-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UwZGe7beUSd0G+VKPpLjPSawtqlg4LujCm7UtmVUNcKSriSXufRAP3HfD9Gaygnp B7dMW7enjy8OfGLnnjblvQ== 0000912057-01-544980.txt : 20020413 0000912057-01-544980.hdr.sgml : 20020413 ACCESSION NUMBER: 0000912057-01-544980 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20011231 GROUP MEMBERS: JANET M. ZWANZIGER GROUP MEMBERS: ZWANZIGER FAMILY VENTURES, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INVERNESS MEDICAL INNOVATIONS INC CENTRAL INDEX KEY: 0001145460 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 043565120 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-62395 FILM NUMBER: 1826632 BUSINESS ADDRESS: STREET 1: 51 SAWYER ROAD STREET 2: SUITE 200 CITY: WALTHAM STATE: MA ZIP: 02453 BUSINESS PHONE: 7816473900 MAIL ADDRESS: STREET 1: 51 SAWYER ROAD STREET 2: SUITE 200 CITY: WALTHAM STATE: MA ZIP: 02453 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ZWANZIGER RON CENTRAL INDEX KEY: 0001033433 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 322 WAVERLY AVE CITY: NEWTON STATE: MA ZIP: 02158 BUSINESS PHONE: 6179695689 MAIL ADDRESS: STREET 1: 322 WAVERLY AVE CITY: NEWTON STATE: MA ZIP: 02158 SC 13D 1 a2066984zsc13d.txt SC 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (RULE 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(a) INVERNESS MEDICAL INNOVATIONS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $.001 PER SHARE - -------------------------------------------------------------------------------- (Title of Class of Securities) 46126P 10 6 - -------------------------------------------------------------------------------- (CUSIP Number) RON ZWANZIGER C/O INVERNESS MEDICAL INNOVATIONS, INC. 51 SAWYER ROAD, SUITE 200 WALTHAM, MA 02453 (781) 647-3900 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) DECEMBER 20, 2001 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. NOTE. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 11 Pages) - -------------------------------------------------------------------------------- CUSIP NO. 46126P 10 6 13D PAGE 2 OF 11 PAGES - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) RON ZWANZIGER - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF/OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED KINGDOM - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER 0 BENEFICIALLY -------------------------------------------------- OWNED BY 8 SHARED VOTING POWER 3,269,011 REPORTING PERSON -------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 0 -------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,269,011 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,269,011 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 34.2% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! - -------------------------------------------------------------------------------- CUSIP NO. 46126P 10 6 13D PAGE 3 OF 11 PAGES - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) JANET M. ZWANZIGER - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF/OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED KINGDOM - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER 0 BENEFICIALLY -------------------------------------------------- OWNED BY 8 SHARED VOTING POWER 3,269,011 REPORTING PERSON -------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 0 -------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,269,011 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,269,011 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 34.2% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! - -------------------------------------------------------------------------------- CUSIP NO. 46126P 10 6 13D PAGE 4 OF 11 PAGES - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) ZWANZIGER FAMILY VENTURES, LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER 1,686,285 BENEFICIALLY -------------------------------------------------- OWNED BY 8 SHARED VOTING POWER 0 REPORTING PERSON -------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 1,686,285 -------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,686,285 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! ITEM 1. SECURITY AND ISSUER. This statement relates to shares of common stock, par value $.001 per share, of Inverness Medical Innovations, Inc., a Delaware corporation ("Innovations"). The address of Innovations' principal executive offices is 51 Sawyer Road, Suite 200, Waltham, MA 02453. ITEM 2. IDENTITY AND BACKGROUND. (a)-(c) This statement is filed by Ron Zwanziger, with a business address of Inverness Medical Innovations, Inc., 51 Sawyer Road, Suite 200, Waltham, Massachusetts 02453. Mr. Zwanziger is Chairman of the Board, President and Chief Executive Officer of Innovations. The address of Innovations' principal executive offices is 51 Sawyer Road, Suite 200, Waltham, MA 02453. Innovations manufactures and sells products for the women's health market and is engaged in the business of developing, acquiring, manufacturing, and marketing advanced medical device technologies. Mr. Zwanziger is also a manager of Zwanziger Family Ventures, LLC. Mr. Zwanziger is the husband of Janet M. Zwanziger. This statement is filed by Janet M. Zwanziger, with an address of 322 Waverly Avenue, Newton, MA 02458. Ms. Zwanziger is also a manager of Zwanziger Family Ventures, LLC. Ms. Zwanziger is the wife of Ron Zwanziger. This statement is filed by Zwanziger Family Ventures, LLC, a Delaware limited liability corporation ("Family Ventures"), with a business address of c/o Ron Zwanziger, Manager, 322 Waverly Avenue, Newton, MA 02458. Family Ventures is engaged in the business of buying, selling and holding securities and other assets for investment and for the estate planning purposes of Ron Zwanziger and Janet M. Zwanziger. Family Ventures has two managers: Ron Zwanziger and Janet M. Zwanziger. Each of the managers acting alone has voting and dispositive power over the shares of Innovations common stock beneficially owned by Family Ventures. (d)-(e) During the last five years, neither Ron Zwanziger nor Janet M. Zwanziger nor Family Ventures has been (i) convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to any civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding been subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. (f) Both Ron Zwanziger and Janet M. Zwanziger are citizens of the United Kingdom. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. On November 21, 2001, pursuant to an Agreement and Plan of Split-Off and Merger dated as of May 23, 2001 (the "Split-Off and Merger Agreement"), Johnson & Johnson acquired Inverness Medical Technology, Inc. ("IMT") in a merger transaction and, simultaneously, Innovations, formerly a majority-owned subsidiary of IMT, was split off from IMT as a separate, publicly-traded company (the "Split-Off and Merger"). At the effective time of the Split-Off and Merger, the outstanding shares of IMT common stock were converted into rights to receive shares of Johnson & Johnson common stock and shares of Innovations common stock, and the outstanding options and warrants to purchase shares of IMT common stock were converted into options and warrants to purchase shares of Johnson & Johnson common stock and options and warrants to purchase shares of Innovations common stock. As a result of the conversions described above in connection with the Split-Off and Merger, Ron Zwanziger acquired an aggregate of 14,450 shares of Innovations common stock and options to purchase an aggregate of 282,485 shares of Innovations common stock, Janet M. Zwanziger acquired an aggregate of 2,600 shares of Innovations common stock, and Family Ventures acquired an aggregate of 117,428 shares of Innovations common stock. 5 Pursuant to a Restricted Stock Agreement dated as of August 15, 2001 (the "Restricted Stock Agreement") between Ron Zwanziger and Innovations, Ron Zwanziger purchased 152.741423722644 shares of Innovations common stock for aggregate consideration consisting of cash in the amount of $.15 and a Promissory Note dated August 16, 2001 (the "Promissory Note") in the principal amount of $10,655,583.68 made by Mr. Zwanziger in favor of Innovations. The cash portion of the purchase price was paid with Mr. Zwanziger's personal funds. Copies of the Restricted Stock Agreement and the Promissory Note are filed as EXHIBIT 1 and EXHIBIT 2, respectively, to this Schedule 13D and are incorporated herein by reference. Immediately prior to the consummation of the Split-Off and Merger, Innovations effected a stock split with respect to the Innovations common stock (the "Stock Split"); as a result of the Stock Split, the 152.741423722644 shares of Innovations common stock owned by Mr. Zwanziger before giving effect to the Stock Split became 1,168,191 shares of Innovations common stock. See Item 6 below for additional description of the terms of the Restricted Stock Agreement and the Promissory Note. On December 20, 2001, Family Ventures purchased 500,000 shares of Series A Convertible Preferred Stock, par value $.001 per share, of Innovations (the "Series A Preferred Stock") for a purchase price per share of $30 in cash and an aggregate purchase price of $15,000,000 in cash. As of the date of this Schedule 13D, each share of Series A Preferred Stock is convertible into two shares of Innovations common stock, and the 500,000 shares of Series A Preferred Stock beneficially owned by Family Ventures are convertible into 1,000,000 shares of Innovations common stock in the aggregate. The conversion rate is subject to adjustment upon certain dilutive equity issuances by Innovations and events such as stock splits, stock dividends and the like with respect to the Innovations common stock. The source of funds for these purchases consisted of cash contributed by one of the members of Family Ventures and cash realized upon the sale of certain securities by Family Ventures. On December 20, 2001, Family Ventures purchased from Innovations a subordinated promissory note in the principal amount of $10,000,000 (the "Subordinated Note") and a warrant representing the right to purchase 27,594 shares of Innovations common stock; the aggregate consideration paid by Family Ventures for such purchase consisted of cash in the amount of $10,000,000. The source of funds for these purchases consisted of cash contributed by one of the members of Family Ventures and cash realized upon the sale of certain securities by Family Ventures. On December 20, 2001, Innovations granted to Ron Zwanziger a non-qualified employee stock option under the terms of Innovations' 2001 Stock Option and Incentive Plan for the purchase of 115,000 shares of Innovations common stock; such grant was made in consideration of his entry into the Lock Up Agreement described in Item 6 below. On December 20, 2001, Innovations granted to Family Ventures a warrant for the purchase of 385,000 shares of Innovations common stock; such grant was made in consideration of its entry into the Lock Up Agreement described in Item 6 below. Both the option and the warrant described in this paragraph are immediately exercisable in full. On December 21, 2001, Family Ventures purchased 156,263 shares of Innovations common stock from Zwanziger Associates, LLC, a Delaware limited liability company ("Zwanziger Associates"), whose managers are Ron Zwanziger and Janet M. Zwanziger. The aggregate consideration delivered by Family Ventures for such purchase was a cash payment to Zwanziger Associates of $1,815,267, constituting a per share purchase price of approximately $11.62. The source of funds for these purchases consisted of cash contributed by one of the members of Family Ventures and cash realized upon the sale of certain securities by Family Ventures. ITEM 4. PURPOSE OF TRANSACTION. All of the shares of Innovations common stock beneficially owned by Ron Zwanziger, Janet M. Zwanziger and Family Ventures, as the case may be, and reported in this Schedule 13D were acquired for investment purposes. (a) The principal and interest on the Subordinated Note purchased by Family Ventures and described in Item 3 above, may, under certain circumstances, be convertible, at the option of Family Ventures, in whole or in part on April 1, 2002 into shares of Series A Preferred Stock at a conversion price of $30 per share. 6 ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) As reported in Innovations' Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001, as of November 21, 2001 and after giving effect to the Split-Off and Merger described above, 7,752,765 shares of Innovations common stock were outstanding. Ron Zwanziger may be deemed to beneficially own an aggregate of 3,269,011 shares of Innovations common stock, which constitutes 34.2% of such class of securities. This total includes options held by Mr. Zwanziger to purchase an aggregate of 397,485 shares of Innovations common stock exercisable within 60 days of the date of this Schedule 13D. This total includes the 1,686,285 shares of Innovations common stock beneficially owned by Family Ventures as described below, over which Mr. Zwanziger, as a manager of Family Ventures, has voting and dispositive power. This total includes the 2,600 shares of Innovations common stock owned by Mr. Zwanziger's wife, Janet M. Zwanziger, as to which he disclaims beneficial ownership. This total excludes 7,600 shares of Innovations common stock owned by a charitable foundation on whose board of directors Mr. Zwanziger and Janet M. Zwanziger, along with three others, serve as directors. Both Mr. Zwanziger and Janet M. Zwanziger have recused themselves from any discussion or consideration of the charitable foundation's disposition of these securities and they disclaim beneficial ownership of such securities. This total excludes 44,300 shares of Innovations common stock and a warrant to purchase 55,900 shares of Innovations common stock held by a trust for the benefit of the family of Mr. Zwanziger and Janet M. Zwanziger; neither Mr. Zwanziger nor Janet M. Zwanziger is a trustee of such trust or has voting or dispositive power over such securities, and they disclaim beneficial ownership of such securities. Mr. Zwanziger's beneficial ownership percentage reported above has been calculated giving effect to the conversion of the 500,000 shares of Series A Preferred Stock and the options and warrants to purchase Innovations common stock that may be deemed to be beneficially owned by him and are reported in this Schedule 13D and without giving effect to conversion of any of the other approximately 1,495,000 shares of Series A Preferred Stock or any other options, warrants, rights, or conversion privileges to purchase Innovations common stock outstanding on the date of this Schedule 13D. Janet M. Zwanziger may be deemed to beneficially own an aggregate of 3,269,011 shares of Innovations common stock, which constitutes 32.4% of such class of securities. This total includes the 1,686,285 shares of Innovations common stock beneficially owned by Family Ventures as described below, over which Ms. Zwanziger, as a manager of Family Ventures, has voting and dispositive power. This total includes the 1,580,126 shares of Innovations common stock beneficially owned by Ms. Zwanziger's husband, Ron Zwanziger, as to which she disclaims beneficial ownership. This total excludes 7,600 shares of Innovations common stock owned by a charitable foundation on whose board of directors Ms. Zwanziger and Ron Zwanziger along with three others serve as directors. Both Ms. Zwanziger and Ron Zwanziger have recused themselves from any discussion or consideration of the charitable foundation's disposition of these securities and they disclaim beneficial ownership of such securities. This total excludes 44,300 shares of Innovations common stock and a warrant to purchase 55,900 shares of Innovations common stock held by a trust for the benefit of the family of Ms. Zwanziger and Ron Zwanziger; neither Ms. Zwanziger nor Ron Zwanziger is a trustee of such trust or has voting or dispositive power over such securities, and they disclaim beneficial ownership of such securities. Ms. Zwanziger's beneficial ownership percentage reported above has been calculated giving effect to the conversion of the 500,000 shares of Series A Preferred Stock and the options and warrants to purchase Innovations common stock that may be deemed to be beneficially owned by her and are reported in this Schedule 13D and without giving effect to conversion of any of the other approximately 1,495,000 shares of Series A Preferred Stock or any other options, warrants, rights, or conversion privileges to purchase Innovations common stock outstanding on the date of this Schedule 13D. Family Ventures beneficially owns an aggregate of 1,686,285 shares of Innovations common stock, which constitutes 18.4% of such class of securities. This total includes an aggregate of 412,594 shares of Innovations common stock issuable pursuant to warrants held by Family Ventures to purchase shares of Innovations common stock that are exercisable within 60 days of the date of this Schedule 13D. This total includes shares of Series A Preferred Stock that may be converted into 1,000,000 shares of Innovations common stock within 60 days of the date of this Schedule 13D. Family Ventures' beneficial ownership percentage reported above has been calculated giving effect to the conversion of the 500,000 shares of Series A Preferred Stock and the warrants to purchase Innovations common stock beneficially owned by it and reported in this Schedule 13D and without giving effect to conversion of any of the other approximately 1,495,000 shares of Series A Preferred Stock or any other options, warrants, rights, or conversion privileges to purchase Innovations common stock outstanding on the date of this Schedule 13D. 7 (b) Ron Zwanziger and Janet M. Zwanziger may be deemed to share voting and dispositive power over all 3,269,011 shares of Innovations common stock reported as beneficially owned by each of them in Item 5(a) above. Family Ventures has sole power to vote and dispose of the 1,686,285 shares of Innovations common stock reported as beneficially owned by it in Item 5(a) above. (c) See the response to Item 3 above, which response is incorporated herein by reference. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. As described in Item 3 above, pursuant to the Restricted Stock Agreement, Ron Zwanziger purchased 152.741423722644 shares of Innovations common stock for aggregate consideration consisting of cash in the amount of $.15 and the delivery of the Promissory Note. Pursuant to a Pledge Agreement dated as of August 16, 2001 (the "Pledge Agreement") between Mr. Zwanziger and Innovations, Mr. Zwanziger pledged the shares purchased pursuant to the Restricted Stock Agreement to Innovations as collateral to secure his obligations under the Promissory Note. After giving effect to the Stock Split, the number of shares of Innovations common stock subject to the terms and conditions of the Restricted Stock Agreement, the Promissory Note and the Pledge Agreement consist of 1,168,191 shares of Innovations common stock (the "Subject Shares"). Under the Restricted Stock Agreement, one-third of the Subject Shares (the "Four-Year Vesting Shares") are subject to a right of Innovations to repurchase unvested Subject Shares upon a termination of Mr. Zwanziger's employment with Innovations for any reason, including on account of death, disability, retirement or discharge or resignation for any reason, voluntary or involuntary, as described therein; the Four-Year Vesting Shares vest in forty-eight equal monthly installments commencing on November 30, 2001. Two-thirds of the Subject Shares (the "Three-Year Vesting Shares") are subject to a right of Innovations to repurchase unvested Subject Shares upon a termination of Mr. Zwanziger's employment with Innovations for any reason (including retirement or discharge or resignation for any reason), other than on account of death, disability, termination without cause or constructive termination, as described therein; the Three-Year Vesting Shares vest in thirty-six equal monthly installments commencing on November 30, 2001. Upon Mr. Zwanziger's death, disability, termination without cause or constructive termination as described therein, all Three-Year Vesting Shares will vest in full. The purchase price per share for any such repurchase of Subject Shares by Innovations will be the purchase price per share paid by Mr. Zwanziger for the Subject Shares so repurchased. Mr. Zwanziger may not sell, pledge or otherwise transfer or dispose of any Subject Shares that have not vested as described above, except to certain of his family members, any trust for their benefit, any family limited partnership or family limited liability company of which the limited partners or members, as the case may be, consist solely of such family members, and the estate, heirs and distibutees of Mr. Zwanziger or any such permitted transferee. The principal amount of the Promissory Note (the "Principal") is due and payable on August 16, 2006, and interest on the unpaid balance of the Principal accrues at the rate of 4.99% per annum, compounded annually, and is payable on each anniversary of the date of the Promissory Note, commencing on August 16, 2002, and at maturity. Mr. Zwanziger is also obligated to pay the Principal and accrued interest thereon with the net after-tax proceeds of any sale by him of any of the Subject Shares. Mr. Zwanziger may also pay all or part of the Principal and accrued interest thereon by delivering shares of the Innovations common stock held by Mr. Zwanziger to Innovations for their fair market value at the time of delivery, provided that 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 have 8 been paid. Under the Promissory Note, Innovations shall have recourse against (i) any assets of Mr. Zwanziger up to (A) twenty-five percent (25%) of the Principal reduced by twenty-five percent (25%) of each payment of Principal made by the Mr. Zwanziger and (B) the full amount of accrued interest on the Principal and (ii) the Restricted Shares, which have been pledged pursuant to the Pledge Agreement. The Promissory Note was made by Mr. Zwanziger in favor of Innovations in replacement of the full recourse promissory note dated August 15, 2001 in the same principal amount made by Mr. Zwanziger in favor of Innovations and referred to in the Restricted Stock Agreement. Copies of the Restricted Stock Agreement, the Promissory Note and the Pledge Agreement are attached to this Schedule 13D as EXHIBIT 1, EXHIBIT 2 and EXHIBIT 3, respectively, and are incorporated herein by reference. The descriptions in this Schedule 13D of the Restricted Stock Agreement, the Promissory Note, the Pledge Agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to such exhibits. In connection with Innovations' entry into a Mezzanine Loan Agreement dated December 20, 2001 (the "Mezzanine Loan Agreement") with Inverness Medical Switzerland GmbH, RBS Mezzanine Limited ("RBS") as arranger and agent, and certain banks and other parties, Mr. Zwanziger and Family Ventures were required to enter into a Lock Up Agreement dated December 20, 2001 (the "Lock Up Agreement") with RBS. Pursuant to the Lock Up Agreement, Mr. Zwanziger and Family Ventures agreed (i) during the period from December 20, 2001 through December 20, 2004, not to sell, pledge, transfer or otherwise dispose of (collectively, "Sell") any shares of Innovations common stock or any options, warrants or other securities exchangeable for or convertible into shares of Innovations common stock (collectively, "Innovations Securities") beneficially owned by them and (ii) during the period from December 20, 2004 through the date on which Innovations has made full and final payment of all amounts due under the Mezzanine Loan Agreement, not to Sell Innovations Securities representing more than an aggregate of twenty-five percent (25%) of the total number of shares of Innovations common stock represented by all of Innovations Securities beneficially owned by them on December 20, 2004, and not to Sell more than an aggregate of ten percent (10%) of such number in any twelve (12) month period, provided that neither Mr. Zwanziger nor Family Ventures may Sell any Innovations Securities at any time that Innovations is in default under the Mezzanine Loan Agreement. A copy of the Lock Up Agreement is attached to this Schedule 13D as EXHIBIT 4 and is incorporated herein by reference. The description in this Schedule 13D of the Lock Up Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to such exhibit. At the date hereof, Ron Zwanziger and Janet M. Zwanziger have no formal arrangement with respect to the securities of Inverness, but by virtue of their marriage, they may coordinate decisions relating to those securities, including decisions in their capacities as managers of Family Ventures. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS. Exhibit 1 Restricted Stock Agreement dated as of August 15, 2001 between Ron Zwanziger and Inverness Medical Innovations, Inc. Exhibit 2 Promissory Note dated August 16, 2001 made by Ron Zwanziger in favor of Inverness Medical Innovations, Inc. Exhibit 3 Pledge Agreement dated as of August 16, 2001 between Ron Zwanziger and Inverness Medical Innovations, Inc. Exhibit 4 Lock Up Agreement dated December 20, 2001 among Ron Zwanziger, Zwanziger Family Ventures, LLC and RBS Mezzanine Limited. 9 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct. Dated: December 31, 2001 /s/ RON ZWANZIGER --------------------------------- Ron Zwanziger /s/ JANET M. ZWANZIGER --------------------------------- Janet M. Zwanziger ZWANZIGER FAMILY VENTURES, LLC By: /s/ RON ZWANZIGER --------------------------------- Name: Ron Zwanziger Title: Manager 10 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION - ------- ----------- Exhibit 1 Restricted Stock Agreement dated as of August 15, 2001 between Ron Zwanziger and Inverness Medical Innovations, Inc. Exhibit 2 Promissory Note dated August 16, 2001 made by Ron Zwanziger in favor of Inverness Medical Innovations, Inc. Exhibit 3 Pledge Agreement dated as of August 16, 2001 between Ron Zwanziger and Inverness Medical Innovations, Inc. Exhibit 4 Lock Up Agreement dated December 20, 2001 among Ron Zwanziger, Zwanziger Family Ventures, LLC and RBS Mezzanine Limited. 11 EX-1 3 a2066984zex-1.txt EXHIBIT 1 Exhibit 1 RESTRICTED STOCK AGREEMENT UNDER THE INVERNESS MEDICAL INNOVATIONS, INC. 2001 STOCK OPTION AND INCENTIVE PLAN NAME OF GRANTEE: Ron Zwanziger (the "GRANTEE") NO. OF SHARES: 152.741423722644 Shares of Common Stock GRANT DATE: August 15, 2001 PER SHARE PURCHASE PRICE: $69,827.70993 (the "PER SHARE PURCHASE PRICE") Pursuant to the Inverness Medical Innovations, Inc. 2001 Stock Option and Incentive Plan (the "PLAN"), Inverness Medical Innovations, Inc., a Delaware corporation (together with its successors, the "COMPANY"), hereby grants, sells and issues to the individual named above, who is an officer, employee, director, consultant or other key person of the Company or any of its subsidiaries, the Shares (as defined below) at the Per Share Purchase Price subject to the terms and conditions set forth herein and in the Plan. The Grantee agrees to the provisions set forth herein and acknowledges that each such provision is a material condition of the Company's agreement to issue and sell the Shares to him or her. The Company hereby acknowledges receipt of the following consideration in full payment for the Shares: (1) cash in the amount of $0.15; and (2) a full recourse promissory note in the amount of $10,655,583.68. This Agreement shall be subject to and governed by all the terms and conditions of the Plan. 1. DEFINITIONS. For the purposes of this Agreement, the following terms shall have the following respective meanings. All capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Plan. "CAUSE" means a vote of the Board resolving that the Grantee has committed willful misconduct or gross negligence in the performance of duty in connection with the business affairs of the Company which, as determined in good faith by the Board, would: (i) materially adversely affect the business or the reputation of the Company with its current or prospective customers, suppliers, lenders and/or other third parties with whom it does or might do business; or (ii) expose the Company to a risk of civil or criminal legal damages, liabilities or penalties; PROVIDED that if such willful misconduct or gross negligence and the adverse effects or damages therefrom may be cured, the Grantee shall have fourteen (14) days or such additional time as may be reasonably determined by the Board to effect such cure from receipt by the Grantee of a written demand from the Board. "COMMON STOCK" means the Company's Common Stock, par value $0.001 per share, together with any shares into which Common Stock may be converted or exchanged, as provided above and herein. "CONSTRUCTIVE TERMINATION" means the occurrence of any of the following events in the absence of Cause: (i) a significant adverse change in the nature or scope of Grantee's responsibilities, authorities, powers, functions or duties; (ii) a Change of Control of the Company, except for a Change of Control which results from the Merger; or (iii) the sale of all or substantially all of the assets of the Company. "DISABILITY" means the Grantee's inability to perform his normal required services for the Company and its subsidiaries by reason of his mental or physical disability, as determined by the Board in good faith in its sole discretion. "FOUR-YEAR TERMINATION EVENT" means the termination of Grantee's employment with the Company and its subsidiaries for any reason whatsoever, regardless of the circumstances thereof, and including without limitation upon death, Disability, retirement or discharge or resignation for any reason, whether voluntary or involuntary. Upon a Four-Year Termination Event, the Grantee shall cease to vest in any Four-Year Shares that are Restricted Shares. "MERGER" means the merger of Inverness Medical Technology, Inc. with a wholly-owned subsidiary of Johnson & Johnson pursuant to the Agreement and Plan of Split-Off and Merger dated as of May 23, 2001, among Johnson & Johnson, Sunrise Acquisition Corp. and Inverness Medical Technology, Inc. (the "Merger Agreement") "NEGATIVE VOTE" means the failure of the stockholders of Inverness Medical Technology, Inc. entitled to vote at the Special Meeting to adopt the Merger Agreement, approve the Company's 2001 Stock Option and Incentive Plan and approve the Executive Bonus Plan, each as described in the Registration Statement on Form S-4 filed by the Company with the Securities and Exchange Commission on August 13, 2001, as the same may be amended from time to time. "PERMITTED TRANSFEREES" means any of the following to whom the Grantee may transfer Restricted Shares hereunder (as set forth in Section 4): the Grantee's spouse, children (natural or adopted), stepchildren, a trust for the sole benefit of one or more such family members of which the Grantee is the settlor, or a family limited partnership or family limited liability company of which the limited partners or members, as the case may be, consist solely of one or more such family members; PROVIDED, HOWEVER, that any such trust, family limited partnership, or family limited liability company does not require or permit distribution of any Restricted Shares during the term of this Agreement unless subject to the terms of this Agreement. Upon the death of the Grantee (or a Permitted Transferee to whom Restricted Shares have been transferred hereunder), the term Permitted Transferees shall also include such deceased Grantee's (or such deceased Permitted Transferee's) estate, executions, administrations, personal representations, heirs, legatees and distributees, as the case may be. "PERSON" means any individual, corporation, partnership (limited or general), limited liability company, limited liability partnership, association, trust, joint venture, unincorporated organization or any similar entity. "RESTRICTED SHARES" shall initially mean all of the Shares being purchased by the Grantee on the date hereof, PROVIDED that for so long as the Grantee remains an employee of the Company or any of its subsidiaries: (i) 101.827615815096 Shares shall become Vested Shares in 36 equal monthly installments commencing on the last day of the calendar month during which the Merger becomes effective (all Shares subject to vesting pursuant to (i), the "THREE-YEAR SHARES") and (ii) 50.913807907548 Shares shall become Vested Shares in 48 equal monthly installments commencing on the last day of the calendar month during which the Merger becomes effective (all Shares subject to vesting pursuant to (ii), the "FOUR-YEAR SHARES"). "SHARES" means the shares of Common Stock being purchased by the Grantee on the date hereof and any additional shares of Common Stock or other securities received in respect of the Shares, as a dividend on, or otherwise on account of, the Shares. "SPECIAL MEETING" means the special meeting of the stockholders of Inverness Medical Technology, Inc. at which such stockholders will vote upon a proposal to adopt the Merger Agreement, a proposal to approve the Company's 2001 Stock Option and Incentive Plan and a proposal to approve the Company's Executive Bonus Plan. "THREE-YEAR TERMINATION EVENT" means the termination of the Grantee's employment with the Company and its subsidiaries for any reason whatsoever, regardless of the circumstances thereof, and including without limitation upon retirement or discharge or resignation for any reason, whether voluntary or involuntary; PROVIDED, HOWEVER, that none of death, Disability, Constructive Termination or termination by the Company or its subsidiaries of Grantee's employment with the Company and its subsidiaries without Cause shall be a Three-Year Termination Event. Upon a Three-Year Termination Event, the Grantee shall cease to vest in any Three-Year Shares that are Restricted Shares, notwithstanding anything to the contrary set forth herein. "VESTED SHARES" means all Shares which are not Restricted Shares. 2. PURCHASE AND SALE OF SHARES; INVESTMENT REPRESENTATIONS. (a) PURCHASE AND SALE. On the date hereof, the Company hereby sells to the Grantee, and the Grantee hereby purchases from the Company, the number of Shares set forth above for the Per Share Purchase Price multiplied by the number of shares set forth above. (b) INVESTMENT REPRESENTATIONS. In connection with the purchase and sale of the Shares contemplated by Section 2(a) above, the Grantee hereby represents and warrants to the Company as follows: (i) The Grantee is purchasing the Shares for the Grantee's own account for investment only, and not for resale or with a view to the distribution thereof. (ii) The Grantee has had such an opportunity as he or she has deemed adequate to obtain from the Company such information as is necessary to permit him or her to evaluate the merits and risks of the Grantee's investment in the Company and has consulted with the Grantee's own advisers with respect to the Grantee's investment in the Company. (iii) The Grantee has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase. (iv) The Grantee can afford a complete loss of the value of the Shares and is able to bear the economic risk of holding such Shares for an indefinite period. (v) The Grantee understands that the Shares are not registered under the Securities Act of 1933, as amended (the "Act") (it being understood that the Shares are being issued and sold in reliance on the exemption provided in Rule 701 thereunder) or any applicable state securities or "blue sky" laws and may not be sold or otherwise transferred or disposed of in the absence of an effective registration statement under the Act and under any applicable state securities or "blue sky" laws (or exemptions from the registration requirements thereof). The Grantee further acknowledges that certificates representing the Shares will bear restrictive legends reflecting the foregoing. 3. REPURCHASE RIGHT. (a) REPURCHASE. Upon the occurrence of a Three-Year Termination Event or a Four-Year Termination Event the Company or its assigns shall have the right and option to repurchase all or any portion of the Restricted Shares held by the Grantee or any Permitted Transferee. Upon the occurrence of a Negative Vote, the Company or its assigns shall repurchase the Restricted Shares held by the Grantee or any Permitted Transferee. The purchase and sale arrangements contemplated by the preceding sentences of this Section 3(a) are referred to herein as the "REPURCHASE." (b) REPURCHASE PRICE. The per share purchase price of the Restricted Shares subject to the Repurchase (the "REPURCHASE PRICE") shall be the Per Share Purchase Price. (c) CLOSING PROCEDURE. The Company or its assigns shall effect the Repurchase (if so elected) by delivering or mailing to the Grantee (and/or, if applicable, any Permitted Transferee) written notice within six (6) months after the Three-Year Termination Event, Four-Year Termination Event or Negative Vote, specifying a date within such six-month period in which the Repurchase shall be effected. Upon such notification, the Grantee and any Permitted Transferees shall promptly surrender to the Company any certificates representing the Restricted Shares being purchased, together with a duly executed stock power for the transfer of such Restricted Shares to the Company or the Company's assignee or assignees. Upon the Company's or its assignee's receipt of the certificates from the Grantee or any Permitted Transferee, the Company or its assignee or assignees shall deliver to him, her or them a check for the Repurchase Price of the Restricted Shares being purchased, PROVIDED, HOWEVER, that the Company may pay the Repurchase Price for such shares by offsetting and canceling any indebtedness then owed by the Grantee to the Company. At such time, the Grantee and/or any holder of the Restricted Shares shall deliver to the Company the certificate or certificates representing the Restricted Shares so repurchased, duly endorsed for transfer, free and clear of any liens or encumbrances. The Repurchase right specified in this Section 3 shall survive and remain in effect as to Restricted Shares following and notwithstanding any public offering by or merger or other transaction involving the Company and certificates representing such Restricted Shares shall bear legends to such effect. 4. RESTRICTIONS AND CONDITIONS. (a) Shares of Restricted Shares granted herein may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of by the Grantee prior to vesting. (b) Any attempted disposition of Restricted Shares not in accordance with the terms and conditions of this Section 4 shall be null and void, and the Company shall not reflect on its records any change in record ownership of any Restricted Shares as a result of any such disposition, shall otherwise refuse to recognize any such disposition and shall not in any way give effect to any such disposition of any Restricted Shares. (c) Notwithstanding the foregoing provisions, the Grantee (but not any transferee thereof) may sell, assign, transfer or give away any or all of the Restricted Shares to Permitted Transferees; PROVIDED, HOWEVER, that such Permitted Transferee(s) shall, as a condition to any such transfer, agree to be subject to the provisions of this Agreement (including, without limitation, the provisions of Section 3 and this Section 4) and shall have delivered a written acknowledgment to that effect to the Company. 5. ACCELERATED VESTING. Upon the death, Disability or Constructive Termination of Grantee or upon the termination by the Company or its subsidiaries of the Grantee's employment with the Company and its subsidiaries without Cause, all Three-Year Shares that are Restricted Shares at the time of such death, Disability or termination shall vest. 6. LEGEND. Certificates evidencing the Restricted Shares granted herein shall bear an appropriate legend, as determined by the Administrator in its sole discretion, to the effect that such Shares are subject to restrictions set forth herein and in the Plan. 7. WITHHOLDING TAXES. The Grantee shall, not later than the date as of which the receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event. The Grantee may elect to have the required minimum tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company to withhold from shares of Stock to be issued, or (ii) transferring to the Company, a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due. 8. ELECTION UNDER SECTION 83(b). The Grantee and the Company hereby agree that the Grantee shall, within 30 days following the date of this Agreement, file with the Internal Revenue Service and the Company an election under Section 83(b) of the Internal Revenue Code. 9. ASSIGNMENT. At the discretion of the Board, the Company shall have the right to assign its rights with respect to the Repurchase to any Person or Persons, in whole or in part in any particular instance, upon the same terms and conditions applicable to the exercise thereof by the Company, and such assignee or assignees of the Company shall then take and hold any Shares so acquired subject to such terms as may be specified by the Company in connection with any such assignment. 10. MISCELLANEOUS PROVISIONS. (a) ADJUSTMENT FOR STOCK-SPLIT. In the event that the Company effectuates a stock split of its Common Stock in connection with the Merger, the number of Shares purchased pursuant to this Agreement shall be adjusted to reflect such split; provided, however, that if any fractional shares result from such adjustment, the total number of Shares shall be rounded up to the nearest whole number. (b) RECORD OWNER; DIVIDENDS. The Grantee and any Permitted Transferees, during the duration of this Agreement, shall be considered the record owners of and shall be entitled to vote the Shares if and to the extent the Shares are entitled to voting rights. The Grantee and any Permitted Transferees shall be entitled to receive all dividends and any other distributions declared on the Shares; PROVIDED, HOWEVER, that the Company is under no duty to declare any such dividends or to make any such distribution. (c) EQUITABLE RELIEF. The parties hereto agree and declare that legal remedies are inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement. (d) CHANGE AND MODIFICATIONS. This Agreement may not be orally changed, modified or terminated, nor shall any oral waiver of any of its terms be effective. This Agreement may be changed, modified or terminated only by an agreement in writing signed by the Company and the Grantee. (e) 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. (f) HEADINGS. The headings are intended only for convenience in finding the subject matter and do not constitute part of the text of this Agreement and shall not be considered in the interpretation of this Agreement. (g) SAVING CLAUSE. If any provision(s) of this Agreement shall be determined to be illegal or unenforceable, such determination shall in no manner affect the legality or enforceability of any other provision hereof. (h) NOTICES. All notices, requests, consents and other communications shall be in writing and be deemed given when delivered personally, by facsimile transmission or when received if mailed by first class registered or certified mail, postage prepaid. Notices to the Company or the Grantee shall be addressed as set forth underneath their signatures below, or to such other address or addresses as may have been furnished by such party in writing to the other. Notices to any holder of the Shares other than the Grantee shall be addressed to the address furnished by such holder to the Company. (i) BENEFIT AND BINDING EFFECT. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors, assigns, and legal representatives. Without limitation of the foregoing, upon any stock-for-stock merger in which the Company is not the surviving entity, shares of the Company's successor issued in respect of the Shares shall remain subject to vesting and Repurchase hereunder. The Company has the right to assign this Agreement, and such assignee shall become entitled to all the rights of the Company hereunder to the extent of such assignment. (j) DISPUTE RESOLUTION. Except as provided below, any dispute arising out of or relating to this Agreement or the breach, termination or validity hereof shall be finally settled by binding arbitration conducted expeditiously in accordance with the Comprehensive Arbitration Rules and Procedures of JAMS or its successors (the "JAMS RULES"). The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. sections 1-16, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration shall be Boston, Massachusetts. The parties covenant and agree that the arbitration shall commence within 60 days of the date on which a written demand for arbitration is filed by any party hereto. In connection with the arbitration proceeding, the arbitrator shall have the power to order the production of documents by each party and any third-party witnesses. In addition, each party may take up to three depositions as of right, and the arbitrator may in his or her discretion allow additional depositions upon good cause shown by the moving party. However, the arbitrator shall not have the power to order the answering of interrogatories or the response to requests for admission. In connection with any arbitration, each party shall provide to the other, no later than seven (7) business days before the date of the arbitration, the identity of all persons that may testify at the arbitration and a copy of all documents that may be introduced at the arbitration or considered or used by a party's witness or expert. The arbitrator's decision and award shall be made and delivered within six (6) months of the selection of the arbitrator. The arbitrator's decision shall set forth a reasoned basis for any award of damages or finding of liability. The arbitrator shall not have power to award damages in excess of actual compensatory damages and shall not multiply actual damages or award punitive damages or any other damages that are specifically excluded under this Agreement, and each party hereby irrevocably waives any claim to such damages. The parties covenant and agree that they will participate in the arbitration in good faith. This Section 10(j) applies equally to requests for temporary, preliminary or permanent injunctive relief, except that in the case of temporary or preliminary injunctive relief any party may proceed in court without prior arbitration for the limited purpose of avoiding immediate and irreparable harm. Each of the parties hereto (i) hereby irrevocably submits to the jurisdiction of any United States District Court of competent jurisdiction for the purpose of enforcing the award or decision in any such proceeding, (ii) hereby waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution (except as protected by applicable law), that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court, and hereby waives and agrees not to seek any review by any court of any other jurisdiction which may be called upon to grant an enforcement of the judgment of any such court. Each of the parties hereto hereby consents to service of process by registered mail at the address to which notices are to be given. Each of the parties hereto agrees that its, his or her submission to jurisdiction and its, his or her consent to service of process by mail is made for the express benefit of the other parties hereto. Final judgment against any party hereto in any such action, suit or proceeding may be enforced in other jurisdictions by suit, action or proceeding on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction. (k) COUNTERPARTS. For the convenience of the parties and to facilitate execution, this Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document. IN WITNESS WHEREOF, the Company and the Grantee have executed this Restricted Stock Agreement as of the date first above written. COMPANY INVERNESS MEDICAL INNOVATIONS, INC. By: /s/ DUANE L. JAMES ------------------------------------ Name: Duane L. James Title: Treasurer GRANTEE /s/ RON ZWANZIGER --------------------------------------- Name: Ron Zwanziger Address: 322 Waverly Avenue Newton, MA 02458 EX-2 4 a2066984zex-2.txt EXHIBIT 2 Exhibit 2 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. 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: 322 Waverly Avenue Newton, MA 02458 2 [FORM OF PLEDGE AGREEMENT] EXHIBIT A PLEDGE AGREEMENT In consideration of a loan made by Inverness Medical Innovations, Inc., a Delaware corporation (together with any successor thereto, the "Company"), to Ron Zwanziger ("Borrower"), under the Promissory Note dated August 16, 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 152.741423722644 shares of Common Stock of the Company (each, together with any successor securities, a "Share") obtained pursuant to a certain Restricted Stock Agreement dated as of August 15, 2001 between Borrower and the Company (the "Restricted Stock Agreement") and held by Borrower, or any Permitted Transferee (as that term is defined in the Restricted Stock 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 or in addition to 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 3 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. RESTRICTED STOCK AGREEMENT. Borrower acknowledges that transfer of the Shares is subject to certain restrictions under the Restricted Stock 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 Restricted Stock Agreement. Subject to such requirements and the terms hereof, the Company shall release from this pledge Vested Shares or Restricted Shares (as those terms are defined in the Restricted Stock Agreement) as designated by Borrower, provided that such Shares shall remain subject to the Restricted Stock 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 Restricted Stock 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 4 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. 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 Restricted Stock 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 Restricted Stock Agreement or following the vesting of such Shares provided such transfer is in accordance with the Restricted Stock 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, 5 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. (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 Restricted Stock 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 6 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 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] 7 EXECUTED as of the date set forth below. August 16, 2001 BORROWER: --------------------------------------- Name: Ron Zwanziger COMPANY: INVERNESS MEDICAL INNOVATIONS, INC. By: ------------------------------------ Name: Title: EX-3 5 a2066984zex-3.txt EXHIBIT 3 EXHIBIT 3 PLEDGE AGREEMENT In consideration of a loan made by Inverness Medical Innovations, Inc., a Delaware corporation (together with any successor thereto, the "Company"), to Ron Zwanziger ("Borrower"), under the Promissory Note dated August 16, 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 152.741423722644 shares of Common Stock of the Company (each, together with any successor securities, a "Share") obtained pursuant to a certain Restricted Stock Agreement dated as of August 15, 2001 between Borrower and the Company (the "Restricted Stock Agreement") and held by Borrower, or any Permitted Transferee (as that term is defined in the Restricted Stock 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 or in addition to 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. RESTRICTED STOCK AGREEMENT. Borrower acknowledges that transfer of the Shares is subject to certain restrictions under the Restricted Stock 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 Restricted Stock Agreement. Subject to such requirements and the terms hereof, the Company shall release from this pledge Vested Shares or Restricted Shares (as those terms are defined in the Restricted Stock Agreement) as designated by Borrower, provided that such Shares shall remain subject to the Restricted Stock 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 Restricted Stock 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 2 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. 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 Restricted Stock 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 Restricted Stock Agreement or following the vesting of such Shares provided such transfer is in accordance with the Restricted Stock 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 3 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. (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 Restricted Stock 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 4 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 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. August 16, 2001 BORROWER: /s/ RON ZWANZIGER --------------------------------------- Name: Ron Zwanziger COMPANY: INVERNESS MEDICAL INNOVATIONS, INC. By: /s/ DUANE L. JAMES ------------------------------------ Name: Duane L. James Title: Treasurer EX-4 6 a2066984zex-4.txt EXHIBIT 4 Exhibit 4 LOCK UP AGREEMENT RBS Mezzanine Limited As Arranger and Agent 135 Bishopsgate London EC2M 3UR Re: INVERNESS MEDICAL INNOVATIONS, INC. (THE "COMPANY") Ladies and Gentlemen: Reference is hereby made to that certain Mezzanine Loan Agreement by and among the Company, Inverness Medical Switzerland GmbH, certain banks, RBS Mezzanine Limited, as arranger and agent ("RBS"), and certain other parties (the "Mezzanine Loan Agreement"). Each of the undersigned is an owner of record and beneficially of certain shares of the common stock, $.001 par value per share, of the Company ("Common Stock") and securities convertible into or exchangeable or exercisable for Common Stock. It is a requirement of the Mezzanine Loan Agreement that the undersigned execute and deliver this agreement. The undersigned recognize that the Mezzanine Loan Agreement will benefit the Company by, among other things, raising additional capital for its operations. The undersigned acknowledge that RBS and the other banks party to the Mezzanine Loan Agreement are relying on the representations and agreements of the undersigned contained in this agreement in entering into the Mezzanine Loan Agreement and advancing funds to the Company thereunder. This agreement shall remain in effect until the Company has made full and final payment of all amounts due under the Mezzanine Loan Agreement (the "Termination Date"). For the avoidance of doubt, the Company's obligations under the common stock purchase warrants issued in connection with the Mezzanine Loan Agreement shall not be deemed to represent amounts due under the Mezzanine Loan Agreement. In consideration of the foregoing, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agree that the undersigned will not, without the prior written consent of RBS (which consent may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, transfer, or otherwise dispose of (collectively, "Sell") any shares of Common Stock, options or warrants to acquire shares of Common Stock, or securities exchangeable for or convertible into shares of Common Stock (collectively, "Company Securities") currently or hereafter owned either of record or beneficially by the undersigned during the period beginning on the date of this agreement and ending on December 20, 2004. During the period from December 20, 2004 through the Termination Date, the undersigned will not Sell Company Securities representing more than an aggregate of twenty five percent (25%) of the total number of shares of Common Stock represented by all of the Company Securities owned either of record or RBS Mezzanine Limited, As Arranger and Agent December 20, 2001 Page 2 beneficially by the undersigned on December 20, 2004, and will not Sell more than an aggregate of 10% of such number in any twelve (12) month period, provided, however, that the undersigned will not Sell any Company Securities at any time that the Company is in default under the Mezzanine Loan Agreement. The undersigned consent to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of Company Securities held by the undersigned except in compliance with the foregoing restrictions. The foregoing restrictions shall not be deemed to prohibit the undersigned from exercising any option or warrant to purchase Company Securities or from exercising the exchange or conversion rights of any Company Security, provided, however, that the Company Securities received by the undersigned as a result of any such exercise shall remain subject to the provisions of this agreement. Each of the undersigned hereby represents and warrants that he or it has full power and authority to enter into this agreement. This agreement is irrevocable and will be binding on the undersigned and the respective successors and assigns of the undersigned. Dated: December 20, 2001 ZWANZIGER FAMILY VENTURES, LLC /s/ Ron Zwanziger By: /s/ Ron Zwanziger - ----------------------------- ------------------------------ Ron Zwanziger Name: Title: ACCEPTED AND AGREED TO: RBS Mezzanine Limited By: /s/ [Authorized Representative] --------------------------------- Name: Title: 2 -----END PRIVACY-ENHANCED MESSAGE-----