investors or their
Affiliates, (iv) registration effected by a
“shelf” registration statement on Form S-3 or the
other appropriate form for a primary offering by the Company (with
no selling stockholders) to be made on a continuous basis pursuant
to Rule 415 of the Securities Act (or such successor rule or
similar provision therein effect), (v) a registration
statement on Form S-4, S-8 or another form not available for
registering the Registrable Securities for sale to the public or
(vi) a registration effecting a primary offering of the
Company’s securities without any selling stockholders
(whether or not such registration is an underwritten offering).
Upon the written request of any of such holders of the Registrable
Securities, given within twenty (20) days after receipt by
such Person of such notice, the
Amended and Restated Investor
Rights Agreement
4
Company shall,
subject to the limits contained in this Section 2(b), use its
commercially reasonable efforts to cause all such Registrable
Securities of the requesting holders to be registered under the
Securities Act and qualified for sale under any state securities or
“blue sky” law which such holders may reasonably
request, all to the extent required to permit such sale or other
disposition of their Registrable Securities. If a holder of
Registrable Securities decides not to include all of its
Registrable Securities in any Registration Statement filed by the
Company pursuant to this Section 2(b), such holder of
Registrable Securities shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent
Registration Statement or Registration Statements as may be filed
by the Company with respect to offerings of its securities, all
upon the terms and conditions set forth in this
Agreement.
(c)
Postponement of Effectiveness. Upon receipt of any notice (a
“ Suspension Notice ”) from the Company of the
happening of any event which makes any statement made or
incorporated in the Registration Statement or related prospectus
untrue or which requires the making of any changes in such
Registration Statement or prospectus (or the information
incorporated therein) so that they will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein in the light of the circumstances under which they were
made not misleading, each holder of Registrable Securities
registered under such Registration Statement shall forthwith
discontinue disposition of Registrable Securities pursuant to such
Registration Statement until such holder’s receipt of the
copies of the supplemented or amended prospectus or until it is
advised in writing (the “ Advice ”) by the
Company that the use of the prospectus may be resumed, and has
received copies of any additional or supplemental filings which are
incorporated by reference in the prospectus. In the event that the
Company shall give any Suspension Notice, the Company shall use
commercially reasonable efforts to render the Advice and end the
suspension period as promptly as reasonably practicable.
Notwithstanding the foregoing, in no event shall the Company issue
more than two (2) Suspension Notices in any twelve (12)
month period and the aggregate number of days in which a Suspension
Notice or Suspension Notices are in effect exceed an aggregate of
one hundred twenty (120) days in such twelve (12) month
period. The Company shall prepare and file with the Commission such
amendments and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to keep
the Registration Statement continuously effective and in compliance
with applicable laws until the earlier of (i) such time as all
Registrable Securities have been sold pursuant to the Registration
Statement or (ii) the date on which the Investors may sell all
of the Registrable Securities covered by a registration statement
under Rule 144 of the Securities Act during any
ninety (90)-day period without volume limitations (the first
to occur, the “ Expiration Date ”).
The Company may
require each seller of Registrable Securities as to which any
registration is being effected to furnish to the Company such
information as is required to be included with respect to such
seller in a registration statement including information regarding
themselves, the Registrable Securities held by them and the
intended method of disposition of such securities, which
information may be requested pursuant to an investor questionnaire
prepared for such purpose and the Company may exclude from such
registration the Registrable Securities of any holder of
Registrable Securities who unreasonably fails to furnish such
information within a reasonable time after receiving such request;
provided , however , that the
Amended and Restated Investor
Rights Agreement
5
Company shall
give such holder at least five (5) business days prior written
notice before any such exclusion.
Each Investor will
be deemed to have agreed by virtue of its execution and delivery of
this Agreement and its acquisition of Registrable Securities that,
upon receipt of any notice from the Company of a Suspension Notice
as set forth in Section 2(c) such Investor will forthwith
discontinue disposition of such Registrable Securities covered by
such Registration Statement or prospectus until such
Investor’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2(c) hereof, or
until it receives Advice that the use of the prospectus may be
resumed and such Investor has received copies of any additional or
supplemental filings that are incorporated or deemed to be
incorporated by reference in such prospectus. Further, each
Investor acknowledges and agrees that its receipt of a Suspension
Notice may constitute material, non-public information under
federal and/or applicable state securities laws.
3.
Registration Procedures .
When the Company
is required pursuant to the provisions of this Agreement to effect
the registration of any of its securities under the Securities Act,
the Company will:
(a) prepare
and file with the Commission a registration statement on the
appropriate form under the Securities Act with respect to such
securities, which form shall comply in all material respects with
the requirements of the applicable form and include all financial
statements required by the Commission to be filed therewith, and
use its commercially reasonable efforts to cause such registration
statement to become and remain effective until completion of the
proposed offering;
(b) prepare
and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective until the Expiration Date and to comply with the
provisions of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration
statement whenever the seller or sellers of such securities shall
desire to sell or otherwise dispose of the same, but only to the
extent provided in this Agreement;
(c) file
and use its commercially reasonable efforts to register or qualify
the securities covered by such registration statement under such
other securities or state securities or “blue sky” laws
of such jurisdictions as each selling holder shall reasonably
request, and do any and all other acts and things that may be
necessary under such state securities or “blue sky”
laws to enable such selling holder to consummate the public sale or
other disposition in such jurisdictions of the securities owned by
such selling holder, except that the Company shall not for any such
purpose be required to qualify to do business as a foreign
corporation or consent to service of process in any jurisdiction
wherein it is not so qualified or has not so consented;
(d) make
generally available to the holders an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act no later
than forty-five (45) days after the end of the
twelve (12)-month period beginning with the first (1st)
day of the Company’s first
Amended and Restated Investor
Rights Agreement
6
fiscal quarter
commencing after the effective date of a registration statement,
which earnings statement shall cover said twelve (12)-month
period, and which requirement will be deemed to be satisfied if the
Company satisfies the requirements of Rule 158 under the
Securities Act and otherwise complies with all applicable rules and
regulations of the Commission;
(e) if
the Registrable Securities are of a class of securities that is
listed on a national securities exchange, file copies of any
prospectus with such exchange in compliance with Rule 153
under the Securities Act so that the holders of Registrable
Securities benefit from the prospectus delivery procedures
described therein;
(f) cooperate
with each holder and each underwriter, if any, participating in the
disposition of Registrable Securities and their respective counsel
in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. (“
NASD ”), including, if appropriate, the pre-filing of
a prospectus as part of a shelf registration statement in advance
of an underwritten offering;
(g) during
the period when the prospectus is required to be delivered under
the Securities Act, promptly file all documents required to be
filed with the Commission, including pursuant to
Sections 13(a), 13(c), 14, or 15(d) of the Exchange
Act;
(h) provide
a transfer agent and registrar for all Registrable Securities
registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case no later than the effective
date of such registration;
(i) comply
with the requirements of the New York Stock Exchange or any other
relevant exchange for listing the Registrable Securities prior to
or concurrent with the effectiveness of the registration
statement;
(j) provide
copies to and permit legal counsel designated by the holders to
review each registration statement and all amendments and
supplements thereto no fewer than three (3) business days
prior to their filing with the Commission;
(k) furnish
to the holders of Registrable Securities and their legal counsel by
electronic transmission (i) promptly after the same is
prepared and publicly distributed, filed with the Commission, or
received by the Company (but not later than three (3) business
days after the filing date, receipt date or sending date, as the
case may be) one (1) copy of any registration statement and
any amendment thereto, each preliminary prospectus and prospectus
and each amendment or supplement thereto, and each letter written
by or on behalf of the Company to the Commission or the staff of
the Commission, and each item of correspondence from the Commission
or the staff of the Commission, in each case relating to such
registration statement (other than any portion of any thereof which
contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a prospectus,
including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as each holder of
Registrable Securities may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by
such Investor that are covered by the related registration
statement;
Amended and Restated Investor
Rights Agreement
7
(l) use
commercially reasonable efforts to (i) prevent the issuance of
any stop order or other suspension of effectiveness and,
(ii) if such order is issued, obtain the withdrawal of any
such order as soon as reasonable practicable;
(m) promptly
notify the holders of Registrable Securities at any time when a
prospectus relating to Registrable Securities is required to be
delivered under the Securities Act, upon the Company’s
becoming aware that the prospectus included in a registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and at the
request of any such holder, promptly prepare and furnish to such
holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(n) otherwise
use commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission under the Securities Act
and the Exchange Act, and take such other actions as may be
reasonably necessary to facilitate the registration of the
Registrable Securities hereunder; and
(o) if,
at any time the Company is required to re-evaluate its WKSI status
for purposes of an automatic shelf registration statement used to
effect registration under Section 2, the Company determines
that it is not a WKSI, promptly amend the Registration Statement
onto a form the Company is then eligible to use or file a new
Registration Statement on such form, and keep such Registration
Statement effective in accordance with the requirements otherwise
applicable under this Agreement.
(a)
Indemnification by the Company. To the extent permitted by
law, the Company will indemnify and hold harmless each Investor,
the members, owners, partners, officers, directors, employees,
agents, successors and assigns of each Investor, and each Affiliate
of such Investor (individually and collectively the “
Indemnified Person ”), against any losses, claims,
damages, or liabilities (individually and collectively, the “
Liability ”) (joint or several) to which such
Indemnified Person may become subject under the Securities Act or
otherwise, insofar as any Liability (or actions or proceedings in
respect thereof) arises out of or is based upon any of the
following statements, omissions or violations (collectively a
“ Violation ”) by the Company: (i) any
untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such
Registrable Securities were registered under the Securities Act
pursuant to this Agreement, including any final prospectus
contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make
the statements therein not misleading, or (iii) any violation
or alleged violation of the Securities Act, or any applicable
federal or state securities law or any rule or regulation
promulgated under the Securities Act, or any applicable federal or
state securities law in connection with the offering covered by
such
Amended and Restated Investor
Rights Agreement
8
registration
statement. Except as otherwise provided in Section 4(c), the
Company will pay promptly, as incurred, to each such Indemnified
Person any reasonable legal or other expenses reasonably incurred
by them in connection with investigating, or preparing to defend or
defending any Liability; provided however , that the
agreement to indemnify contained in this Section 4(a) shall
not apply to amounts paid in settlement of any Liability or action
to the extent that such Liability arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with
written information furnished by or on behalf of such Investor
expressly for use in connection with such registration statement
and provided further , that the Company shall not be
required to indemnify any Person against Liability that arises out
of the failure of any Person to deliver a prospectus as required by
the Securities Act regardless of any investigation made by or on
behalf of such Indemnified Person. The Company’s
indemnification obligations shall survive any transfer by such
Investor of its Registrable Securities.
(b)
Indemnification by Investors. To the extent permitted by
law, each Investor agrees to indemnify and hold harmless the
Company, each officer of the Company who signs a
registratio
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