<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 17, 1998
--------------------------
ABAXIS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 000-19720 77-0213001
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer)
incorporation or organization) Identification No.)
1320 CHESAPEAKE TERRACE, SUNNYVALE, CA 94089
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 734-0200
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Certificate of Determination of Rights, Preferences, Privileges and Restrictions
of Series C Preferred Stock of Abaxis, Inc.
10.25 Form of Offshore Securities Subscription Agreement dated November 17, 1998
10.26 Management Rights Agreement dated November 17, 1998
99.1 Press Release dated November 18, 1998 announcing the execution of the Offshore
Securities Subscription Agreement.
</TABLE>
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
On November 17, 1998, Abaxis, Inc. (the "Company") closed the sale of
4,000 shares of Series C Convertible Preferred Stock ("Series C Preferred
Stock") to non-U.S. purchasers located outside the United States (the "Series C
Financing"). The Company sold the Series C Preferred Stock at a price of $1,000
per share for a total offering price of $4,000,000. The Company realized net
proceeds for the sale, after fees, totaling approximately $3,840,000. The
Company plans to use the net proceeds for capital equipment expenditures and
general working capital purposes. The Company claims exemption from registration
of the sale of the Series C Preferred Stock pursuant to Regulations 230.901
through 230.905 ("Regulation S") of the Securities Act of 1933, as amended (the
"Securities Act"). The Company sold the Series C Preferred Stock only in
off-shore transactions, and the Company did not offer or sell to any U.S.
persons (as defined in the Securities Act). Neither the Company, its affiliates
nor any of their respective representatives engaged in any directed selling
efforts with respect to the Series C Preferred Stock, and the Company
implemented the appropriate offering restrictions with respect to the Series C
Preferred Stock.
The Series C Preferred Stock is convertible into the Company's Common
Stock at the initial conversion price of $2.50 (the "Series C Conversion
Price"). The Series C Conversion Price is subject to adjustment for stock
splits, stock combinations, recapitalizations and the like as more fully set
forth in the Certificate of Designation for the Series C Preferred Stock (the
"Certificate of Designation"). The Series C Preferred Stock may be converted
into the Company's Common Stock at any time after issuance thereof. The number
of shares of Common Stock into which each share of Series C Preferred Stock may
be converted shall be determined by dividing $1,000 by the Series C Conversion
Price in effect at the time of conversion. Each share shall automatically be
converted upon the earlier to occur of: (i) October 31, 2001; provided, however,
that if the closing sales price of the Common Stock as reported on the Nasdaq
National Market System is less than $2.50 (as adjusted to reflect any stock
dividends, stock splits, stock combinations or recapitalizations) for each of
the twenty (20) consecutive trading days immediately prior to and including
October 31, 2001, then the Series C Preferred Stock will convert into Common
Stock automatically upon the earlier to occur of (A) October 31, 2002 or (B) on
the first date following the first anniversary of the date of filing the
Certificate of Designation that the closing sales price of the Company's
<PAGE> 3
Common Stock as reported on the Nasdaq National Market System has exceeded $5.00
(as adjusted to reflect any stock dividends, stock splits, stock combinations,
recapitalizations or similar events) for the twenty (20) consecutive trading
days immediately prior to such date (the "Market Conversion Date"); and
provided, further, however, that if the closing sales price of the Common Stock
as reported on the Nasdaq National Market System is $2.50 or greater for any
twenty (20) consecutive trading days following the first anniversary of the
filing of the Certificate of Designation, then the one year extension of the
automatic conversion date provided for in the preceding clause above, will not
apply, and the conversion date will remain the earlier to occur of (A) October
31, 2001 or (B) the Market Conversion Date; or (ii) the Market Conversion Date.
The Company has agreed to file a registration statement no later than
forty-five (45) days after the execution date of the Offshore Securities
Subscription Agreement and has agreed to keep the registration effective until
the earlier of one year thereafter or until all the Series C Preferred Stock has
been resold pursuant to an effective registration statement.
In connection with the Series C Financing, the Company granted
certain rights to information of the Company to NeoMed Innovation ASA
("NeoMed"), one of the purchasers of the Series C Preferred Stock, pursuant to a
Management Rights Letter. These rights include the right of NeoMed to attend, in
a non-voting capacity, meetings of the Company's Board of Directors and the
right to receive all materials prepared for the Board of Directors. In
connection with these rights, NeoMed has agreed to be bound by the terms of the
Company's Insider Trading Policy Manual.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated this 25th day of November, 1998.
Abaxis, Inc.
By: /s/ Donald Stewart
---------------------------------
Donald Stewart
Chief Financial Officer
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.1 Certificate of Determination of Rights, Preferences, Privileges and Restrictions of Series C
Preferred Stock of Abaxis, Inc.
10.25 Form of Offshore Securities Subscription Agreement dated November 17, 1998
10.26 Management Rights Agreement dated November 17, 1998
99.1 Press Release dated November 18, 1998 announcing the execution of the Offshore Securities
Subscription Agreement.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
CERTIFICATE OF DETERMINATION
OF RIGHTS, PREFERENCES,
PRIVILEGES AND RESTRICTIONS
OF
SERIES C PREFERRED STOCK
OF
ABAXIS, INC.
A California corporation
(Pursuant to Section 401 of the
California General Corporation Law)
Clinton H. Severson and Donald Stewart certify that:
1. They are the duly elected and acting President and Secretary,
respectively, of said Corporation.
2. Pursuant to authority given by said Corporation's Articles of
Incorporation, the Board of Directors of said Corporation has duly adopted the
following recitals and resolutions:
WHEREAS, the Articles of Incorporation of the Corporation provide for
a class of its authorized shares known as Preferred Stock, comprising Five
Million (5,000,000) shares issuable from time to time in one or more series;
WHEREAS, the Board of Directors of this Corporation is authorized to
fix the number of shares of any series of Preferred Stock; to determine the
designation of any such series, and to determine or alter the rights,
preferences, privileges, and restrictions granted to or imposed upon any wholly
unissued series of Preferred Stock including but not limited to the dividend
rights, dividend rate and conversion rights, and to fix, alter or reduce the
number of shares constituting any such series (but not below the number of
shares then outstanding); and
WHEREAS, it is the desire of the Board of Directors of the
Corporation, pursuant to its authority under the Articles of Incorporation, to
fix the rights, preferences, privileges, restrictions and other matters relating
to a series of Preferred Stock to be designated Series C Preferred Stock;
NOW THEREFORE, BE IT RESOLVED, that the Board of Directors does
hereby provide for the issue of a new series of Preferred Stock of the
Corporation and does hereby fix the rights, preferences, privileges,
restrictions and other matters relating to such series of Preferred Stock as
follows:
1. Designation. There shall be a series of Preferred Stock, which
shall comprise Five Thousand (5,000) shares and shall be designated "Series C
Preferred Stock." As used hereafter, the terms "Preferred Stock" and "Preferred
Shares" without designation shall refer to shares of Series C Preferred Stock.
1
<PAGE> 2
2. Dividends. Each holder of record of a share of Series C Preferred
Stock shall be entitled to receive, out of any assets at the time legally
available therefore, a dividend of Sixty Dollars ($60) per share per annum,
payable on April 1st and September 1st of each year. The right to the dividends
on the Series C Preferred Stock described in the preceding sentence shall be
cumulative. The Corporation will pay such dividends either in cash or by issuing
shares of the Corporation's Common Stock ("Common Stock") having the Market
Value (as defined below) equal to such dividends, at the option of the Board of
Directors of the Corporation. If the Corporation elects to pay such dividends by
issuing Common Stock, the "Market Value" of such Common Stock will be the
average of the closing sale prices of the Corporation's Common Stock as reported
on the Nasdaq National Market System for the Five (5) trading days prior to the
record date for such dividend. A holder of Series C Preferred Stock who would
otherwise be entitled to receive a fraction of a share of Common Stock under
this Section 2 (taking into account all shares of Series C Preferred Stock held
by such holder) shall receive, in lieu thereof, an amount equal to the product
of such fractional interest multiplied by the Market Value. No dividends or
distributions shall be made with respect to the Common Stock unless at the same
time an equivalent dividend with respect to the Series C Preferred Stock has
been paid or declared and set apart for payment.
3. Conversion Rights. The holders of Series C Preferred Stock shall
have conversion rights as follows:
(a) Right to Convert. Each share of Series C Preferred Stock shall
be convertible, at the option of the holder thereof, at any time after the date
of filing of this Certificate of Designation, at the office of the Corporation
or any transfer agent for the Series C Preferred Stock, into Common Stock as
more fully described below. The number of shares of fully paid and nonassessable
Common Stock into which each share of Series C Preferred Stock may be converted
shall be determined by dividing One Thousand Dollars ($1,000) by the Series C
Conversion Price (as hereinafter defined) in effect at the time of conversion.
The Series C Conversion Price shall initially be Two Dollars and Fifty Cents
($2.50), as adjusted to reflect any stock dividends on, or stock splits or stock
combinations of, the Common Stock after the date of filing this Certificate of
Designation (the "Series C Conversion Price").
(b) Automatic Conversion. Each share of Series C Preferred Stock
shall be converted into Common Stock automatically upon the earlier to occur of:
(i) October 31, 2001; provided however, that if the
closing sales price of the Common Stock as reported on the Nasdaq National
Market System is less than $2.50 (as adjusted to reflect any stock dividends,
stock splits, stock combinations or recapitalizations) for each of the twenty
(20) consecutive trading days immediately prior to and including October 31,
2001, then the Series C Preferred Stock will convert into Common Stock
automatically upon the earlier to occur of (A) October 31, 2002 or (B) the event
specified in Section 3(b)(ii), below; and provided further, however, that if the
closing sales price of the Common Stock as reported on the Nasdaq National
Market System is $2.50 or greater for any twenty (20) consecutive trading days
after the first anniversary of the filing of this Certificate of Designation,
then the one year extension of the automatic conversion date provided for in
2
<PAGE> 3
subsection (i)(A) above will not apply and the conversion date will remain the
earlier to occur of (A) October 31, 2001 or (B) the event specified in Section
3(b)(ii), below; or
(ii) on the first date following the first anniversary of
the date of the filing of this Certificate of Designation that the closing sales
price of the Common Stock as reported on the Nasdaq National Market System has
exceeded $5.00 (as adjusted to reflect any stock dividends, stock splits, stock
combinations or recapitalizations) for the twenty (20) consecutive trading days
immediately prior to such date.
(c) No Fractional Shares. No fractional shares of Common Stock or
script shall be issued upon conversion of shares of Series C Preferred Stock. If
more than one share of Series C Preferred Stock shall be surrendered for
conversion at any one time by the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of Series C Preferred Stock so surrendered. In
lieu of any fractional shares of Common Stock that would otherwise be issuable
upon conversion of any shares of Series C Preferred Stock, the Corporation shall
pay a cash adjustment in respect to such fractional interest equal to the
product of such fractional interest multiplied by the Series C Conversion Price.
(d) Mechanics of Conversion. Before any holder of Series C
Preferred Stock shall be entitled to convert the same into Common Stock, and
before the Corporation shall be obligated to issue certificates for shares of
Common Stock upon the automatic conversion of the Series C Preferred Stock as
set forth in Section 3(b) hereof, such holder shall surrender the certificate or
certificates therefor, duly endorsed in blank or accompanied by proper
instruments of transfer, at the principal office of the Corporation or of any
transfer agent for the Series C Preferred Stock, and, if such conversion is
voluntary pursuant to Section 3(a), shall give written notice to the Corporation
at such office that such holder elects to convert the same and shall state in
writing therein the name or names in which such holder wishes the certificate or
certificates for Common Stock to be issued. As soon as practicable thereafter,
the Corporation shall issue and deliver at such office to such holder's nominee
or nominees, certificates for the number of whole shares of Common Stock to
which such holder shall be entitled. If such conversion is pursuant to Section
3(a), such conversion shall be deemed to have been made as of the date of such
surrender of the Series C Preferred Stock to be converted, and the person or
persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
on said date.
(e) Capital Adjustments. In case the Corporation shall at any time
(A) subdivide the outstanding Common Stock, or (B) issue a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock issuable upon
conversion of the Series C Preferred Stock immediately prior to such subdivision
or the issuance of such stock dividend shall be proportionately increased by the
same ratio as the subdivision or dividend (with appropriate decreases in the
Series C Conversion Price). In case the Corporation shall at any time combine
its outstanding Common Stock, the number of shares of Common Stock issuable upon
conversion of the Series C Preferred Stock immediately prior to such combination
shall be proportionately decreased by the same ratio as the combination (with
appropriate increases in the
3
<PAGE> 4
Series C Conversion Price). All such adjustments described herein shall be
effective at the close of business on the date of such subdivision, stock
dividend or combination, as the case may be.
(f) Reorganization. In case of any capital reorganization (other
than in connection with a merger or other reorganization in which the
Corporation is not the continuing or surviving entity), or any reclassification
of the Common Stock of the Corporation, the Series C Preferred Stock shall
thereafter be convertible into that number of shares of stock or other
securities or property to which a holder of the number of shares of Common Stock
of the Corporation deliverable upon conversion of the shares of Series C
Preferred Stock immediately prior to such reorganization or recapitalization
would have been entitled to receive upon such reorganization or
reclassification. In any such case, appropriate adjustment (as determined by the
Board of Directors) shall be made in the application of the provisions herein
set forth with respect to the rights and interests thereafter of the holders of
Series C Preferred Stock, such that the provisions set forth herein shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
share of stock or other property thereafter deliverable upon the conversion.
(g) Reservation of Stock. The Corporation shall at all times
reserve and keep available, out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of the Series C Preferred
Stock, the full number of shares of Common Stock deliverable upon the conversion
of all Series C Preferred Stock from time to time outstanding. The Corporation
shall from time to time (subject to obtaining necessary director and shareholder
action), in accordance with the laws of the State of California, increase the
authorized amount of its Common Stock if at any time the authorized number of
shares of Common Stock remaining unissued shall not be sufficient to permit the
conversion of all of the shares of Series C Preferred Stock at the time
outstanding.
4. Voting Rights. The holders of the Series C Preferred Stock shall
have no voting power whatsoever, except as otherwise provided by the General
Corporation Law of the State of California ("California Law"), and no holder of
Series C Preferred Stock shall vote or otherwise participate in any proceeding
in which actions shall be taken by the Corporation or the stockholders thereof
or be entitled to notification as to any meeting of the stockholders (except to
the extent the a holder of Series C Preferred Stock is also a holder of Common
Stock).
To the extent that under California Law the vote of the holders of
the Series C Preferred Stock, voting separately as a class, is required to
authorize a given action of the Corporation, the affirmative vote or consent of
the holders of at least a majority of the shares of Series C Preferred Stock
represented at a duly held meeting at which a quorum is present or by written
consent of a majority of the number of shares of outstanding Series C Preferred
Stock (except as otherwise may be required under California Law) shall
constitute the approval of such action by the class. To the extent that under
California Law the holders of the Series C Preferred Stock are entitled to vote
on a matter with holders of Common Stock, voting together as one (1) class, each
share of Series C Preferred Stock shall be entitled to a number of votes equal
to the number of shares of Common Stock into which it is then convertible using
the record date for the taking of such vote of stockholders as the date as of
which the Series C Conversion Price is calculated. Holders of the Series C
Preferred Stock also shall be entitled to notice of all shareholder meetings or
written
4
<PAGE> 5
consents with respect to which they would be entitled to vote, which notice
would be provided pursuant to the Corporation's by-laws and applicable statutes.
RESOLVED FURTHER, that the President or any Vice President, and the
Secretary or any Assistant Secretary, of the Corporation be, and hereby are,
authorized and directed to execute, acknowledge, file and record a Certificate
of Determination of preferences in accordance with the foregoing resolutions and
the provisions of California law.
5. The authorized number of shares of Series C Preferred Stock is
Five Thousand (5,000), none of which has been issued.
5
<PAGE> 6
The undersigned declare under penalty of perjury under the laws of
the State of California that the matters set forth in the foregoing Certificate
are true and correct of their own knowledge. Executed at Sunnyvale, California
on October 30, 1998.
/s/ Clinton H. Severson
-----------------------------------
Clinton H. Severson
President
/s/ Donald Stewart
-----------------------------------
Donald Stewart
Secretary
6
<PAGE> 1
EXHIBIT 10.25
FORM OF
ABAXIS, INC.
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
THIS OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT (the "Agreement") is
executed in reliance upon the transaction exemption afforded by Regulation S
("Regulation S") as promulgated by the Securities and Exchange Commission (the
"SEC"), under the Securities Act of 1933, as amended (the "1933 Act").
THIS AGREEMENT has been executed by the undersigned in connection
with the private placement of up to _____________ (_____) shares of its Series C
Preferred Stock (hereinafter referred to as the "Shares") of ABAXIS, INC., a
corporation organized under the laws of California, United States of America,
(hereinafter referred to as "Seller"). The undersigned, _____________________, a
_______ corporation located at _______________________________ (hereinafter
referred to as "Subscriber"), hereby represents and warrants to, and agrees with
Seller as follows:
1. Agreement to Subscribe; Subscription Price.
(a) Number of Shares; Purchase Price. The undersigned hereby
agrees to purchase from Seller _____ Shares at an aggregate purchase price of
___________ United States Dollars (U.S. $_________) (the "Purchase Price"). As a
fee for this transaction, Subscriber will withhold four percent (4%) of the
Purchase Price.
(b) Form of Payment. Subscriber shall pay the Purchase Price by
delivering good funds in United States Dollars to the Escrow Agent (as defined
below) for closing by delivery of securities versus payment on November 17, 1998
or at such time as is mutually acceptable to both parties (the "Closing Date").
(c) Conditions to Obligations of Seller. Seller's obligation to
sell the Shares to Subscriber is conditioned upon the following:
(i) The receipt and acceptance by Seller of this Agreement
for the sale of the Shares, as evidenced by the execution of this Agreement by
authorized officers of Subscriber.
(ii) The delivery to the Escrow Agent (as defined below)
by Subscriber of good funds in the amount of the Purchase Price for the Shares.
(iii) The delivery at the closing of a certificate from an
authorized officer or representative of Subscriber certifying that Subscriber's
representations and warranties hereunder are true and correct as of the closing
date.
<PAGE> 2
(iv) The Certificate of Determination, substantially in
the form attached hereto as Exhibit A, shall have been filed with, and accepted
by, the Secretary of State of the State of California.
(d) Conditions to Obligations of Subscriber. Subscriber's
obligation to purchase the Shares from Seller is conditioned upon the following:
(i) The receipt and acceptance by Subscriber of this
Agreement for the purchase of the Shares, as evidenced by the execution of this
Agreement by authorized officers of Seller.
(ii) The delivery to the Escrow Agent (as defined below)
by Seller of one or more stock certificates of Seller representing, in
aggregate, the number of Shares purchased by Subscriber and conforming in all
material respects to the requirements of this Agreement.
(iii) The delivery at Closing of a certificate from an
authorized officer of Seller certifying that Seller's representations and
warranties hereunder are true and correct as of the closing date.
(iv) The Certificate of Determination, substantially in
the form attached hereto as Exhibit A, shall have filed with, and accepted by,
the Secretary of State of the State of California.
(e) Deliveries. The Purchase Price for the Shares will be directed
to the Trust Account of Gray Cary Ware & Freidenrich LLP (Account #6470017579),
Attn: Thomas W. Furlong, Esq., as Escrow Agent, Union Bank of California, 400
University Avenue, Palo Alto, CA 94301, ABA #122000496, on or before the Closing
Date. The subscription price for the Shares will, upon deposit into and
collection for the above account, be delivered to Seller by certified check or
by wire transfer, subject to prior delivery to said Escrow Agent of certificates
representing the purchased Shares in accordance with the terms of this
Agreement. Upon execution of said transfer, the Escrow Agent shall deliver the
certificates representing the purchased shares to the Subscriber in accordance
with the Subscriber's instructions.
(f) Indemnification of Escrow Agent. Seller and Subscriber each
agrees, jointly and severally, to indemnify and hold harmless the Escrow Agent
from any and all claims, liabilities, losses, actions, suits, or proceedings, at
law or in equity, that it may incur by reason of its acting as escrow agent as
described herein (including but not limited to expenses reasonably incurred in
investigating, preparing or defending against any litigation, commenced);
provided, however, that the provisions of this paragraph shall not apply in the
event of any claim, liability, loss, action, suit, of proceeding resulting from
the gross negligence or willful misconduct of the Escrow Agent.
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<PAGE> 3
2. Subscriber Representations, Access to Information; Independent
Investigation.
(a) Offshore Transaction. Subscriber represents and warrants to
Seller as follows:
(i) Subscriber is not a "U.S. Person" as defined in Rule
902 of Regulation S and is not organized under the laws of the United States and
was not formed for the purpose of investing in securities not registered under
the 1933 Act.
(ii) At the time the buy-order for the Shares was
originated, Subscriber was outside the United States;
(iii) No offer to purchase the Shares was made by
Subscriber in the United States;
(iv) Subscriber is purchasing the Shares initially for its
own account, for investment purposes only and not with the view towards
distribution or reselling of such Shares or any part thereof.
(v) Subscriber has the full right, power and authority to
enter into this Agreement and to carry out and consummate the transactions
contemplated herein. This Agreement constitutes the legal, valid and binding
obligation of Subscriber.
(vi) At closing no subscription, resale or other transfer
of the Shares has been arranged, or will have been arranged to return the Shares
to the U.S. securities markets or to a U.S. citizen or resident;
(vii) All subsequent offers and sales of the Shares shall
be made (i) in compliance with Regulation S, (ii) pursuant to registration of
the Shares under the 1933 Act or (iii) pursuant to an exemption from
registration. In any case, the Shares will not be resold to or for the account
of a U.S. person (as defined in Regulation S) or within the United States (a)
until after the end of the one (1) year period commencing on the date of closing
of the subscription of the Shares; and (b) without an opinion of counsel
selected by Subscriber, reasonably satisfactory to the Seller, stating that the
Shares are saleable in accordance with Regulation S and the 1933 Act.
(viii) Subscriber understands that (i) the Shares are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws,
(ii) the Shares have not been registered with any United States federal or state
securities commissions and (iii) Seller is relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and
understandings of Subscriber set forth herein in order to determine the
applicability of such exemptions and the suitability of Subscriber to acquire
the Shares.
-3-
<PAGE> 4
(b) No Government Recommendation or Approval. Subscriber
understands that no United States or foreign federal or state agency has passed
on or made any recommendation or endorsement of the Shares.
(c) Current Public Information. Subscriber has received copies of
the Seller's most recent Annual Report on Form 10-K filed with the Securities
and Exchange Commission and all Quarterly Reports on Form 10-Q and all Current
Reports on Form 8-K filed thereafter (collectively the "SEC Filings"), and other
publicly available documents and has carefully reviewed these SEC Filings.
(d) Legal Compliance. Subscriber has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Shares or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the
Shares, (ii) any foreign exchange restrictions applicable to such purchase,
(iii) any governmental or other consents that may need to be obtained and (iv)
the income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale, or transfer of the Shares. Subscriber's
subscription and payment for, and its continued ownership of the Shares, will
not violate any applicable securities or other laws of its jurisdiction.
(e) Due Diligence. Subscriber and its representatives have been
solely responsible for Subscriber's own "due diligence" investigation of Seller
and its management and business, for its own analysis of the merits and risks of
this investment, and for its own analysis of the fairness and desirability of
the terms of the investment. In taking any action or performing any role
relative to the arranging of the proposed investment, Subscriber has acted
solely in its own interest, and neither Subscriber nor any of its
representatives has acted as an agent of Seller.
(f) No Consents or Approvals. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of Subscriber is required in connection with the valid
execution, delivery and performance of this Agreement.
3. Seller Representations.
(a) Rights, Preferences, Privileges and Restrictions. The rights,
preferences, privileges and restrictions of the Shares are substantially as set
forth in the Certificate of Determination attached hereto as Exhibit A or in
this Agreement.
(b) Reporting Company Status. Seller is a "Reporting Company" as
defined by Rule 902 of Regulation S. Seller is in compliance, to the extent
applicable, with all reporting obligations under either Section 12(b), 12(g) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Seller has registered its Common Stock pursuant to Section 12 of the Exchange
Act and the Common Stock trades on the Nasdaq National Market System.
(c) Offshore Transaction. Seller has not offered the securities
that are the subject of this transaction to any person in the United States, any
identifiable groups of U.S. citizens abroad or to any "U.S. Person" as that term
is defined in Regulation S.
-4-
<PAGE> 5
(d) No Directed Selling Efforts. In regard to this transaction,
Seller has not conducted any "directed selling efforts" as that term is defined
in Rule 902 of Regulation S nor has Seller conducted any general solicitation
relating to the offer and sale of the securities that are the subject of this
transaction to persons resident within the United States or elsewhere.
(e) Concerning the Shares. The Shares when issued and delivered
hereunder will be duly and validly authorized and issued, fully paid and
non-assessable and free from preemptive rights.
(f) Subscription Agreement. This Agreement has been duly
authorized, validly executed and delivered on behalf of the Seller and is a
valid and binding agreement in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the enforcement
of creditors' rights generally.
(g) Non-Contravention. The execution and delivery of this
Agreement and the consummation of the issuance of the Shares and the
transactions contemplated by this Agreement do not and will not conflict with or
result in a material breach by Seller of any of the terms or provisions of, or
constituent default under, the articles of incorporation or by-laws of Seller,
or any indenture, mortgage, deed of trust or other material agreement or
instrument to which Seller is a party or by which it or any of its properties or
assets are bound, or any existing applicable law, rule or regulation or any
applicable decree, judgment or order of any court, United States federal or
state regulatory body, administrative agency or other governmental body having
jurisdiction over Seller or any of its properties or assets.
(h) Approvals. Seller is not aware of any authorization, approval
or consent of any governmental body which is legally required for the issuance
and sale of the Shares as contemplated by this Agreement.
4. Restrictive Covenants.
(a) Restrictive Legend. The shares have been issued with the
following legend (the "Legend") appearing thereon:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISTRIBUTED DIRECTLY OR INDIRECTLY, IN THE
UNITED STATES, ITS TERRITORIES, POSSESSIONS, OR AREAS
SUBJECT TO ITS JURISDICTION, OR TO OR FOR THE ACCOUNT OR
BENEFIT OF A "U.S. PERSON" AS THAT TERM IS DEFINED IN RULE
902 OR REGULATION S OF THE ACT, AT ANY TIME PRIOR TO ONE
(1) YEAR AFTER THE ISSUANCE OF THIS CERTIFICATE, EXCEPT
(I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER SUCH ACT, OR (II) IN
COMPLIANCE WITH AN
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<PAGE> 6
EXEMPTION FROM REGISTRATION UNDER SUCH ACT. ANY SALES,
TRANSFERS OR DISTRIBUTIONS OF THE SECURITIES MUST BE MADE
IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S OF THE
ACT."
(b) Transferability. Seller need not register a transfer of any
Shares, and may also instruct its transfer agent not to register the transfer of
the Shares, unless the conditions specified in the foregoing legends and under
Regulation S are satisfied to the extent applicable
5. Registration Rights.
(a) Registration. As soon as practicable after the Effective Time,
and not more than forty-five (45) days thereafter, Seller shall file a
registration statement on Form S-3 (or any successor form) with respect to
shares of Abaxis Common Stock issuable upon conversion of the Shares (such
registration statement and any successor or substitute registration statement is
herein referred to as the "Registration Statement"). Seller shall use its best
efforts to cause such Registration Statement to become effective as promptly as
practicable and to maintain the effectiveness of the Registration Statement (and
to maintain the current status of the prospectus contained therein) until the
earlier of (i) the date one year from the Closing Date or (ii) when all the
Shares have been resold pursuant to an effective Registration Statement. It
shall be a condition precedent to the right of any Subscriber to sell Shares
under the Registration Statement and the obligation of Seller to file the
Registration Statement that such Subscriber shall have furnished to Seller such
information regarding itself, the Shares held by it, the intended method of
distribution of such securities and any additional information as shall be
required to be included in the Registration Statement with respect to such
Shares. Seller shall provide each Subscriber with a copy of each Registration
Statement, each amendment or supplement thereto, and the prospectus contained
therein (as amended and/or supplemented).
6. Miscellaneous.
(a) Entire Agreement. Except as specifically referenced herein,
this Agreement constitutes the entire contract between the parties, and neither
party shall be liable or bound to the other in any manner by any warranties,
representations or covenants except as specifically set forth herein. Any
previous agreement among the parties related to the transactions described
herein is superseded hereby. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
(b) Governing Law. This Agreement shall be governed by, and
interpreted in all respects by, the laws of the State of California as such laws
are applied to agreements between California residents entered into and to be
performed entirely within California.
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<PAGE> 7
(c) Survival. The representations, warranties, covenants and
agreements made herein shall survive the execution of this Agreement and the
closing of the transactions contemplated hereby.
(d) No Brokers. Subscriber (i) represents and warrants to the
Seller that it has retained no finder or broker in connection with the
transactions contemplated by this Agreement and (ii) hereby agrees to indemnify
and to hold Seller harmless of and from any liability for any commission or
compensation in the nature of a finder's fee to any broker or other person of
firm (and the costs and expenses of defending against such liability or asserted
liability) for which it, or any of its employees or representatives, are
responsible.
(e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Offshore
Securities Subscription Agreement to become effective this 17th day of November
1998.
ABAXIS, INC.
By: __________________________________
Donald Stewart
Vice President, Finance and
Chief Financial Officer
- ----------------------
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
<PAGE> 1
EXHIBIT 10.26
MANAGEMENT RIGHTS AGREEMENT
This MANAGEMENT RIGHTS AGREEMENT ("Agreement") is entered into as of
November 17, 1998 by and between Abaxis, Inc., a California corporation (the
"Company"), and NeoMed Innovation ASA, foreign corporation ("Fund").
RECITALS
A. In order to induce Fund to invest in the Company, the Company has agreed to
provide certain observation and information rights to Fund.
NOW THEREFORE, the parties hereto agree that upon Fund's purchase of
shares of 6% Series C Preferred Stock of the Company, Fund will be entitled to
the following contractual management rights, in addition to rights generally
available to shareholders in a publicly traded company:
(1) The Company shall invite a representative of Fund (the "Representative") to
attend all meetings of its Board of Directors in a nonvoting observer capacity
and, in this respect, shall give the Representative timely copies of all
notices, minutes, consents, and other material that it provides to its
directors. The Representative may participate in discussions of matters brought
to the Board of Directors.
Fund agrees, and will cause the Representative to agree in writing:
(i) to hold in confidence and trust and not use or
disclose any confidential information provided to or learned by it in connection
with its rights under this Agreement;
(ii) that the Representative may be excluded from access to
any material or meeting or portion thereof if the
Company believes that such exclusion is reasonably necessary to preserve the
attorney-client privilege, to protect confidential information, or other similar
reasons;
(iii) to be bound by, and to adhere to, the Company's
"Insider Trading Policy," a current copy of which has
previously been provided to Fund;
(iv) that the following legend will be placed on all
shares of the Company's stock held by it, whether currently held or later
acquired: THE REGISTERED HOLDER OF THESE SECURITIES MAY BE DEEMED TO BE AN
AFFILIATE OF THE ISSUER AS DEFINED UNDER RULE 144 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ACCORDINGLY, ANY SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION MUST BE MADE IN COMPLIANCE WITH CERTAIN OF THE
REQUIREMENTS OF RULE 144; and
<PAGE> 2
(v) to be subject to stop-transfer orders if Fund should
attempt to trade any stock held by it in violation of the Company's "Insider
Trading Policy."
The rights described herein shall terminate and be of no further
force or effect upon the earlier of (i) consummation of a merger or
reorganization of the Company that is made for independent business reasons
unrelated to extinguishing the rights granted hereunder or (ii) the Fund holds
fewer than ten percent (10%) of the shares of the Company's 6% Series C
Convertible Preferred Stock originally purchased from the Company or shares of
Common Stock issued or issuable upon conversion of such shares of Series C
Preferred Stock (as adjusted for stock dividends, stock splits, reorganizations
and the like). The confidentiality provisions hereof will survive any such
termination. Fund shall be responsible for any breach of the obligations of
Representative pursuant to this Agreement.
[Remainder of page intentionally left blank]
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<PAGE> 3
IN WITNESS WHEREOF the parties hereto have hereby executed this
Management Rights Agreement as of the date first above written.
Abaxis, Inc.
a California corporation
By: /s/ Donald Stewart
--------------------------------------
Name: Donald Stewart
Title: Chief Financial Officer and Vice
President, Finance
NeoMed Innovation ASA
By: /s/ Erik Amble
--------------------------------------
Name: Erik Amble
Title:
--------------------------------
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<PAGE> 1
EXHIBIT 99.1
[ABAXIS LETTERHEAD]
Contact: Donald J. Stewart Don Kundinger
Chief Financial Officer Jackson Hole Advisors
ABAXIS, Inc. 307-886-3881
408-745-6851
FOR IMMEDIATE RELEASE
ABAXIS COMPLETES $4 MILLION PRIVATE FINANCING
Sunnyvale, California - November 18, 1998 -- ABAXIS, Inc. (NASDAQ: ABAX), a
medical products company manufacturing point-of-care blood analysis systems,
today announced it has completed a private financing raising a total of $4
million.
The Company issued convertible preferred stock that may be converted to common
stock at $2.50 per share. The convertible preferred stock has a 6% coupon that
is payable semiannually. The preferred stock will automatically convert into
common stock no later than October 31, 2002. Proceeds from the offering will be
used for capital equipment expenditures and general working capital purposes.
The Company has agreed to file a resale registration statement covering the
underlying common stock in the next 45 days.
Clint Severson, President and Chief Executive Officer of ABAXIS, commented, "We
are pleased that there is a building confidence in Abaxis and recognition in our
operating performance, which enabled us to raise additional capital at a premium
to our current common stock price in this difficult equity market. We are happy
with the support of a current investor who purchased $3 million of the
financing. In addition, we welcome a new investor group who purchased $1 million
of the financing and who has agreed to work with us to expand our visibility in
the capital markets. We plan on using the proceeds from this financing to
continue the manufacturing automation program, increase the capacity of our
rotor manufacturing and to aggressively expand our sales and marketing efforts
in the United States and Europe."
Founded in 1989, ABAXIS develops, manufactures and markets portable blood
analysis systems for use in any patient-care setting to provide clinicians with
rapid blood constituent measurements. The system consists of a compact, 6.9
kilogram, portable analyzer and a series of 8-cm diameter single-use plastic
disks, called reagent discs that contain all the reagents necessary to perform a
fixed menu of tests. The system can be operated with minimal training and
perform multiple tests on whole blood using either venous or fingerstick
samples. The system provides test results in less than 14 minutes with the
precision and accuracy equivalent to a clinical laboratory.
This press release contains forward-looking statements, which are made in
reliance upon the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The future
events described in such statements involve risks and uncertainties, detailed
from time to time in ABAXIS periodic reports filed with the United States
Securities and Exchange Commission.
