-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DJpT4vfuZb7jZLEhyyjb97zEjK95bmjHQjZ9ELbF2gsT4IaoajC5Tnp4ynOxKxX0 doSckJvsFBWQx+v9rp9kjA== 0000891618-98-005142.txt : 19981126 0000891618-98-005142.hdr.sgml : 19981126 ACCESSION NUMBER: 0000891618-98-005142 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19981117 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ABAXIS INC CENTRAL INDEX KEY: 0000881890 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 770213001 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-19720 FILM NUMBER: 98759815 BUSINESS ADDRESS: STREET 1: 1320 CHESAPEAKE TERRACE CITY: SUNNYVALE STATE: CA ZIP: 94089 BUSINESS PHONE: 4087340200 MAIL ADDRESS: STREET 2: 1320 CHESAPEAKE TERRACE CITY: SUNNYVALE STATE: CA ZIP: 94089 8-K 1 FORM 8-K DATED 11/17/98 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 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Exhibits
Exhibit No. Description ----------- ----------- 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.
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 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 4 INDEX TO EXHIBITS
Exhibit No. Description - ----------- ----------- 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.
EX-4.1 2 CERTIFICATE OF DETERMINATION 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 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 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 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 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 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 EX-10.25 3 FORM OF OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT 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. 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. -2- 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- 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- 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 -5- 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. -6- 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. -7- 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: ----------------------------------- EX-10.26 4 MANAGEMENT RIGHTS AGREEMENT 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 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] -2- 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: -------------------------------- -3- EX-99.1 5 PRESS RELEASE 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. -----END PRIVACY-ENHANCED MESSAGE-----