EXHIBIT 4.3
ABAXIS, Inc.
10,000 Shares of Series E Cumulative Convertible Preferred Stock,
and Related Warrants
SECURITIES PURCHASE AGREEMENT
March 29, 2002
TO EACH OF THE PURCHASERS NAMED ON
THE SIGNATURE PAGES HEREOF
Ladies and Gentlemen:
ABAXIS, Inc., a California corporation (the "Company"), hereby
confirms its agreement with you (the "Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to each Purchaser (a) the
number of shares of its Series E Cumulative Convertible Preferred Stock (the
"Series E Preferred Stock") set forth on the signature page of such Purchaser
hereto, and (b) a warrant, substantially in the form attached hereto as Exhibit
A (the "Warrants"), to acquire 50 shares (the "Warrant Shares") of the Company's
common stock, no par value (the "Common Stock"), for each share of Series E
Preferred Stock purchased. The rights, preferences, privileges and restrictions
of the Series E Preferred Stock are set forth in the Form of Certificate of
Determination attached hereto as Exhibit B (the "Series E Certificate of
Determination"). Each share of Series E Preferred Stock shall be, at the option
of the holder, convertible into shares (the "Conversion Shares") of Common Stock
as provided in the Series E Certificate of Determination.
The shares of Series E Preferred Stock and the Warrants are
sometimes herein collectively referred to as the "Securities".
The Securities will be offered and sold to the Purchasers without
such offers and sales being registered under the Securities Act of 1933, as
amended (together with the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated thereunder, the "Securities Act"), in
reliance on exemptions therefrom.
In connection with the sale of the Securities, (i) the Company
has made available its periodic reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 since January 1, 2001, and
all amendments thereto, and (ii) the Company has prepared an Executive Summary
dated January 25, 2002 (the "Executive Summary") and a slide presentation dated
January 25, 2002 (the "Slide Presentation") setting forth certain information
with respect to the Company and the offering of the Securities. These reports,
filings and amendments, along with the Executive Summary and Slide Presentation,
are collectively referred to as the "Disclosure Documents". All references in
this Agreement to financial statements and schedules and other information which
is "contained," "included" or "stated" in the Disclosure Documents (or other
references of like import) shall be deemed to mean and include all such fi-
nancial statements and schedules and other information which is incorporated by
reference in the Disclosure Documents.
The Purchasers and their direct and indirect transferees of the
Securities will be entitled to the benefits of the Registration Rights Agreement
to be dated as of March 29, 2002 among the parties hereto (the "Registration
Rights Agreement") pursuant to which the Company has agreed, among other things,
to file a shelf registration statement (the "Shelf Registration Statement")
pursuant to Rule 415 under the Securities Act of 1933 relating to the resale of
the Conversion Shares and the Warrant Shares by holders thereof.
This Agreement, the Registration Rights Agreement, the Warrants,
and the Engagement Letter (the "Engagement Letter") dated as of March 29, 2002
with Xxxx Capital Partners, LLC (the "Placement Agent") are herein collectively
referred to as the "Basic Documents".
2. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each Purchaser and the Placement
Agent that:
(a) The Disclosure Documents as of their respective dates
did not, and (after giving effect to any updated disclosures therein) as of the
Closing Date as defined in Section 3 below will not, contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The Disclosure Documents (other than the Executive Summary
and Slide Presentation) and the documents incorporated or deemed to be
incorporated by reference therein, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with the
requirements of the Securities Act of 1933, as amended, and/or the Securities
Exchange Act of 1934, as amended, as the case may be (together with the rules
and regulations of the Commission promulgated thereunder, the "Securities
Acts"), as applicable.
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
California, with the requisite corporate power and authority to own its
properties and conduct its business as now conducted as described in the
Disclosure Documents and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
business, condition (financial or other), properties, prospects or results of
operations of the Company (any such event, a "Material Adverse Effect"); as of
the Closing Date, the Company will have the authorized, issued and outstanding
capitalization set forth in the Disclosure Documents (subject to the issuance of
shares pursuant to options outstanding under the Company's stock option plans or
outstanding warrants or other rights to acquire shares described in the
Disclosure Documents); the Company does not have any subsidiaries or own
directly or indirectly any of the capital stock or other equity or long-term
debt securities of or have any equity interest in any other person; all of the
outstanding shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and were not issued in
violation of any preemptive or similar rights and are owned free and clear of
all liens, encumbrances, equities, and restrictions
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on transferability (other than those imposed by the Securities Act and the state
securities or "Blue Sky" laws) or voting; except as set forth in the Disclosure
Documents, no options, warrants or other rights to purchase from the Company,
agreements or other obligations of the Company to issue or other rights to
convert any obligation into, or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding; and except as
set forth in the Disclosure Documents, there is no agreement, understanding or
arrangement among the Company and each of its respective stockholders or any
other person relating to the ownership or disposition of any capital stock of
the Company or the election of directors of the Company or the governance of the
Company's affairs, and, if any, such agreements, understandings and arrangements
will not be breached or violated as a result of the execution and delivery of,
or the consummation of the transactions contemplated by, the Basic Documents.
(c) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under the Basic
Documents. Each of the Basic Documents has been duly and validly authorized by
the Company and, when executed and delivered by the Company, will constitute a
valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms except as (i) the enforcement thereof may
be limited by (A) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally or (B) general principles of equity and
the discretion of the court before which any proceeding therefore may be brought
(regardless of whether such enforcement is considered in a proceeding at law or
in equity) (collectively, the "Enforceability Exceptions"), and (ii) any rights
to indemnity, or contribution under the Registration Rights Agreement may be
limited by federal and state securities laws and public policy considerations.
(d) Subject to the filing of the Series E Certificate of
Determination with the California Secretary of State, the shares of Series E
Preferred Stock to be issued pursuant to this Agreement have been duly
authorized and, when issued upon payment in accordance with this Agreement, will
have been validly issued, fully paid and nonassessable. The Conversion Shares
have been duly authorized and validly reserved for issuance, and when issued
upon conversion of the Series E Preferred Stock, will have been validly issued,
fully paid and nonassessable. The Warrant Shares have been duly authorized and
validly reserved for issuance, and when issued upon exercise of the Warrants in
accordance with the terms thereof, will have been validly issued, fully paid and
nonassessable. The capital stock of the Company, including the Series E
Preferred Stock and the Common Stock, conforms to the description thereof
contained in the Disclosure Documents. The stockholders of the Company have no
preemptive or similar rights with respect to the Common Stock.
(e) No consent, approval, authorization, license,
qualification, exemption or order of any court or governmental agency or body or
third party is required for the performance of the Basic Documents by the
Company or for the consummation by the Company of any of the transactions
contemplated thereby, or the application of the proceeds of the issuance of the
Securities as described in this Agreement, except for such consents, approvals,
authorizations, licenses, qualifications, exemptions or orders (i) as have been
obtained on or prior to the Closing Date, (ii) as are not required to be
obtained on or prior to the Closing Date that will be obtained when required, or
(iii) the failure to obtain which would not, individually or in the ag-
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gregate, have a Material Adverse Effect; all such consents, approvals,
authorizations, licenses, qualifications, exemptions and orders set forth in the
Disclosure Documents which are required to be obtained by the Closing Date will
be in full force and effect as of the Closing Date and not the subject of any
pending or, to the best knowledge of the Company, threatened attack by appeal or
direct proceeding or otherwise.
(f) The Company is not (i) in violation of its articles of
incorporation or bylaws (or similar organizational document), (ii) in breach or
violation of any statute, judgment, decree, order, rule or regulation applicable
to it or any of its properties or assets, which breach or violation would,
individually or in the aggregate, have a Material Adverse Effect, or (iii) in
default (nor has any event occurred which with notice or passage of time, or
both, would constitute a default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate or agreement or instrument to which it
is a party or to which it is subject, which default would, individually or in
the aggregate, have a Material Adverse Effect.
(g) The execution, delivery and performance by the Company
of the Basic Documents and the consummation by the Company of the transactions
contemplated thereby and the fulfillment of the terms thereof will not (a)
violate, conflict with or constitute or result in a breach of or a default under
(or an event that, with notice or lapse of time, or both, would constitute a
breach of or a default under) any of (i) the terms or provisions of any
contract, indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate or agreement or instrument to
which the Company is a party or to which any of their respective properties or
assets are subject, (ii) the articles of incorporation or bylaws of the Company
(or similar organizational document) or (iii) any statute, judgment, decree,
order, rule or regulation of any court or governmental agency or other body
applicable to the Company or any of its respective properties or assets or (b)
result in the imposition of any lien upon or with respect to any of the
properties or assets now owned or hereafter acquired by the Company, which
violation, conflict, breach, default or lien would, individually or in the
aggregate, have a Material Adverse Effect.
(h) The audited consolidated financial statements included
in the Disclosure Documents present fairly the consolidated financial position,
results of operations, cash flows and changes in stockholders' equity of the
entities, at the dates and for the periods to which they relate and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis; the interim unaudited consolidated financial statements
included in the Disclosure Documents present fairly the consolidated financial
position, results of operations and cash flows of the entities, at the dates and
for the periods to which they relate subject to year-end audit adjustments and
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis with the audited consolidated financial statements
included therein; the selected financial and statistical data included in the
Disclosure Documents present fairly the information shown therein and have been
prepared and compiled on a basis consistent with the audited financial
statements included therein, except as otherwise stated therein; and Deloitte &
Touche LLP, which has examined certain of such financial statements as
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set forth in its report included in the Disclosure Documents, is an independent
public accounting firm as required by the Securities Act for an offering
registered thereunder.
(i) Except as described in the Disclosure Documents, there
is not pending or, to the best knowledge of the Company, threatened any action,
suit, proceeding, inquiry or investigation, governmental or otherwise, to which
the Company is a party, or to which their respective properties or assets are
subject, before or brought by any court, arbitrator or governmental agency or
body, that, if determined adversely to the Company, would, individually or in
the aggregate, have a Material Adverse Effect or that seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or sale of the
Securities to be sold hereunder or the application of the proceeds therefrom or
the other transactions described in the Basic Documents.
(j) The Company does not have, and, after giving effect to
the issuance and sale of the Securities hereunder, will not have, any liability
for any prohibited transaction (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code")), accumulated funding
deficiency (as defined in Section 302 of ERISA) or any complete or partial
withdrawal from a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA), with respect to any plan (as defined in Section 3(3) of ERISA) as to
which the Company has or could have any direct or indirect, actual or contingent
liability. With respect to such plans, the Company is, and, after giving effect
to the issuance and sale of the Securities hereunder, will be, in compliance in
all material respects with all provisions of the Code and ERISA.
(k) The Company owns or possesses adequate licenses or
other rights to use all patents, trademarks, service marks, trade names,
copyrights and know-how that are necessary to conduct their businesses as
described in the Disclosure Documents. The Company has not received any notice
of infringement of or conflict with (or knows of any such infringement of or
conflict with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how that, if such
assertion of infringement or conflict were sustained, would, individually or in
the aggregate, have a Material Adverse Effect.
(l) The Company possesses all licenses, permits,
certificates, consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals presently required or necessary to own or lease, as the case may
be, and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Disclosure
Documents ("Permits"), except where the failure to obtain such Permits would
not, individually or in the aggregate, have a Material Adverse Effect and except
for ongoing product approval filings in progress with the U.S. Food and Drug
Administration (FDA), such approvals being in the normal course of business and
consistent with the Company's Disclosure Documents and product plans.
(m) The Company has fulfilled and performed all of its
obligations with respect to Permits referred to in Section 2(l) herein and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any
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other material impairment of the rights of the holder of any such Permit; and
the Company has not received any notice of any proceeding relating to revocation
or modification of any such Permit, except as described in the Disclosure
Documents and except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
(n) Subsequent to the respective dates as of which
information is given in the Disclosure Documents and except as described
therein, (i) the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions not
in the ordinary course of business, (ii) the Company has not purchased any of
its outstanding capital stock, or declared, paid or otherwise made any dividend
or distribution of any kind on any of its capital stock or otherwise, (iii)
there has not been any material change in the capital stock or any increase in
the long-term indebtedness of the Company, (iv) there has not occurred any event
or condition, individually or in the aggregate, that has a Material Adverse
Effect and (v) the Company has not sustained any material loss or interference
with respect to their respective businesses or properties from fire, flood,
hurricane, earthquake, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding.
(o) There are no legal or governmental proceedings nor are
there any contracts or other documents required by the Securities Act to be
described in a prospectus that are not described in the Disclosure Documents.
Except as described in the Disclosure Documents, the Company is not in default
under any of the contracts described in the Disclosure Documents, has not
received a notice or claim of any such default, and does not have knowledge of
any breach of such contracts by the other party or parties thereto, except such
defaults or breaches as would not, individually or in the aggregate, have a
Material Adverse Effect.
(p) The Company has good and marketable title to all real
property described in the Disclosure Documents as being owned by it and good and
marketable title to the leasehold estate in the real property described therein
as being leased by it, free and clear of all liens, charges, encumbrances or
restrictions, except, in each case, as described in the Disclosure Documents or
such as would not, individually or in the aggregate, have a Material Adverse
Effect. All leases, contracts and agreements, including those referred to in the
Disclosure Documents, to which the Company is a party or by which it is bound
are valid and enforceable against the Company and, are, to the knowledge of the
Company, valid and enforceable against the other party or parties thereto and
are in full force and effect.
(q) The Company has filed all necessary federal, state and
foreign income and franchise tax returns, except where the failure to so file
such returns would not, individually or in the aggregate, have a Material
Adverse Effect, and has paid all taxes shown as due thereon; and other than tax
deficiencies which the Company is contesting in good faith and for which
adequate reserves have been provided in accordance with generally accepted
accounting principles, there is no tax deficiency that has been asserted against
the Company that would, individually or in the aggregate, have a Material
Adverse Effect.
(r) Except as disclosed in the Disclosure Documents and
except as would not, individually or in the aggregate, have a Material Adverse
Effect, (A) the Company is
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in compliance with all, and is not subject to liability (including, without
limitation, fines or penalties) under any, applicable Environmental Laws, (B)
the Company has made all filings and provided all notices required under any
applicable Environmental Law, and has all permits, authorizations and approvals
required under any applicable Environmental Laws and is in compliance with their
requirements, (C) there is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding, notice
or demand letter or request for information pending or, to the best knowledge of
the Company, threatened against the Company under any Environmental Law, (D) no
lien, charge, encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property owned,
operated, leased or controlled by the Company, (E) the Company is not subject to
any order, decree or agreement requiring, or otherwise obligated or required to
perform any response or corrective action relating to any hazardous material,
(F) the Company has not received notice that it has been identified as a
potentially responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), or any comparable
state law, (G) no property or facility of the Company is (i) listed or proposed
for listing on the National Priorities List under CERCLA or (ii) listed in the
Comprehensive Environmental Response, Compensation and Liability Information
System List promulgated pursuant to CERCLA, or on any comparable list maintained
by any state or local governmental authority and (H) there are no past or
present actions, events, operations or activities which could reasonably be
expected to prevent or interfere with compliance by the Company with any
applicable Environmental Law or to result in liability (including, without
limitation, fines or penalties) under any applicable Environmental Law.
For purposes of this Agreement, the following terms shall have
the following meanings: "Environmental Law" means any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code, policy or rule of
common law and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment binding on the
Company, relating to pollution or protection of the environment, natural
resources or health or safety including, without limitation, any relating to the
release or threatened release of any pollutant, contaminated substance,
material, waste, chemical or contaminant subject to regulation thereunder.
(s) The Company is not, and immediately after the Closing
Date will not be, required to register as an "investment company" or a company
"controlled by" an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(t) Neither the Company nor any of its directors,
officers, employees, agents or controlling persons has taken, directly or
indirectly, any action designed, or that might reasonably be expected, to cause
or result, under the Securities Acts or otherwise, in, or that has constituted,
stabilization or manipulation of the price of the Common Stock.
(u) Neither the Company nor any of its Affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act) has directly,
or through any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of any "security" (as defined in the Securities
Act) which is or could be integrated with the sale of the Securi-
7
ties hereunder in a manner that would require the registration under the
Securities Act of the Securities or (ii) engaged in any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) in connection with the offering of the Securities or
in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act. Assuming the accuracy of the representations and warranties
of the Purchasers in Section 6 hereof, it is not necessary in connection with
the offer, sale and delivery of the Securities to the Purchasers in the manner
contemplated by this Agreement to register any of the Securities under the
Securities Act.
(v) Except as set forth in the Disclosure Documents, there
is no strike, labor dispute, slowdown or work stoppage with the employees of the
Company which is pending or, to the best knowledge of the Company, threatened.
(w) The Company carries insurance (including
self-insurance) in such amounts and covering such risks as in its reasonable
determination is adequate for the conduct of its business and the value of its
properties.
(x) The Company (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
(y) Except for certain holders of warrants to purchase the
Company's Common Stock who collectively have the right to purchase 227,500
shares of Common Stock, no holder of securities of the Company will be entitled
to have such securities registered under the Shelf Registration Statement.
(z) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes.
(aa) Except the fee payable to the Placement Agent, the
Company does not know of any claims for services, either in the nature of a
finder's fee or financial advisory fee, with respect to the offering of the
Securities and the transactions contemplated by the Basic Documents.
(bb) The Common Stock is listed on the Nasdaq National
Market. The Company currently is not in violation of, and the consummation of
the transactions contemplated by the Basic Documents, will not violate, any rule
of the National Association of Securities Dealers.
(cc) The Company is eligible to use Form S-3 for the
resale of the Conversion Shares and the Warrant Shares by Purchasers or their
transferees. Any certificate signed by any officer of the Company and delivered
pursuant to this Agreement shall be deemed a joint
8
and several representation and warranty by the Company to each Purchaser as to
the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Purchasers, and each Purchaser acting severally and not
jointly agrees to purchase from the Company, the number of shares of Series E
Preferred Stock set forth on such Purchaser's signature page hereto, at
$1,000.00 per share. In connection with the purchase and of Series E Preferred
Stock, each Purchaser will receive, for no additional consideration, a Warrant
to purchase 50 shares of Common Stock for each share of Series E Preferred Stock
purchased.
One or more certificates in definitive form for the shares of
Series E Preferred Stock that the Purchasers have agreed to purchase hereunder,
and in such denomination or denominations and registered in such name or names
as each Purchaser requests upon notice to the Company at least 48 hours prior to
the Closing Date, as well as the related Warrants, shall be delivered by or on
behalf of the Company, against payment by or on behalf of the Purchasers, of the
purchase price therefor by wire transfer of immediately available funds to the
account of the Company previously designated by it in writing. Such delivery of
and payment for the Securities shall be made at the offices of Xxxx Xxxx Xxxx
and Freidenrich LLP, 000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, on March
29, 2002, or at such other dates as the Purchasers and the Company may agree
upon, such times and dates of delivery against payment being herein referred to
as the "Closing Date."
4. Certain Covenants. The Company covenants and agrees with each
Purchaser and the Placement Agent that:
(a) None of the Company or any of its Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any "security" (as defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require the registration
under the Securities Act of the Securities.
(b) The Company will apply the net proceeds from the sale
of the Securities for general corporate purposes.
(c) Except in connection with the filing of the Shelf
Registration Statement, the Company will not engage in any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) in connection with the offering of the Securities or
in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.
(d) The Company will not become, at any time prior to the
expiration of three years after the Closing Date, an open-end investment
company, unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under Section 8 of
the Investment Company Act.
9
(e) The Company will use its best efforts to have the
Conversion Shares and the Warrant Shares listed on the Nasdaq National Market on
or prior to the effective date of the Shelf Registration Statement.
(f) The Company will use its best efforts to do and
perform all things required to be done and performed by it under this Agreement
and the other Basic Documents prior to or after the Closing Date and to satisfy
all conditions precedent on its part to the obligations of the Purchasers to
purchase and accept delivery of the Securities.
5. Representations and Warranties of the Purchasers.
(a) Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company that the Securities to be
acquired by it hereunder (including shares of Common Stock that it may acquire
upon conversion or exercise thereof) are being acquired for its own account for
investment (and/or on behalf of managed accounts who are purchasing solely for
their own accounts for investment) and with no intention of distributing or
reselling such Securities or any part thereof or interest therein in any
transaction which would be in violation of the securities laws of the United
States of America or any State, without prejudice, however, to a Purchaser's
right, subject to the provisions of this Agreement and the Registration Rights
Agreement, at all times to sell or otherwise dispose of all or any part of its
Conversion Shares or Warrant Shares under an effective registration statement
under the Securities Act and in compliance with applicable state securities laws
or under an exemption from such registration, and subject, nevertheless, to the
disposition of a Purchaser's property being at all times within its control. By
executing this Agreement, each Purchaser further represents that such Purchaser
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to any Person with respect to
any of the Securities, the Conversion Shares or the Warrant Shares.
(b) Each Purchaser understands that the Securities,
Conversion Shares and Warrant Shares have not been registered under the
Securities Act and may not be offered, resold, pledged or otherwise transferred
except (a) pursuant to an exemption from registration under the Securities Act
(and, if requested by the Company, based upon an opinion of counsel acceptable
to the Company) or pursuant to an effective registration statement under the
Securities Act and (b) in accordance with all applicable securities laws of the
states of the United States and other jurisdictions.
(c) Each Purchaser agrees to the imprinting, so long as
appropriate, of the following legend on the shares of Series E Preferred Stock,
the Conversion Shares and the Warrant Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ("TRANSFERRED")
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. IN THE ABSENCE OF SUCH REGISTRATION, SUCH SECURITIES MAY NOT
BE TRANSFERRED UNLESS, IF THE COMPANY REQUESTS, THE COMPANY HAS RECEIVED
A WRITTEN OPINION FROM COUNSEL IN FORM
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AND SUBSTANCE SATISFACTORY TO THE COMPANY STATING THAT SUCH TRANSFER IS
BEING MADE IN COMPLIANCE WITH ALL APPLICABLE FEDERAL AND STATE
SECURITIES LAWS.
The legend set forth above may be removed if and when the shares
Series E Preferred Stock, the Conversion Shares or the Warrant Shares, as the
case may be, are disposed of pursuant to an effective registration statement
under the Securities Act or in the opinion of counsel to the Company experienced
in the area of United States Federal securities laws such legends are no longer
required under applicable requirements of the Securities Act. The shares Series
E Preferred Stock, the Conversion Shares and the Warrant Shares shall also bear
any other legends required by applicable Federal or state securities laws, which
legends may be removed when in the opinion of counsel to the Company experienced
in the applicable securities laws, the same are no longer required under the
applicable requirements of such securities laws. The Company agrees that it will
provide each Purchaser, upon request, with a substitute certificate, not bearing
such legend at such time as such legend is no longer applicable. Each Purchaser
agrees that, in connection with any transfer of the Conversion Shares or the
Warrant Shares by it pursuant to an effective registration statement under the
Securities Act, such Purchaser will comply with all prospectus delivery
requirements of the Securities Act. The Company makes no representation,
warranty or agreement as to the availability of any exemption from registration
under the Securities Act with respect to any resale of the shares Series E
Preferred Stock, the Conversion Shares or the Warrant Shares.
(d) Each Purchaser is an institutional investor that is an
accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act.
(e) Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company that it has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in the
Securities, such Purchaser having been represented by counsel, and has so
evaluated the merits and risks of such investment and is able to bear the
economic risk of such investment and, at the present time, is able to afford a
complete loss of such investment.
(f) Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company that (i) the purchase of the
Securities to be purchased by it has been duly and properly authorized and this
Agreement has been duly executed and delivered by it or on its behalf and
constitutes the valid and legally binding obligation of such Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principals of equity; (ii) the purchase of the
Securities to be purchased by it does not conflict with or violate its charter,
by-laws or any law, regulation or court order applicable to it; and (iii) the
purchase of Securities to be purchased by it does not impose any penalty or
other onerous condition on such Purchaser under or pursuant to any applicable
law or governmental regulation.
(g) Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company that neither it nor any of
its directors, officers, employ-
11
ees, agents, or controlling persons has taken, directly or indirectly, any
actions designed, or might reasonably be expected to cause or result, under the
Securities Acts or otherwise, in, or that has constituted, stabilization, or
manipulation of the price of the Common Stock.
(h) Each Purchaser acknowledges receipt of the Disclosure
Documents and further acknowledges that it has been afforded (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment in the Securities;
and (iii) the opportunity to obtain such additional information which the
Company possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy and completeness of the information contained
in the Disclosure Documents.
(i) Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company that it has based its
investment decision solely up the information contained in the Disclosure
Documents and such other information as may have been provided to it by the
Company in response to its inquiries, and has not based its investment decision
on any research or other report regarding the Company prepared by any third
party ("Third Party Reports"). Each Purchaser understands and acknowledges that
(i) the Company does not endorse any Third Party Reports, and (ii) its actual
results may differ materially from those projected in any Third Party Report.
(j) Each Purchaser understands and acknowledges that (i)
any forward-looking information contained in the Disclosure Documents or
supplied to such Purchaser by the Company or its management is subject to risks
and uncertainties, including those risks and uncertainties set forth under "Risk
Factors" in the Company's Annual Report on Form 10-K for the year ended March
31, 2001; and (ii) the Company's actual results may differ materially from those
projected by the Company or its management in such forward-looking information.
(k) Each Purchaser understands and acknowledges that (i)
the Securities are offered and sold without registration under the Securities
Act in a private placement that is exempt from the registration provisions of
the Securities Act and (ii) the availability of such exemption depends in part
on, and that the Company, its counsel and the Placement Agent will rely upon,
the accuracy and truthfulness of the foregoing representations and such
Purchaser hereby consents to such reliance.
(l) Each Purchaser understands and acknowledges that the
Securities offered by the Company, as described in the Disclosure Documents, are
offered on a "best efforts" basis and that the Company reserves the right to
accept purchases of more or less than the number of Securities set forth in the
Disclosure Documents; in the event that less than the number of Securities set
forth in the Disclosure Documents are sold by the Company, the Company's use of
proceeds, operations and financial information as set forth in the Disclosure
Documents could be adversely affected.
12
6. Conditions of the Purchasers' Obligations. The obligation of
each Purchaser to purchase and pay for the Securities is subject to the
following conditions unless waived in writing by the relevant Purchaser:
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
(other than representations and warranties with a Material Adverse Effect
qualifier, which shall be true and correct as written) on and as of the Closing
Date; the Company shall have complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date.
(b) None of the issuance and sale of the Securities
pursuant to this Agreement or any of the transactions contemplated by any of the
other Basic Documents shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued in respect
thereof; and there shall not have been any legal action, order, decree or other
administrative proceeding instituted or, to the Company's knowledge, threatened
against the Company or against any Purchaser relating to the issuance of the
Securities or any Purchaser's activities in connection therewith or any other
transactions contemplated by this Agreement or the other Basic Documents.
(c) The Company shall have filed with the California
Secretary of State the Series E Certificate of Determination in the form
attached hereto as Exhibit B containing the resolutions of the Board of
Directors of the Company creating the Series E Preferred Stock and setting forth
the terms and conditions of the Series E Preferred Stock. A copy of each of the
articles of incorporation of the Company and the Series E Certificate of
Determination, certified by the State of California, shall have been delivered
to the Purchasers as promptly as practicable after the Closing Date.
(d) The Purchasers and Placement Agent shall have received
certificates, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company, to the effect of paragraphs 5(a)
and (b).
(e) On or before the Closing Date, the Purchasers shall
have received the Registration Rights Agreement executed by the Company and such
agreement shall be in full force and effect at all times from and after the
Closing Date, subject to the Enforceability Exceptions.
(f) The Purchasers and Placement Agent shall have received
an opinion of Xxxx Xxxx Xxxx & Freidenrich LLP, counsel to the Company, with
respect to the authorization of the shares of the Series E Preferred Stock, the
Conversion Shares and the Warrant Shares, and other customary matters in the
form attached hereto as Exhibit C.
7. Conditions of the Company's Obligations. The obligation of the
Company to issue, and accept funds for, the Securities is subject to the
following conditions unless waived in writing by the Company:
13
(a) The representations and warranties of the Purchasers
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date; the Purchasers shall have complied in all
material respects with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to the Closing Date.
(b) None of the issuance and sale of the Securities
pursuant to this Agreement or any of the transactions contemplated by any of the
other Basic Documents shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued in respect
thereof; and there shall not have been any legal action, order, decree or other
administrative proceeding instituted or, to the Company's knowledge, threatened
against the Company or against any Purchaser relating to the issuance of the
Securities or any Purchaser's activities in connection therewith or any other
transactions contemplated by this Agreement or the other Basic Documents.
(c) The Company shall have filed with the California
Secretary of State the Series E Certificate of Determination in the form
attached hereto as Exhibit B containing the resolutions of the Board of
Directors of the Company creating the Series E Preferred Stock and setting forth
the terms and conditions of the Series E Preferred Stock. A copy of each of the
articles of incorporation of the Company and the Series E Certificate of
Determination, certified by the State of California, shall have been delivered
to the Purchasers as promptly as practicable after the Closing Date.
(d) On or before the Closing Date, the Company shall have
received the Registration Rights Agreement executed by the Purchasers and such
agreement shall be in full force and effect at all times from and after the
Closing Date, subject to the Enforceability Exceptions.
(e) The Company will have received executed copies of this
Agreement, the Registration Rights Agreement, and funds from the Purchasers,
which would result in the sale of, in the aggregate, at least Seven Thousand
(7,000) Shares.
8. Survival Clause. The respective representations, warranties,
agreements and covenants of the Company and the Purchasers set forth in this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, or any Purchaser and (ii) delivery of, payment for or disposition of
the Securities, and shall be binding upon and shall inure to the benefit of any
successors, assigns, heirs or personal representatives of the Company and the
Purchasers.
9. Termination.
(a) This Agreement may be terminated in the sole
discretion of the Company by notice to each Purchaser severally and not jointly
if at the Closing Date:
(i) the representations and warranties made by such
Purchaser in Section 6 are not true and correct in all material
respects; or
14
(ii) as to the Company, the sale of the Securities
hereunder (i) is prohibited or enjoined by any applicable law or
governmental regulation or (ii) subjects the Company to any
penalty, or in its reasonable judgment, other onerous condition
under or pursuant to any applicable law or government regulation
that would materially reduce the benefits to the Company of the
sale of the Securities to such Purchaser, so long as such
regulation, law or onerous condition was not in effect in such
form at the date of this Agreement.
(b) This Agreement may be terminated in the sole
discretion of any Purchaser by notice to the Company given in the event that the
Company shall have failed, refused or been unable to satisfy all conditions on
its part to be performed or satisfied hereunder on or prior to the Closing Date
or if after the execution and delivery of this Agreement and prior to the
Closing Date:
(i) trading in securities of the Company or in
securities generally on the Nasdaq National Market shall have
been suspended or minimum or maximum prices shall have been
established on any such exchange;
(ii) a banking moratorium shall have been declared
by New York or United States authorities; or
(iii) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any
foreign power, (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or any
other national or international calamity or emergency, or (C) any
material change in the financial markets of the United States
that, in the case of (A), (B) or (C) above, in the sole judgment
of any Purchaser, makes it impracticable or inadvisable to
proceed with the delivery of the Securities as contemplated by
the Disclosure Documents, as amended as of the date hereof.
10. Notices. All communications hereunder shall be in writing
and, (i) if sent to a Purchaser, shall be hand delivered, mailed by first-class
mail, couriered by next-day air courier or telecopied and confirmed in writing
to their address on their signature page hereof and (ii) if sent to the Company,
shall be hand delivered, mailed by first-class mail, couriered by next-day air
courier or telecopied and confirmed in writing to Abaxis, Inc., 0000 Xxxxxxx
Xxxx, Xxxxx Xxxx, XX 00000, Attention: Xxxxxxx Xxxxxxxx, and with a copy to Xxxx
Xxxx Xxxx & Freidenrich LLP, counsel to the Company, 000 Xxxxxxxx Xxxxxx, Xxxx
Xxxx, XX 00000, attention: Xxxxxx Xxxxx, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier guaranteeing overnight
delivery; and when receipt is acknowledged by the addressee, if telecopied.
15
11. Successors. This Agreement shall inure to the benefit of and
be binding upon each Purchaser and the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person. No purchaser of Securities from
any Purchaser will be deemed a successor because of such purchase.
12. No Waiver; Modifications in Writing. No failure or delay on
the part of the Company or any Purchaser in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or any Purchaser at law or in
equity or otherwise. No waiver of or consent to any departure by the Company or
any Purchaser from any provision of this Agreement shall be effective unless
signed in writing by the party entitled to the benefit thereof, provided that
notice of any such waiver shall be given to each party hereto as set forth
below. Except as otherwise provided herein, no amendment, modification or
termination of any provision of this Agreement shall be effective unless signed
in writing by or on behalf of each of the Company and the relevant Purchaser.
Any amendment, supplement or modification of or to any provision of this
Agreement, any waiver of any provision of this Agreement, and any consent to any
departure by the Company or any Purchaser from the terms of any provision of
this Agreement shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement, no notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar or
other circumstances.
13. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
14. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
GIVING EFFECT TO PROVISIONS RELATING TO CONFLICTS OF LAW TO THE EXTENT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this Agreement shall constitute a binding agreement among the Company
and the Purchasers.
Very truly yours,
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President & Chief
Executive Officer
SECURITIES PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and Agreed
Number of Shares of Series E
Preferred Stock Purchased: __________
Total Investment: $_________________
-------------------------------------
Name of Purchaser (Print)
By:
----------------------------------
Name:
Title:
Date:
--------------------------------
Address:
-----------------------------
-----------------------------
Telephone:
---------------------------
Facsimile:
---------------------------
Please register Shares as follows:
Name:
--------------------------------
--------------------------------
--------------------------------
Tax I.D. Number of Person in whose
name the Shares are to be registered:
-------------------------------------
Exhibit A
FORM OF WARRANT
Exhibit B
CERTIFICATE OF DETERMINATION
2
Exhibit C
OPINION OF COUNSEL
3
