EXHIBIT 99.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), is made and entered
into as of May 9, 2007, by and among Inverness Medical Innovations, Inc. a
Delaware corporation (the "COMPANY"), and the undersigned prospective investor
(the "INVESTOR").
1. PURCHASE AND SALE OF SECURITIES; CLOSING.
1.1. Purchase and Sale of Securities.
(a) Subject to the terms and conditions of this Agreement, the
Investor agrees to purchase from the Company $__,000,000 aggregate principal
amount of the 3% Convertible Senior Subordinated Notes Due 2016 (the "NOTES") of
the Company indicated on the Investor's signature page to this Agreement at a
purchase price equal to 100% of aggregate principal amount of such Notes (the
"PURCHASE PRICE"). The Notes and the Additional Notes (as defined below) will be
issued pursuant to an Indenture to be dated as of May 14, 2007, in the form of
EXHIBIT A hereto (the "INDENTURE") between the Company and U.S. Bank Trust
National Association, as trustee (the "TRUSTEE"). The Notes will be convertible
into shares of common stock of the Company, par value $0.001 per share (the
"COMMON STOCK"). The shares of Common Stock issuable upon conversion of the
Notes are referred to herein as the "UNDERLYING SECURITIES" and the Underlying
Securities collectively with the Notes are referred to herein as the
"SECURITIES."
(b) The Investor shall pay the Purchase Price by delivering
immediately available good funds in United States Dollars by wire transfer no
later than the Closing Date, as defined in Section 1.4 below, to the Company in
accordance with the wire transfer instructions attached hereto as EXHIBIT B.
(c) The Company shall deliver to the nominee of The Depository Trust
Company, for the account of the Investor, one or more global notes representing
the Notes, with any transfer taxes payable in connection with the sale of the
Notes paid by the Company; or (b) at the written request of the Investor not
later than three (3) full business days prior to the Closing Date, delivery to
the Investor of one or more physical notes in such denominations as specified by
the Investor.
1.2. Aggregate Principal Amount of Notes Offered. The Company is
simultaneously entering into multiple agreements in substantially the same form
as this Agreement with certain other investors (the "OTHER INVESTORS"). Pursuant
to this Agreement and the agreements with the Other Investors, the Company is
selling an aggregate of up to $150,000,000 aggregate principal amount of its 3%
Convertible Senior Subordinated Notes Due 2016 (the "ADDITIONAL NOTES") to the
Other Investors (the "OFFERING").
1.3. Binding Effect of this Agreement. The Investor acknowledges and agrees
that this Agreement shall be binding upon the Investor upon the submission to
the Company of the Investor's signed counterpart signature page to this
Agreement (the "SUBSCRIPTION"); provided
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that, in the event the Closing Date, as defined in Section 1.4 below, shall not
have occurred on or prior to May 18, 2007 (such date subject to extension by up
to 15 days by the Company by
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1.4. written notice thereof to the Investor) (the "TERMINATION DATE"), this
Agreement shall be terminated and be of no force and effect. The Company, in its
sole discretion, may terminate the Offering at any time prior to the Closing
Date without penalty. The execution of this Agreement by the Investor or
solicitation of the investment contemplated hereby shall create no obligation on
the part of the Company to accept any Subscription, in part or in full, or
complete the Offering. The Investor hereby acknowledges and agrees that the
Subscription hereunder is irrevocable by the Investor, and that, except as
required by law, the Investor is not entitled to cancel, terminate or revoke
this Agreement or any agreements of the Investor hereunder and that if the
Investor is an individual this Agreement shall survive the death or disability
of the Investor and shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
1.5. Closing; Payment and Delivery. The completion of the purchase and sale
of the Notes (the "CLOSING") shall occur, subject to the satisfaction or waiver
of the conditions set forth in Section 1.5 and Section 1.6 (other than those
intended to be satisfied at Closing), at the offices of Xxxxx Xxxx LLP, 0000
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, 00000, on May 14, 2007 or such other date
and place as the Investor and the Company shall agree upon in writing. The date
upon which the Closing actually occurs is herein referred to as the "CLOSING
DATE".
1.6. Conditions to the Company's Obligation to Complete Purchase and Sale.
Upon acceptance of the Subscription, the Company's obligation to issue and sell
the Notes to the Investor at Closing is subject to the satisfaction, on or
before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing the Investor with prior
written notice thereof:
(a) Payment of Purchase Price. The Investor shall make payment to the
Company by wire transfer of the Purchase Price in accordance with Section
1.1(b); and
(b) Representations and Warranties; Covenants. The representations and
warranties of the Investor set forth in Article 3 hereof shall be true and
correct as of the date hereof and as of the Closing Date as though made at that
time (except for representations and warranties that speak as of a specific date
(which shall be true and correct as of such date)), and the Investor shall have
performed, satisfied and complied with in all material respects the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Investor on or prior to the Closing Date.
1.7. Conditions to the Investor's Obligation to Complete Purchase and Sale.
The obligation of the Investor hereunder to purchase the Notes from the Company
at the Closing is subject to the satisfaction, on or before the Closing Date, of
each of the following conditions, provided that these conditions are for the
Investor's sole benefit and may be waived by the Investor at any time in its
sole discretion by providing the Company with prior written notice thereof:
(a) Opinion of Counsel. Receipt by the Investors of an opinion letter
of Xxxxx Xxxx LLP, counsel to the Company, dated the Closing Date, in
substantially the form attached hereto as EXHIBIT C;
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(b) Representations and Warranties; Covenants. The representations and
warranties of the Company set forth in Article 2 hereof shall be true and
correct in all material respects as of the date hereof and as of the Closing
Date as though made at that time (except for any representations and warranties
that are qualified as to materiality in Article 2, in which case the foregoing
materiality qualification shall not apply, or that speak as of a specific date,
which shall be considered as of such date), and the Company shall have
performed, satisfied and complied with in all material respects the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company on or prior to the Closing Date;
(c) Officer's Certificate. The Company shall have delivered a
certificate, dated the Closing Date, duly executed on behalf of the Company by
its Chief Executive Officer to the effect set forth in clause (b) above;
(d) Secretary's Certificate. The Company shall have delivered a
certificate, dated the Closing Date, duly executed by its Secretary or Assistant
Secretary or other appropriate officer, certifying that the attached copies of
the Company's Certificate of Incorporation, Certificate of Designations (as
defined below), by-laws and the resolutions of the Board of Directors or
Executive Committee of the Board of Directors approving this Agreement and the
transactions contemplated hereby, are all true, complete and correct and remain
unamended and in full force and effect;
(e) No Litigation. On the Closing Date, no legal action, suit or
proceeding shall be pending or overtly threatened which seeks to restrain or
prohibit the transactions contemplated by this Agreement.
(f) Registration Rights Agreement. The Investor shall have received a
counterpart of the Registration Rights Agreement that shall have been executed
and delivered by a duly authorized officer of the Company.
(g) Indenture. The Indenture shall have been executed and delivered by
a duly authorized officer of the Company and the Trustee.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as
SCHEDULE A or as set forth in the SEC Documents (as defined below), the Company
hereby represents and warrants to the Investor as follows:
2.1. Subsidiaries. The Company has no direct or indirect subsidiaries (as
defined by Rule 405 under the Securities Act of 1933, as amended (the
"SECURITIES ACT") other than as specified in the SEC Documents (the
"SUBSIDIARIES").
2.2. Organization and Qualification. The Company and each of its
Subsidiaries is duly organized and validly existing and is in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), except where the failure to be in good standing would not have a
material adverse effect upon the business, assets, financial condition or
results of operation of the Company and its Subsidiaries taken as a whole (a
"MATERIAL ADVERSE
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EFFECT"). The Company and each of its Subsidiaries has full corporate power and
authority to own, operate and occupy its properties and to conduct its business
as presently conducted and is registered or qualified to do business and in good
standing in each jurisdiction in which it owns or leases property or transacts
business and where the failure to be so qualified would have a Material Adverse
Effect, and to the Company's knowledge, no proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification.
2.3. Due Authorization. The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement,
the Indenture, the Notes and the Registration Rights Agreement. Each of this
Agreement, the Indenture, the Notes and the Registration Rights Agreement has
been duly authorized and validly executed and delivered by the Company and,
assuming due authorization, execution and delivery by the other party hereto,
constitutes a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) to the extent
rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, (ii) enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and (iii) enforceability may be limited by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) (the "ENFORCEABILITY EXCEPTIONS").
2.4. The Notes. The Notes have been duly authorized by the Company and,
when duly executed, authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
2.5. The Underlying Securities. Upon issuance and delivery of the Notes in
accordance with this Agreement and the Indenture, the Notes will be convertible
into the Underlying Securities in accordance the terms of the Notes; the
Underlying Securities reserved for issuance upon conversion of the Notes have
been duly authorized and reserved and, when issued upon conversion of the Notes
in accordance with the terms of the Notes, will be validly issued, fully paid
and non assessable, and the issuance of the Underlying Securities will not be
subject to any preemptive or similar rights.
2.6. Non-Contravention. The execution and delivery of this Agreement, the
Indenture, the Notes and the Registration Rights Agreement, the issuance and
sale of the Notes to be sold by the Company under this Agreement (and the
issuance of the underlying securities upon conversion of the Notes), the
performance by the Company of its obligations under this Agreement, the
Indenture, the Notes and the Registration Rights Agreement and the consummation
of the transactions contemplated hereby will not (A) conflict with or constitute
a violation of, or default (with or without the giving of notice or the passage
of time or both) under, (i) any bond, debenture, note or other evidence of
indebtedness, or under any material lease, indenture, mortgage, deed of trust,
loan agreement, joint venture or other agreement or instrument to which the
Company is a party or by which it or its properties are bound, (ii) the
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Certificate of Incorporation or by-laws of the Company or any of its
Subsidiaries, or (iii) any law, administrative regulation, ordinance or order of
any court of competent jurisdiction or governmental agency, arbitration panel or
authority applicable to the Company, any of its Subsidiaries or their respective
properties, which conflict, violation or default would, in the case of clause
(i) or (iii) be likely to result in a Material Adverse Effect or materially
adversely hinder the consummation of the transactions contemplated by this
Agreement, the Indenture, the Notes and the Registration Rights Agreement, or
(B) result in the creation or imposition of any lien, encumbrance, claim,
security interest or restriction whatsoever upon any of the material properties
or assets of the Company or any of its Subsidiaries or an acceleration of
indebtedness pursuant to any obligation, agreement or condition contained in any
material bond, debenture, note or any other evidence of indebtedness or any
material indenture, mortgage, deed of trust or any other agreement or instrument
to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Subsidiaries is subject. No consent,
approval, authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, self-regulatory
organization, stock exchange or market, or other governmental body in the United
States is required for the execution and delivery of this Agreement, the valid
issuance and sale of the Notes to be sold pursuant to this Agreement other than
such as have been made or obtained, are disclosed in Schedule 2.6 or for any
securities filings required to be made under federal or state securities laws.
2.7. Reporting Status. The Company has filed in a timely manner all
documents that the Company was required to file under the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), since January 1, 2004 (the "SEC
DOCUMENTS"). The SEC Documents complied as to form in all material respects with
the Securities and Exchange Commission's (the "SEC") requirements as of their
respective filing dates, and the information contained therein as of the date
thereof did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except to the extent that information contained in any such
document has been revised or superseded by an SEC Document that was subsequently
filed prior to the date hereof.
2.8. Capitalization. Immediately prior to the Closing, the authorized
capital stock of the Company consists of:
i. 100,000,000 shares of Common Stock, $0.001 par value per share of
which 46,584,855 shares are issued and outstanding at the close
of business on May 4, 2007; and
ii. 5,000,000 shares of Preferred Stock, $0.001 par value per share,
of which 2,666,667 shares are designated as Series A Convertible
Preferred Stock and none of which are issued and outstanding.
All subscriptions, warrants, options, convertible securities, and other rights
(contingent or other) to purchase or otherwise acquire equity securities of the
Company issued and outstanding as of March 31, 2007, or contracts, commitments,
understandings, or arrangements by which the Company or any of its subsidiaries
is or may be obligated to issue shares of Common Stock, or
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securities or rights convertible or exchangeable for shares of Common Stock, are
as set forth on Schedule 2.8 hereto. Except as set forth on Schedule 2.8, or as
a result of exercises of stock options pursuant to the Company's stock option
and incentive plan, no Common Stock nor any subscription, warrant, option,
convertible security, or other right (contingent or other) to purchase or
otherwise acquire equity securities of the Company is outstanding on the Closing
Date. The issued and outstanding shares of the Company's capital stock have been
duly authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with all applicable federal and state securities laws, and
were not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities. No holder of Common Stock is
entitled to preemptive or similar rights.
2.9. Legal Proceedings. Except as disclosed in the SEC Documents filed
before the date hereof, there is no action, suit or proceeding before any court,
governmental agency or body, domestic or foreign, now pending or, to the actual
knowledge of the Company or any of its Subsidiaries, threatened against the
Company or its Subsidiaries wherein an unfavorable decision, ruling or finding
would reasonably be expected to have a Material Adverse Effect or materially
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under this Agreement.
2.10. No Violations. Neither the Company nor any of its Subsidiaries is in
violation of its Certificate of Incorporation or by-laws, or is in violation of
any law, administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to the Company or
any of its Subsidiaries, which violation, individually or in the aggregate,
would be reasonably likely to have a Material Adverse Effect, or is in default
(and there exists no condition which, with or without the passage of time or
giving of notice or both, would constitute a default) in any material respect in
the performance of any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other material
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound or by which
the properties of the Company are bound, which would be reasonably likely to
have a Material Adverse Effect.
2.11. Governmental Permits, Etc. The Company and its Subsidiaries possess
all necessary franchises, licenses, certificates and other authorizations from
any foreign, federal, state or local government or governmental agency,
department or body that are currently necessary for the operation of their
respective business as currently conducted, except where such failure to possess
could not reasonably be expected to have a Material Adverse Effect.
2.12. Intellectual Property. The Company and its Subsidiaries own or
possess sufficient rights to use all patents, patent rights, trademarks,
copyrights, licenses, inventions, trade secrets, trade names and know-how that
are currently necessary for the conduct of their respective businesses as now
conducted (the "COMPANY INTELLECTUAL PROPERTY"), except where the failure to own
or possess would not have a Material Adverse Effect. Except as set forth in
Schedule 2.12, (i) neither the Company nor any of its Subsidiaries has received
any written notice of, or has any actual knowledge of, any infringement by the
Company or its Subsidiaries of intellectual property rights of any third party
that, individually or in the aggregate, would have a Material Adverse Effect and
(ii) neither the Company nor any of its
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Subsidiaries has received any written notice of any infringement by a third
party of any Company Intellectual Property that, individually or in the
aggregate, would have a Material Adverse Effect.
2.13. Financial Statements. The consolidated financial statements of the
Company and its Subsidiaries and the related notes thereto included in the SEC
Documents present fairly, in all material respects, the financial position of
the Company as of the dates indicated and the results of its operations and cash
flows for the periods therein specified subject, in the case of unaudited
statements, to normal year-end audit adjustments. Except as set forth in such
financial statements (or the notes thereto), such financial statements
(including the related notes) have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified. The financial statements referred to
in this Section 2.13 contain all certifications and statements required by Rule
13a-14 or 15d-14 under the Exchange Act, or 18 U.S.C. Section 1350 (Sections 302
and 906 of the Xxxxxxxx-Xxxxx Act of 2002) with respect to the report relating
thereto.
2.14. No Material Adverse Change. Except as set forth in Schedule 2.14 or
as the Company may have publicly disclosed (and then solely to the extent so
disclosed) in the SEC Documents, press releases or in other "public disclosures"
as such term is defined in Section 101(e) of Regulation FD of the Exchange Act,
in each case, filed or made through and including the date hereof, since
December 31, 2007 there has not been (i) any material adverse change in the
business, assets, financial condition or results of operation of the Company and
its Subsidiaries, taken as whole or any material adverse development in any
government investigation or proceeding disclosed in the SEC Documents, (ii) any
obligation, direct or contingent, that is material to the Company and its
Subsidiaries taken as a whole, incurred by the Company or any of its
Subsidiaries, except obligations incurred in the ordinary course of business,
(iii) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company; or (iv) any loss or damage (whether or not
insured) to the physical property of the Company or any of its Subsidiaries
which has been sustained which has had a Material Adverse Effect.
2.15. American Stock Exchange Listing. The Company's Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and is listed on the
American Stock Exchange ("AMEX"), and the Company has taken no action designed
to, or likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or terminating the listing of the Common Stock from
the AMEX, nor to the Company's knowledge is the AMEX currently contemplating
terminating such listing. The Company and the Common Stock meet the criteria for
continued listing on the AMEX.
2.16. Rule 144A Eligibility. On the Closing Date, the Securities will not
be of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act of 1934, as amended, or quoted in
an automated inter-dealer quotation system.
2.17. Insurance. The Company maintains and will continue to maintain
insurance against loss or damage by fire or other casualty and such other
insurance, including, but not limited to, product liability insurance, in such
amounts and covering such risks as is believed to
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be prudent and customary, consistent with industry practice for the conduct of
its and its Subsidiaries' respective businesses and the value of their
respective properties.
2.18. Tax Matters. The Company and each of its Subsidiaries has timely
filed all material federal, state, local and foreign income and franchise and
other tax returns required to be filed by any jurisdiction to which it is
subject and has paid all taxes due in accordance therewith, except where the
failure to so timely file or pay would not be likely to result in a Material
Adverse Effect, and no tax deficiency has been determined adversely to the
Company or any of its Subsidiaries which has had, nor does the Company or any of
its Subsidiaries have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its Subsidiaries, would reasonably be
expected to have, a Material Adverse Effect.
2.19. Investment Company. The Company is not and, after giving effect to
the offering of the Notes and the application of the proceeds thereof, will not
be an "investment company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the SEC thereunder.
2.20. No Registration, Integration, etc. Assuming (i) the accuracy of the
representations and warranties made by, and compliance with the covenants of,
the Investor in Article 3 hereof and of all other Investors in their respective
Stock Purchase Agreements, and (ii) that the Placement Agents (as defined in
Section 3.8), have conducted all of their activities in relation to the Offering
in a manner permitted by all applicable Federal and state securities or other
applicable laws and in a manner consistent with the Company's ability to rely
upon the exemption from registration provided by Regulation D and Section 4(2)
of the Securities Act, no registration of the Notes under the Securities Act is
required in connection with the offer and sale of the Securities by the Company
to the Investors as contemplated by this Agreement. The Company is currently
eligible to register the resale of the Securities by the Investor pursuant to a
registration statement on Form S-3 under the Securities Act.
2.21. Transactions With Affiliates and Employees. Except as disclosed in
the SEC Documents filed before the date hereof, none of the officers or
directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
2.22. Independent Accountants. BDO Xxxxxxx, LLP, who have certified certain
financial statements of the Company and its Subsidiaries, are independent public
accountants with respect to the Company and its Subsidiaries within the
applicable rules and regulations adopted by the Commission and the Public
Company Accounting Oversight Board (United States) and as required by the
Securities Act.
2.23. No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any director, officer, agent, employee or
stockholder thereof
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acting on behalf of the Company or any of its subsidiaries has (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
2.24. No Integration. Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D) has, directly or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
2.25. No General Solicitation. None of the Company or any of its affiliates
or any other person acting on its or their behalf (other than the Placement
Agents and persons acting on their behalf, as to which no representation is
made) has solicited offers for, or offered or sold, the Securities by means of
any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.
2.26. Xxxxxxxx-Xxxxx Act. There is and has been no failure on the part of
the Company or any of the Company's directors or officers, in their capacities
as such, to comply in all material respects with any provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in
connection therewith (the "Xxxxxxxx-Xxxxx Act"), including Section 402 related
to loans and Sections 302 and 906 related to certifications.
2.27. Disclosure. The Company understands and confirms that the Investor
will rely on the foregoing representations and covenants in effecting
transactions in the securities of the Company. All disclosure provided to the
Investor regarding the Company, its business and the transactions contemplated
hereby furnished by or on behalf of the Company are true and correct and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR.
The Investor represents, warrants and covenants to the Company as follows:
3.1. Securities Law Representations and Warranties.
(a) The Investor represents and warrants that it is a qualified
institutional buyer (a "QIB") within the meaning of Rule 144A promulgated under
the Securities Act or 1933, as amended (the "SECURITIES ACT") and an accredited
investor within the meaning of Rule 501(a) under the Securities Act;
(b) The Investor is acquiring the Securities for its own account and
not with a view towards, or for resale in connection with, the public sale or
distribution thereof;
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(c) The Investor was not organized for the specific purpose of
acquiring the Securities;
(d) The Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Securities except except to
persons whom it reasonably believes to be QIBs in transactions pursuant to Rule
144A under the Securities Act ("RULE 144A") or otherwise in compliance with the
Securities Act, applicable state securities laws and the respective rules and
regulations promulgated thereunder;
(e) The Investor understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of the United States federal and state securities laws and that the Company is
relying upon the truth and accuracy of, and the Investor's compliance with,
representations, warranties, agreements, acknowledgements and understandings of
the Investor set forth herein in order to determine the availability of such
exemptions and the eligibility of the Investor to acquire the Securities;
(f) The Investor understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability
of an investment in the Securities nor have such authorities passed upon or
endorsed the merits of the Offering; and
(g) The Investor acknowledges that the Company has represented that no
action has been or will be taken in any jurisdiction outside the United States
by the Company that would permit an offering of the Securities, or possession or
distribution of offering materials in connection with the issue of the
Securities, in any jurisdiction outside the United States where action for that
purpose is required. If the Investor is located or domiciled outside the United
States it agrees to comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers Securities
or has in its possession or distributes any offering material, in all cases at
its own expense.
(h) The Investor has been furnished with all materials relating to the
business, financial condition, results of operations, properties, management,
operations and prospects of the Company and its Subsidiaries, including
materials relating to the terms and conditions of the offer and sale of the
Securities which have been requested by the Investor. The Investor has been
afforded the opportunity to ask questions of the Company and has received
answers from an authorized representative of the Company which are satisfactory
to the Investor. Notwithstanding the foregoing, in entering into this Agreement,
the Investor represents that it is relying solely on the representations,
warranties, covenants and agreements set forth in this Agreement, which document
supersedes and replaces any other written or oral information communicated to
the Investor.
(i) The Investor has independently evaluated the merits of its
decision to purchase Securities pursuant to this Agreement.
3.2. Legends. The Investor understands that, during the period beginning on
the on the original issue date of the Notes and ending on the date two years
from such date, the
-11-
Securities, including any Securities issued in exchange therefor or in lieu
thereof, will be "Restricted Securities" and will be subject to restrictions on
transfer provided in legends set forth on the face of the Security in accordance
with the requirements of the Indenture until such restrictions have been
terminated under the Indenture and applicable securities laws.
3.3. Authorization; Enforcement; Validity. The Investor has full right,
power, authority and capacity (corporate, statutory or otherwise) to enter into
this Agreement and to consummate the transactions contemplated hereby and has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement. This Agreement constitutes a valid and binding obligation of
the Investor enforceable against the Investor in accordance with its terms,
except (i) to the extent rights to indemnity and contribution may be limited by
state or federal securities laws or the public policy underlying such laws, (ii)
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and (iii) enforceability
may be limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
3.4. Certain Trading Limitations. The Investor (i) represents that on and
from the date the Investor first became aware of the Offering until the date
hereof he, she or it has not and (ii) covenants that for the period commencing
on the date hereof and ending on the public announcement of the Offering he, she
or it will not, engage in any hedging or other transaction which is designed to
or could reasonably be expected to lead to or result in, or be characterized as,
a sale, an offer to sell, a solicitation of offers to buy, disposition of, loan,
pledge or grant of any right with respect to (collectively, a "DISPOSITION") the
Common Stock of the Company by the Investor or any other person or entity in
violation of the Securities Act. Such prohibited hedging or other transactions
would include without limitation effecting any short sale or establishing or
increasing any short position (whether or not such sale or position is against
the box) or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to the Common Stock of the
Company or with respect to any security (other than a broad-based market basket
or index) that derives any significant part of its value from the Common Stock
of the Company.
3.5. No Sale of Securities. The Investor hereby covenants with the Company
not to make any sale of the Securities without (i) complying with the provisions
of this Agreement, and the Registration Rights Agreement or (ii) satisfying the
requirements of the Securities Act and the rules and regulations promulgated
thereunder.
3.6. No Advice. The Investor understands that nothing in this Agreement or
any other materials presented to the Investor in connection with the purchase
and sale of the Securities constitutes legal, tax or investment advice. The
Investor has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Securities.
3.7. NASD Compliance. The Investor acknowledges that if it is a Registered
Representative (as defined by the NASD) of a National Association of Securities
Dealers ("NASD") member firm, the Investor must give such firm the notice
required by the NASD's
-12-
Rules of Fair Practice, receipt of which must be acknowledged by such firm on
the signature page hereof.
3.8. Placement Agent Fees. The Investor acknowledges that (i) the Company
has engaged and authorized UBS Securities LLC and Xxxxxxxxx & Company, Inc
(collectively referred to herein as the "PLACEMENT AGENTS") in connection with
the Offering and the transactions contemplated by this Agreement, (ii) the
Company shall pay the Placement Agents a commission and reimburse the Placement
Agents' expenses and the Company shall indemnify and hold harmless the Investor
from and against all fees, commissions or other payments owing by the Company to
the Placement Agents or any other person or firm acting on behalf of the Company
hereunder and (iii) registered representatives of the Placement Agents and/or
their designees (including, without limitation, registered representatives of
the Placement Agents and/or their designees who may participate in the Offering
and sale of the securities sold in the Offering) may be paid a portion of the
commissions paid to the Placement Agents.
3.9. Treatment of Non-Public Information. The Investor agrees to hold the
existence, terms and conditions of the Offering in confidence and not to
disclose the same to any other person until such time as the Company files with
the SEC a Current Report on Form 8-K disclosing the Offering or publicly
announces the Offering or until the Company notifies the Investor that the
Offering shall not take place (which notice the Company agrees to provide
promptly following a determination that the Offering shall not take place).
3.10. SEC Reports. The Investor has reviewed copies of the Company's Annual
Report on Form 10-K for the year ended December 31, 2006 (and any amendments
thereto), the Company's Proxy Statement for its 2007 Annual Meeting of
Shareholders, the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2007 (and any amendments thereto) and each of the Company's Current
Reports on Form 8-K filed since January 1, 2007 (and any amendments thereto).
4. COVENANTS.
4.1. PORTAL and DTC. The Company, at its sole expense, will take all such
actions as may be reasonably necessary to cause the Notes to be (a) eligible for
clearance and settlement through The Depository Trust Company ("DTC"); and (b)
designated Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") securities in accordance with the NASDAQ Marketplace Rule 6520, et.
seq., or any successor thereto. Until the second anniversary of the Closing Date
(or, with respect to the Company's obligation to keep the Notes designated as
PORTAL securities, the date on which a registration statement covering the
public offering and sale of the Notes shall become effective), the Company shall
(x) take all such steps as may be reasonably necessary to cause the Notes to
continue to be eligible for clearance and settlement through DTC and designated
PORTAL securities; (y) cause its Common Stock to continue to be registered under
Section 12(b) or 12(g) of the Exchange Act, comply in all respects with its
reporting and filing obligations under the Exchange Act; (z) voluntarily comply
with all reporting requirements that are applicable to an issuer with a class of
shares registered pursuant to Section 12(g) of the Exchange Act, if the Company
is not subject to such reporting requirements; and (aa) refrain, and cause its
Affiliates
-13-
to refrain, from offering or distributing the Notes to any person or entity who,
at the time of such offering or distribution, is not a QIB.
4.2. Trading Market. The Company shall use commercially reasonable efforts
to comply with all requirements of the AMEX with respect to the issuance and
listing of the Underlying Securities and the continued listing of its Common
Stock (including the Underlying Securities). The Company agrees that if the
Company applies to have its Common Stock traded on any other trading market, it
will use commercially reasonable efforts to cause the Underlying Securities to
be listed or quoted on such other trading market.
4.3. Certain Future Financings and Related Actions. Without the prior
consent of the Investor, the Company shall not cause the Offering to be
integrated with prior offerings by the Company in a manner that would require
the registration under the Securities Act of the sale of the Securities to the
Investor or in a manner that would require stockholder approval of the sale of
the Securities to the Investor.
4.4. Public Disclosure. The Company shall publicly announce the Offering
promptly after the execution of this Agreement, but in any event prior to 9:00
a.m. on the immediately following business day, and make such other filings and
notices in the manner and within the time required by the SEC.
4.5. Use of Proceeds. The Company will use the net proceeds from the sale
of the Notes pursuant to this Agreement for working capital and general
corporate purposes and for acquisitions financing.
4.6. Underlying Securities. The Company will reserve and keep available at
all times, free of pre-emptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy all obligations to issue the Underlying
Securities upon conversion of the Notes.
4.7. Supplying Information. While the Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will, during any period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, furnish to holders of the
Notes and prospective purchasers of the Notes designated by such holders, in
each case upon request, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.
4.8. Indenture Qualification. Prior to any registration of the Securities
pursuant to the Registration Rights Agreement, or at such earlier time as may be
so required, the Company will qualify the Indenture under the Trust Indenture
Act of 1939, as amended (the "TIA"), and enter into any necessary supplemental
indentures in connection therewith.
4.9. No Resales by the Company. During the period from the Closing Date
until two years after the Closing Date, the Company will not, and will not, to
the extent of its power to do so, permit any of its affiliates (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities that have
been acquired by any of them, except for Securities purchased by the Company or
any of its affiliates and resold in a transaction registered under the
Securities Act.
-14-
4.10. No Stabilization. The Company will not take, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Securities and will not
take any action prohibited by Regulation M under the Exchange Act in connection
with the distribution of the Securities contemplated hereby.
5. REGISTRATION OF SECURITIES AND COMPLIANCE WITH THE SECURITIES ACT.
5.1. Registration Rights Agreement. The Investor and each of the Other
Investors (including their direct and indirect transferees) will be entitled to
the benefits of a Registration Rights Agreement, to be dated the Closing Date
and substantially in the form attached hereto as EXHIBIT D (the "REGISTRATION
RIGHTS AGREEMENT").
6. MISCELLANEOUS.
6.1. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (b) if within the United States
by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (b) if delivered
from outside the United States, by International Federal Express or facsimile,
and shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if delivered
by nationally recognized overnight carrier, one business day after so mailed,
(iii) if delivered by International Federal Express, two business days after so
mailed, and (iv) if delivered by facsimile, upon electric confirmation of
receipt if sent during the normal business hours of the recipient and, if not,
on the next business day, and shall be delivered as addressed as follows:
if to the Company, to:
Xxx XxXxxxxx, Esq.
Inverness Medical Innovations, Inc.
00 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxxx
Tel: 000.000.0000
Fax: 000.000.0000
Email: xxx.xxxxxxxx@xxx.xxxxxxxxxxxxxxxx.xxx
with a copy to:
Xxxx X. Xxxxxxxxx Xx., Esq.
Xxxxx Xxxx LLP
World Trade Center West
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Tel: 000.000.0000
Fax: 000.000.0000
-15-
Email: xxx@xxxxxxxxx.xxx
if to the Investor, at its address on the signature page hereto, or at such
other address or addresses as may have been furnished to the Company in writing.
6.2. Changes. This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and the Investor.
6.3. Headings. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
6.4. Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
6.5. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Notes being purchased and the payment therefor unless
otherwise stated herein.
6.6. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
6.7. Entire Agreement. This Agreement and the documents referenced herein
(including the Indenture and the Registration Rights Agreement) constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the parties.
6.8. Finders Fees. Neither the Company nor the Investor nor any affiliate
thereof has incurred any obligation which will result in the obligation of the
other party to pay any finder's fee or commission in connection with this
transaction, except for fees payable by the Company to the Placement Agents.
6.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other party. Facsimile signatures shall be deemed originals for
all purposes hereunder.
6.10. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, heirs, executors and administrators and
permitted assigns of the parties hereto. With respect to transfers that are not
made pursuant to the Registration Statement (or Rule 144 but are otherwise made
in accordance with all applicable laws and the terms of this Agreement), the
rights and obligations of the Investor under this Agreement shall
-16-
be automatically assigned by the Investor to any transferee of all or any
portion of the Investor's Notes who is a Permitted Transferee (as defined
below); provided, however, that within two business days prior to the transfer,
(i) the Company is provided written notice of the transfer including the name
and address of the transferee and the number of Shares as applicable to be
transferred; and (ii) that such transferee agrees in writing to be bound by the
terms of this Agreement as if such transferee were the Investor. (For purposes
of this Agreement, a "PERMITTED TRANSFEREE" shall mean any person or entity who
(a) is a QIB and an "accredited investor," as that term is defined in Rule
501(a) of Regulation D under the Securities Act, (b) receives the Notes in a
transaction which is in compliance with the Federal and applicable state
securities law. Upon any transfer permitted by this Section 6.10, the Company
shall be obligated to such transferee to perform all of its covenants under this
Agreement as if such transferee was the Investor.
6.11. Expenses. The Company and the Investor shall bear its or his own
expenses in connection with the preparation and negotiation of the Agreement.
6.12. Third Party Rights. Except as explicitly set forth in this Agreement,
nothing in this Agreement shall create or be deemed to create any rights in any
person or entity not a party to this Agreement. Notwithstanding the foregoing,
the Placement Agents shall be deemed to be third-party beneficiaries of the
representations, warranties and covenants made by the Investor herein.
6.13. No Waiver. It is agreed that a waiver by either party of a breach of
any provision of this Agreement shall not operate, or be construed, as a waiver
of any subsequent breach by that same party.
6.14. Further Assurances. The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement.
6.15. Independent Nature of Investors' Obligations and Rights. The
obligations of each of the Investor and the Other Investors that is
participating in the Offering are several and not joint. The decision of each of
the Investor and the Other Investors to purchase Notes pursuant to this
Agreement has been made by such Investor independently of any Other Investor.
Nothing contained herein and no action taken by Investor shall be deemed to
constitute the Investor and the Other Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Investor and the Other Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement. Investor acknowledges that no Other Investor has
acted as agent for such Investor in connection with making its investment
hereunder and that no Other Investor will be acting as agent of such Investor in
connection with monitoring its investment in the Notes or enforcing its rights
under this Agreement. Investor shall be entitled to independently protect and
enforce its rights, including without limitation the rights arising out of this
Agreement and it shall not be necessary for any Other Investor to be joined as
an additional party in any proceeding for such purpose. The Company acknowledges
that each of the Investor and the Other Investors has been provided with this
Agreement for the purpose of
-17-
closing a transaction with multiple investors and not because it was required or
requested to do so by the Investor or the Other Investors.
6.16 Limitation on Liability. A copy of the Agreement and Declaration of
Trust of the Investor is on file with the Secretary of the Commonwealth of
Massachusetts and notice is hereby given that this Agreement is executed on
behalf of the Trustees of the Investor as Trustees and not individually and that
the obligations of this Agreement are not binding upon any of the Trustees,
officers or stockholders of the Investor individually but are binding only upon
the assets and property of the Investor. The Company is expressly put on notice
that the rights and obligations of each series of shares of the Investor under
its Declaration of Trust are separate and distinct from those of any and all
other series.
6.17 Publicity. The Company agrees that it will not use in advertising or
publicity the names of the Investor, Fidelity Management & Research Company, any
of its partners or employees, any of the funds or accounts managed by it or any
of its affiliates, or any trade name, trademark, trade device, service xxxx,
symbol or any abbreviation, contraction or simulation thereof (collectively, the
"Fidelity Investor Name"), in any case without the prior written consent of
Fidelity Management & Research Company Investor; provided, however, that the
Company shall be permitted to use the Fidelity Investor Name in the press
release and/or other public disclosure contemplated in Section 4.4.
[SIGNATURE PAGES FOLLOW]
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COMPANY SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties have caused this Securities Purchase
Agreement to be duly executed as of the date first written above.
INVERNESS MEDICAL INNOVATIONS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Principal Amount of Note Subscription
Accepted $_____
INVESTOR SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT
* SEE SCHEDULE OF INVESTORS BELOW
----------------------------------------
(print full legal name of Investor)
By:
------------------------------------
(signature of authorized representative)
Name:
----------------------------------
Its:
-----------------------------------
Address:
-------------------------------
-------------------------------
-------------------------------
Telephone:
-----------------------------
Email:
---------------------------------
Tax I.D. or SSN:
-----------------------
Address or account where Notes should be
sent:
-----------------------------------
-----------------------------------
-----------------------------------
PRINCIPAL AMOUNT OF NOTES SUBSCRIBED
FOR:
----------------------------------------
AGGREGATE PURCHASE PRICE:
----------------------------------------
INVESTOR SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT (CONT.)
If Investor is a Registered Representative with an NASD member firm, have the
following acknowledgment signed by the appropriate party:
The undersigned NASD member firm acknowledges receipt of the notice required by
Rule 3040 of the NASD Conduct Rules.
-------------------------------------
Name of NASD Member
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
* SCHEDULE OF INVESTORS
PRINCIPAL
NAME AMOUNT
---- -----------
*Fidelity Puritan Fund: Fidelity Balanced Fund 9,274,000
*Fidelity Advisor Series I Fidelity Advisor Balanced Fund 517,000
*Variable Insurance Products Fund III: Balanced Portfolio 186,000
*Fidelity Financial Trust: Fidelity Convertible Securities Fund 21,000,000
*Fidelity Advisor Series VII: Fidelity Advisor Health Care Fund 719,000
*Variable Insurance Products Fund IV: Health Care Portfolio 86,000
*Fidelity Select Portfolios: Health Care Portfolio 2,190,000
*Fidelity Select Portolios: Medical Delivery Portfolio 677,000
*Fidelity Central Investment Portfolio LLC: Fidelity Healthcare Central Investment Portfolio 851,000
*Fidelity Financial Trust: Fidelity Strategic Dividend & Income Fund 4,000,000
Xxxxxx Xxxxxxx Convertible Securities Trust 1,700,000
Xxx Xxxxxx Harbor Fund 3,300,000
Evergreen Strategic Income 13,500,000
Evergreen Strategic Income VA 4,000,000
Xxxxxxxxx & Company, Inc. 25,000,000
OCM Convertible Trust 1,685,000
Delaware Public Employee's Retirement System 2,985,000
Vanguard Convertible Securities Fund Inc. 8,400,000
Microsoft Capital Group, L.P. - Domestic Convertible 530,000
International Truck & Engine Corporation NonContributory Retirement Plan Trust 515,000
International Truck & Engine Corporation Retirement Plan for Salaried Employees Trust 285,000
International Truck and Engine Corporation Retiree Health Benefit Trust 310,000
X.X. Xxxxx Foundation Inc. 915,000
Virginia Retirement System 5,330,000
ACE Tempest Reinsurance Ltd. - Domestic Convertible 1,185,000
National Railroad Retirement Investment Trust 2,860,000
Xxxxxx Privelege Portfolio SICAV 10,000,000
Arkansas P.E.R.S. 1,525,000
Boilermakers Blacksmith Pension Trust 1,665,000
FPL Group Employees Pension Plan 810,000
Columbia Convertible Securities Fund 10,000,000
Mill River Master Fund, L.P. 8,000,000
Blue Chip Multi-Strategy Master Fund L.P. 2,000,000
Allstate Insurance Company 4,000,000
-----------
TOTAL 150,000,000
===========
* This Investor, or an affiliate thereof, has filed a disclosure on Form SC-13G
with the SEC disclosing holdings of greater than 5% of our common stock.
EXHIBIT A
INDENTURE
EXHIBIT B
COMPANY WIRE TRANSFER INSTRUCTIONS
Citizens Bank
Providence, Rhode Island, USA
Swift Code: XXXXXX00
ABA#: 000000000
Acct#: 1109501967
Acct Name: Inverness Medical Innovations, Inc.
EXHIBIT C
OPINION OF COUNSEL
Draft dated May 9, 2007
Subject to Opinion Committee Review
May __, 2007
To the Investors identified
on Schedule A attached hereto
Re: Inverness Medical Innovations, Inc.
Ladies and Gentlemen:
We have acted as counsel to Inverness Medical Innovations, Inc., a
corporation incorporated under the laws of the State of Delaware (the
"Company"), in connection with the issuance and sale of up to $_____ aggregate
principal amount of the __% Convertible Senior Subordinated Notes Due 2016 (the
"Notes") pursuant to the Securities Purchase Agreement (the "Purchase
Agreement"), dated May __, 2007, between the Company and you. This opinion is
being provided to you pursuant to Section 1.6(a) of the Purchase Agreement.
Except as may be otherwise indicated, capitalized terms used herein have the
same meaning as in the Securites Purchase Agreement.
In connection with rendering the opinions set forth herein, we have
examined the Purchase Agreement, the Registration Rights Agreement, the
Indenture, and the Company's Certificate of Incorporation, and its bylaws, each
as amended to date, the proceedings of the Company's board of directors taken in
connection with entering into the Purchase Agreement and the transactions
contemplated thereby, and such other documents, agreements and records and such
certificates and other documents of public officials and officers and
representatives of the Company as we deemed necessary to render the opinions set
forth below.
In conducting our examination, we have assumed the following: (i) that each
of the Purchase Agreement and the Registration Rights Agreement has been
executed by you, (ii) the genuineness of all signatures, and the legal capacity
of natural persons, (iii) that each of the Purchase Agreement and the
Registration Rights Agreement has been duly and validly authorized, executed,
and delivered by you, (iv) that each of the Purchase Agreement and the
Registration Rights Agreement constitutes the valid and binding agreement of
yours, enforceable against you in accordance with its terms, and (v) the
authenticity of all documents submitted to us as originals and the conformity to
authentic original documents of all documents submitted to us as certified or
photostatic copies.
In rendering the opinions set forth below, we have relied, as to all
questions of fact material to any such opinion, upon certificates of public
officials and officers of the Company and upon the representations and
warranties of the Company and you contained in the Purchase Agreement. We have
assumed that you have all requisite power and authority to execute, deliver
and perform the Purchase Agreement and the Registration Rights Agreement, that
you have duly and validly executed and delivered the Purchase Agreement and the
Registration Rights Agreement and that each of the Purchase Agreement and the
Registration Rights Agreement constitutes your valid, binding and enforceable
obligation. No opinion is given herein as to the availability of any specific or
equitable relief of any kind, as to the enforceability of any particular remedy
provided in the Purchase Agreement or the Registration Rights Agreement, or as
to the extent to which any provision of the Purchase Agreement or the
Registration Rights Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, usury, marshaling, public
policy or other laws affecting the rights of contractual parties generally or by
the application of general principles of equity (whether applied by a court of
law or in equity), and we express no opinion concerning the provisions of any
agreement purporting to provide (a) indemnification or contribution to any
person for violation of federal or state securities laws or (b) waivers of
constitutional rights (all the limitations set forth in this sentence being
hereinafter referred to as the "Enforceability Exceptions").
Our opinion expressed in paragraph 1, with respect to legal existence and
good standing of the Company, is based solely upon (i) a certificate of the
Secretary of State of the State of Delaware as to the legal existence and
corporate good standing of the Company and (ii) a certificate of the Secretary
of the Commonwealth of The Commonwealth of Massachusetts as to the qualification
of the Company to do business in The Commonwealth of Massachusetts. We express
no opinion herein as to the tax good standing of the Company. Our opinion
expressed in paragraph 9, with respect to the listing of the Underlying
Securities on the American Stock Exchange, is based solely upon a review of the
Amendment to Additional Listing Application, dated May __, 2007, of the Company.
As used in certain of the opinions set forth below, the phrase "our
knowledge," or any similar phrase, means the actual knowledge of the lawyers
within our firm who have worked on the transactions contemplated by the Purchase
Agreement without any special investigation with respect to the matter as to
which any such opinion is so qualified.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is validly existing as a corporation in good standing under
the laws of the State of Delaware and is duly qualified to transact business in
The Commonwealth of Massachusetts. The Company has all requisite corporate power
and authority to own its properties and conduct its business.
2. The Purchase Agreement has been duly authorized, executed and delivered
by the Company and, when duly executed and delivered by the other parties
thereto, will constitute a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to the
Enforceability Exceptions.
3. The Indenture has been duly authorized, executed and delivered by the
Company and, assuming due execution and delivery thereof by the Trustee,
constitutes a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, subject to the Enforceability
Exceptions.
4. The Notes have been duly authorized, executed and delivered by the
Company and, when duly authenticated as provided in the Indenture and paid for
as provided in the Purchase Agreement, will be duly and validly issued and
outstanding and will constitute valid
and legally binding obligations of the Company enforceable against the Company
in accordance with their terms, subject to the Enforceability Exceptions, and
will be entitled to the benefits of the Indenture and the Registration Rights
Agreement.
5. The Underlying Securities reserved for issuance upon conversion of the
Notes have been duly authorized and reserved and, when issued upon conversion of
the Notes in accordance with the terms of the Notes, will be validly issued,
fully paid and non-assessable and the issuance of the Underlying Securities will
not be subject to any preemptive or similar rights under the Company's charter
or bylaws or under Delaware law.
7. The Registration Rights Agreement has been duly authorized, executed and
delivered by the Company and, when duly executed and delivered by the other
parties thereto, will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, subject to
the Enforceability Exceptions.
8. The Common Stock is registered pursuant to Section 12(b) of the
Securities Exchange Act of 1934, as amended, and to our knowledge, the Company
has timely filed all the reports required to be filed pursuant to Sections 13(a)
or 15(d) of such Act for a period of twelve months preceding the date hereof.
9. The Notes have been authorized for trading on PORTAL. The Underlying
Securities have been authorized for listing on the American Stock Exchange.
10. To our knowledge, the execution, delivery and performance of the
Purchase Agreement, the Indenture, the Notes and the Registration Rights
Agreement by the Company and the performance of its obligations thereunder do
not and will not constitute a breach or violation of any of the terms and
provisions of, or constitute a default under or conflict with or violate any
provision of (i) the Company's Certificate of Incorporation or by-laws, each as
currently in effect, or (ii) any applicable statute or regulation or (iii) any
judgment, decree or order of any court or governmental body having jurisdiction
over the Company or any of its property listed in any schedule to the Purchase
Agreement.
11. Assuming the representations and warranties of the Company and you set
forth in the Agreement and the exhibits thereto are true and correct, the offer,
sale and delivery of the Notes to you and the issuance of the Underlying
Securities upon conversion of the Notes, in the manner contemplated by the
Purchase Agreement, is exempt from registration under the Securities Act.
12. The issuance of the Notes, and the issuance of the Underlying
Securities upon conversion of the Notes, does not require approval of the
Company's stockholders pursuant to the American Stock Exchange Company Guide and
the listing rules provided therein.
This opinion is rendered only with regard to the matters set out in the
numbered paragraphs above. No other opinions are intended nor should they be
inferred. This opinion is rendered solely as to the laws of the United States
and The Commonwealth of Massachusetts, and the Delaware General Corporation Law.
Insofar as each of the Purchase Agreement, the Registration Rights Agreement,
and the Indenture purports to be governed by the laws of the State of New York,
we have assumed that such laws are identical in all respects to the laws of The
Commonwealth of Massachusetts.
The opinions expressed herein are given to you solely for your use in
connection with the transaction contemplated by the Purchase Agreements and may
not be relied upon by any other person or entity or for any other purpose
without our prior consent.
Very truly yours,
XXXXX XXXX LLP
By:
------------------------------------
a Partner
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
