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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
"Xxxxxxx Xxxxxxx 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
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(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 "Xxxxxxx
Xxxxxxx 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.
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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/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer and Vice
President, Finance
NeoMed Innovation ASA
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title:
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