1
EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of this April 1, 1997, (the "Effective Date")
by and between Abaxis, Inc., a California corporation (the "Corporation"), and
Coffin Communications Group, a _________ corporation (the "Purchaser").
WITNESSETH:
WHEREAS, the Corporation desires to issue and the Purchaser desires to
acquire stock of the Corporation as herein described, on the terms and
conditions hereinafter set forth.
WHEREAS, the Purchaser and the Corporation each desire to satisfy any
and all obligations of the Corporation to issue its securities to the Purchaser
pursuant to that certain Letter of Engagement between the Corporation and the
Purchaser dated April 4, 1997 (the "Letter") by issuing shares of the
Corporation's Common Stock to the Purchaser.
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. Number of Shares and Price Per Share. The Purchaser hereby agrees to
purchase from the Corporation and the Corporation agrees to issue to the
Purchaser Five Thousand Six Hundred Forty Seven (5,647) shares of the
Corporation's Common Stock (the "Stock") in exchange for entering into, and
services provided to date under, the Letter. Purchaser acknowledges that, upon
issuance of the Stock by the Corporation and delivery of such Stock to the
Purchaser, any and all non-cash compensation due to the Purchaser by the
Corporation under the Letter shall be satisfied in full.
2. Unvested Share Repurchase Option. In the event the engagement
described in the Letter is terminated for any reason or no reason, with or
without cause, or if the Purchaser or the Purchaser's legal representative
attempts to sell, exchange, transfer, pledge or otherwise dispose of any shares
purchased pursuant to this Agreement which have not vested in the Founder
pursuant to Section 2(a) below (the "Unvested Shares"), the Corporation shall
have the right to reacquire the Unvested Shares under the terms and subject to
the conditions set forth in this Section 2 (the "Unvested Share Repurchase
Option").
(a) Vesting of Shares. The term "Initial Vesting Date" shall mean
April 1, 1997. As of the Initial Vesting Date, no shares of Stock will be vested
in the Purchaser. The Stock will vest in the Purchaser and become "Vested
Shares" on and after the Initial Vesting Date in accordance with the following
schedule:
1
2
Date Portion Vested
---- --------------
On the Initial Vesting Date zero (0) shares of Stock
(April 1, 1997)
For each full month from the Initial 8.3334% of the Stock
Vesting Date the engagement described in for each such full mo. of
the Letter is in effect and notice of its engagement
termination has not been delivered by
either party
Provided that the aggregate percentage of Stock constituting Vested Shares may
not exceed one hundred percent (100.0%), and that such numbers shall be adjusted
appropriately to reflect any stock splits, stock dividends, recombinations,
recapitalizations or the like by the Corporation.
(b) Exercise of Unvested Share Repurchase Option. If the
engagement described in the Letter is terminated for any reason or for no
reason, or if the Purchaser or the Purchaser's legal representative attempts to
dispose of any Unvested Shares other than as allowed in this Agreement, with or
without cause, the Corporation may exercise the Unvested Share Repurchase Option
by written notice to the Purchaser or the Purchaser's legal representative
within sixty (60) days after such termination or after the Corporation has
received notice of the attempted disposition.
(c) Payment for Shares and Return of Shares. Payment for the
repurchased shares by the Corporation to the Purchaser or the Purchaser's legal
representative shall be made in cash within thirty (30) days after the date of
the mailing of the written notice of exercise of the Unvested Share Repurchase
Option. The purchase price per share for the shares being repurchased by the
Corporation shall be an amount equal to $0.001 per share. Within three (3)
business days after payment by the Corporation, the Purchaser shall deliver the
shares which the Corporation has repurchased to the Corporation and shall
deliver the payment received from the Corporation to the Purchaser.
(d) Assignment of Unvested Share Repurchase Option. In the event
the Corporation is unable to exercise the Unvested Share Repurchase Option
pursuant to the provisions of Section 500 et seq. of the California Corporations
Code, or the corresponding provisions of other applicable law, the Corporation
shall have the right to assign the Unvested Share Repurchase Option to one or
more persons as may be selected by the Corporation.
3. Additional Salability Restriction. The Purchaser understands that, in
its capacity as an investment relations firm for the Company, it may have
non-public material information regarding the Company. Consequently, the
Purchaser agrees that, during "blackout periods" according to the Company's
xxxxxxx xxxxxxx policies then in effect, Purchaser shall not pledge, sell, offer
to sell, contract to sell, grant any option to purchase, make any short sale or
otherwise dispose of any shares of Common Stock of the Company, or any options
or warrants
2
3
to purchase any shares of Common Stock of the Company, or any securities
convertible into or exchangeable for shares of Common Stock of the Company,
whether now owned or hereinafter acquired, owned directly by the undersigned or
with respect to which the undersigned has beneficial ownership within the rules
and regulations of the SEC, without the prior written consent of the Company.
4. Transfers in Violation of Agreement. The Corporation shall not be
required (i) to transfer on its books any shares of Stock of the Corporation
which shall have been sold or transferred in violation of any of the provisions
set forth in this Agreement or (ii) to treat as owner of such shares or to
accord the right to vote as such owner or to pay dividends to any transferee to
whom such shares shall have been so transferred.
5. Warranties and Representations. In connection with the proposed
purchase of the Stock, the Purchaser hereby agrees, represents and warrants as
follows:
(a) The Purchaser is purchasing the Stock solely for his own
account for investment and not with a view to, or for resale in connection with,
any distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "Act"). The Purchaser further represents that he does not have any
present intention of selling, offering to sell or otherwise disposing of or
distributing the Stock or any portion thereof; and that the entire legal and
beneficial interest of the Stock he or is purchasing is being purchased for, and
will be held for the account of, the Purchaser only and neither in whole nor in
part for any other person.
(b) The Purchaser is aware of the Corporation's business affairs
and financial condition and has acquired sufficient information about the
Corporation to reach an informed and knowledgeable decision to acquire the
Stock. The Purchaser further represents and warrants that he has discussed the
Corporation and its plans, operations and financial condition with its officers,
has received all such information as he deems necessary and appropriate to
enable him to evaluate the financial risk inherent in making an investment in
the Stock and has received satisfactory and complete information concerning the
business and financial condition of the Corporation in response to all inquiries
in respect thereof.
(c) Such Purchaser (i) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of such Purchaser's prospective investment in the Company, (ii) has the
ability to bear the economic risks of such Purchaser's prospective investment in
the Company, (iii) has been furnished with and has had access to such
information as such Purchaser has considered necessary to make a determination
as to the purchase of the Securities together with such additional information
as is necessary to verify the accuracy of the information supplied, (iv) has had
all questions which have been asked by such Purchaser satisfactorily answered by
the Company, (v) has not been offered the Securities by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media and
(vi) has a pre-existing personal or business with the Company or with any of the
Company's officers or directors.
3
4
(d) The Purchaser realizes that his purchase of the Stock will be
a highly speculative investment, and he is able, without impairing his financial
condition, to hold the Stock for an indefinite period of time and to suffer a
complete loss on his investment.
(e) The Corporation has disclosed to the Purchaser that:
(i) The sale of the Stock has not been registered under
the Act, and the Stock must be held indefinitely unless a transfer of it is
subsequently registered under the Act or an exemption from such registration is
available, and that the Corporation is under no obligation to register the
Stock; and
(ii) The Corporation will make a notation in its records
of the aforementioned restrictions on transfer and legends.
(f) The Purchaser is aware of the provisions of Rule 144,
promulgated under the Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or an affiliate of such issuer), in a non-public offering subject to
the satisfaction of certain conditions, including among other things: the resale
occurring not less than one year from the date the Purchaser has purchased and
paid for the Stock; the availability of certain public information concerning
the Corporation; the sale being through a broker in an unsolicited "broker's
transaction" or in a transaction directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934); and that any sale of the
Stock may be made by him only in limited amounts during any three-month period
not exceeding specified limitations. The Purchaser further represents that he
understands that at the time he wishes to sell the Stock there may be no public
market upon which to make such a sale, and that, even if such a public market
then exists, the Corporation may not be satisfying the current public
information requirements of Rule 144, and that, in such event, he would be
precluded from selling the Stock under Rule 144 even if the two-year minimum
holding period had been satisfied. The Purchaser represents that he understands
that in the event all of the requirements of Rule 144 are not satisfied,
registration under the Act or compliance with an exemption from registration
will be required; and that, notwithstanding the fact that Rule 144 is not
exclusive, the staff of the SEC has expressed its opinion that persons proposing
to sell private placement securities other than in a registered offering and
otherwise than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
(g) Without in any way limiting the Purchaser's representations
and warranties set forth above, the Purchaser further agrees that he shall in no
event make any disposition of all or any portion of the Stock which he is
purchasing unless and until:
(i) There is then in effect a Registration Statement
under the Act covering such proposed disposition and such disposition is made in
accordance with said
4
5
Registration Statement; or
(ii) The Purchaser shall have (A) notified the
Corporation of the proposed disposition and furnished the Corporation with a
detailed statement of the circumstances surrounding the proposed disposition,
and (B) furnished the Corporation with an opinion of his own counsel to the
effect that such disposition will not require registration of such shares under
the Act, and such opinion of his counsel shall have been concurred in by counsel
for the Corporation and the Corporation shall have advised the Purchaser of such
concurrence.
6. Legends. All certificates representing any shares of Stock subject to
the provisions of this Agreement shall have endorsed thereon the following
legends:
(a) "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE CORPORATION RECEIVES AN OPINION
OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE
CORPORATION, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT";
(b) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF REPURCHASE IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET FORTH IN AN
AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR ITS PREDECESSOR
IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS
CORPORATION"; and
(c) Any legend required to be placed thereon by the California
Commissioner of Corporations.
7. Registration Rights.
(a) Definitions. As used in this Section 7, the following terms
shall have the following respective meanings:
(1) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance
5
6
with the Act, and the declaration or ordering of the effectiveness of such
registration statement.
(2) The term "Registrable Securities" means (A) the
Stock, (B) common stock issued in lieu of the Stock in any reorganization which
has not been sold to the public or (C) common stock issued in respect of the
Stock as a result of a stock split, stock dividend, recapitalization or the
like, which (i) have not been sold to the public and (ii) which are not subject
to the Unvested Share Repurchase Option described in Section 2 hereof on the
date the Company registers its securities.
(3) The term "Holder" means the person to whom
Registrable Securities were originally issued or qualifying transferees under
subsection 7(g) hereof who hold Registrable Securities.
(4) The term "SEC" means the Securities and Exchange
Commission.
(b) Corporation Registration.
(1) Participation in Corporation Registration. If at any
time or from time to time, the Corporation shall determine to register any of
its securities, for its own account or the account of any of its shareholders
(other than a registration relating solely to employee stock option or purchase
plans, or a registration on SEC Form S-4 relating solely to an SEC Rule 145
transaction, or a registration on any form other than SEC Forms X-0, X-0 or S-3,
or their successor forms, which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities), the Corporation will: (A) promptly
give to the Holder written notice thereof and (B) include in such registration
(and any related qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within ten (10) days after receipt of such
written notice from the Corporation, by the Holder, except as set forth in
subsection 6(b)(2) below.
(2) Underwriting. If the registration of which the
Corporation gives notice is for a registered public offering involving an
underwriting, the Corporation shall so advise the Holders as a part of the
written notice given pursuant to subsection 7(b)(1). In such event the right of
the Holder to registration pursuant to subsection 7(b) shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. A Holder proposing to distribute their securities through such
underwriting shall (together with the Corporation and any other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Corporation. Notwithstanding any other
provision of this subsection 6(b), the underwriter may limit the number of
Registrable Securities to be included in the registration and underwriting, or
may exclude Registrable Securities entirely from such registration and
underwriting. The Corporation shall so advise the Holder of Registrable
6
7
Securities which would otherwise be registered and underwritten pursuant hereto,
the number of shares of Registrable Securities that may be included in the
registration and underwriting. If any Holder disapproves of the terms of any
such underwriting, he may elect to withdraw therefrom by written notice to the
Corporation and the underwriter. Any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(c) Expenses of Registration. All expenses incurred in connection
with any registration, qualification or compliance pursuant to this Section 7,
including without limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Corporation and
expenses of any special audits incidental to or required by such registration,
shall be borne by the Corporation except as follows:
(i) The Corporation shall not be required to pay fees or
disbursements of legal counsel of the Holder.
(ii) The Corporation shall not be required to pay
underwriters' fees, discounts or commissions relating to Registrable Securities.
(d) Registration Procedures. In the case of each registration,
qualification or compliance effected by the Corporation pursuant to this
Agreement, the Corporation will keep the Holder participating therein advised in
writing as to the initiation of each registration, qualification and compliance
and as to the completion thereof. At its expense the Corporation will:
(i) Keep such registration, qualification or compliance
pursuant to this Section 6 effective for a period of one hundred eighty (180)
days or until the Holder or Holders have completed the distribution described in
the registration statement relating thereto, whichever first occurs; and
(ii) Furnish such number of prospectuses and other
documents incident thereto as a Holder from time to time may reasonably request.
(e) Indemnification.
(1) The Corporation will indemnify the Holder of
Registrable Securities, each of its officers, directors and partners, and each
person controlling such Holder, with respect to which such registration,
qualification or compliance has been effected pursuant to this Section 7, and
each underwriter, if any, and each person who controls any underwriter of the
Registrable Securities held by or issuable to such Holder, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated
7
8
therein or necessary to make the statements therein not misleading, or
any violation by the Corporation of any rule or regulation promulgated under the
Act or any state securities law applicable to the Corporation and relating to
action or inaction required of the Corporation in connection with any such
registration, qualification or compliance, and will reimburse each such Holder,
each of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
for any reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action, provided that the Corporation will not be liable in any such case to the
extent that any such claim, loss, damage or liability arises out of or is based
on any untrue statement or omission based upon written information furnished to
the Corporation by an instrument duly executed by such Holder or underwriter
specifically for use therein.
(2) The Holder will, if Registrable Securities held by
or issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Corporation, each of its directors and officers, each underwriter, if any, of
the Corporation's securities covered by such a registration statement, each
person who controls the Corporation within the meaning of the Act, and each
other such Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Corporation, such Holder, such directors,
officers, partners, persons or underwriters for any reasonable legal or any
other expenses incurred in connection with investigating, defending or settling
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Corporation by an
instrument duly executed by such Holder specifically for use therein; provided,
however, the total amount for which the Holder shall be liable under this
subsection 7(e)(2) shall not in any event exceed the aggregate proceeds received
by such Holder from the sale of Registrable Securities held by such Holder in
such registration.
(3) Each party entitled to indemnification under this
subsection 7(e) (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not
8
9
relieve the Indemnifying Party of its obligations hereunder, unless such failure
resulted in actual detriment to the Indemnifying Party. No Indemnifying Party,
in the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(f) Information by Holder. The Holder of Registrable Securities
included in any registration shall promptly furnish to the Corporation such
information regarding such Holder and the distribution proposed by such Holder
as the Corporation may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to herein.
(g) Transfer of Registration Rights. A Holder's rights to cause
the Corporation to register their securities and keep information available,
granted to them by the Corporation under this Section 7, may be assigned to a
transferee or assignee who also receives all shares of Registrable Securities
then held by the Holder; provided that the Corporation is given written notice
by such Holder at the time of or within a reasonable time after said transfer,
stating the name and address of said transferee or assignee and identifying the
securities with respect to which such registration rights are being assigned,
and such transferee has agreed to comply with the obligations of this Section 7.
(h) Termination of Registration Rights. The registration rights
contained in this Section 7 shall terminate as to a Holder, when all Registrable
Securities held by such Holder may be sold pursuant to SEC Rule 144 within a
three month period.
8. General.
(a) Notice. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon receipt if delivered
personally or by facsimile at the number hereinafter shown below his signature,
or upon deposit in the United States Post Office, by registered or certified
mail with postage and fees prepaid, addressed to the other party hereto at the
address hereinafter shown below his signature. Either party may designate
another address or facsimile number by ten (10) days' advance written notice to
the other party hereto.
(b) Successors and Assigns. This Agreement shall inure to the
benefit of the successors and assigns of the Corporation and, subject to the
restrictions on transfer herein set forth, be binding upon the Purchaser, his
heirs, executors, administrators, successors and assigns. This Agreement shall
be fully assignable by the Corporation.
(c) Entire Agreement; Amendments. This Agreement shall be
construed under the laws of the State of California (as it applies to agreements
between California residents, entered into and to be performed entirely within
California), and constitutes the entire agreement of the parties with respect to
the subject matter hereof superseding all prior
9
10
written or oral agreements, and no amendment or addition hereto shall be deemed
effective unless agreed to in writing by the parties hereto.
(d) Separability. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way and shall be construed in
accordance with the purposes and tenor and effect of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"PURCHASER" "CORPORATION"
COFFIN COMMUNICATIONS ABAXIS, INC.
GROUP
By___________________________________ By:___________________________________
Title:_______________________________ Title:________________________________
Address:_____________________________ Address: 0000 Xxxxxxxxxx Xxxxxxx
_____________________________ Xxxxxxxxx, XX 00000
_____________________________
Facsimile:___________________________ Facsimile: (000) 000-0000
10
