SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) October 15, 1997
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BIOJECT MEDICAL TECHNOLOGIES INC.
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(Exact Name of Registrant as Specified in Charter)
Oregon
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(State or Other Jurisdiction of Incorporation)
0-15360 93-1099680
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(Commission File Number) (IRS Employer Identification No.)
7620 SW Bridgeport Road
Portland, Oregon 97224
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (503) 639-7221
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events
On September 30, 1997, the Company executed a binding letter
agreement with Elan Corporation, plc ("Elan plc") and Elan
International Services, Ltd. ("Elan"), a wholly-owned subsidiary
of Elan plc, covering various investments in the Company by Elan,
the formation of the Company's new subsidiary, Bioject JV
Subsidiary Inc. ("JV Sub"), and a license (the "License") by
Elan plc to JV Sub of certain patents and know-how (the
"Technology") related to systems for the continuous monitoring of
glucose levels in persons with diabetes. The parties anticipate
that an ambulatory monitoring system will be developed under the
License. The system is expected to include a patch-like sensor
coupled with a wrist watch-type monitoring device to measure
glucose levels. Human clinical trials of the system are
presently expected to begin in early 1998. The final
documentation for the License and related transactions described
below was executed on October 15, 1997. Elan plc is a worldwide
drug delivery and biopharmaceutical company with its principal
research and manufacturing facilities in Ireland, the United
States and Israel. Elan plc's shares trade on the New York,
London and Dublin Stock Exchanges.
JV Sub is owned 80.1 percent by the Company and 19.9 percent by
Elan. Elan has invested approximately $3 million in JV Sub's
Common Stock and the Company has invested $12.015 million in JV
Sub's Common Stock.
Elan loaned the Company the funds the Company has invested in JV
Sub. The loan is evidenced by a promissory note issued by the
Company (the "Note"). The Note bears interest from and after
October 15, 1997 at the rate of 9% until December 31, 1997 and
12% thereafter.
The Company will be calling a special meeting of its shareholders
to approve (i) the exchange of the Note for the Company's
convertible preferred stock, (ii) the issuance of convertible
preferred stock to fund future financing obligations of JV
Sub and (iii) the issuance of a warrant to the Company's
agent in connection with the transactions with Elan (the "Proposal").
If the Proposal is approved, the Note will be canceled and exchanged
for the Company's Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock. Of the total outstanding principal
and accrued interest on the Note at the date of exchange, $10
million plus accrued interest on the Note will be exchanged for
Series A Convertible Preferred Stock at $15.00 per share. The
Series A Convertible Preferred Stock will accrue dividends at the
rate of 9% per annum (compounded semi-annually). The remaining
$2.015 million outstanding under the Note will be exchanged for
Series B Convertible Preferred Stock at $15.00 per share, which
will not accrue dividends. Each share of the Series A and
Series B Convertible Preferred Stock is convertible into 10
shares of the Company's Common Stock, subject to adjustment.
At the end of seven years the orginal issuance price and
accrued and unpaid dividends of any Series A and Series B
Convertible Preferred Stock not previously converted or redeemed
will convert automatically to common stock at a conversion price
equal to the lesser of $1.50 per share or 80% of the then
market price.
Elan plc has agreed to conduct at its expense certain research
and development efforts related to the Technology
until the first to occur of (i) commencement of human trials,
(ii) April 1, 1998 or (iii) the devotion by Elan plc to such further
research and development efforts of aggregate Elan plc resources equal
to $2.5 million. Following the completion of such research efforts at
Elan plc, the responsibility for funding the project shifts to JV
Sub. Elan plc has agreed to make itself available to conduct
other development and commercialization efforts as may be
describe for it in one or more development plans to be agreed in
good faith by JV Sub and Elan plc. JV Sub will be required to
pay Elan plc for such further work, but if the Proposal is
approved by the Company's shareholders, JV Sub would be receive a
discounted price for such further work by Elan plc.
JV Sub intends to obtain up to $5 million of the funds required
for the further development and commercialization of the
Technology in the form of the further investment in JV Sub equity
of approximately $4 million by the Company and approximately $1
million by Elan. The Company and Elan have indicated their
intention to make these further investments in JV Sub, provided
that JV Sub's Board of Directors determines that such funds are
required for development of the Technology pursuant to a
development plan which has been approved by Elan. Each of the Company
and Elan have reserved the right to withhold its share of the
additional funding, but each has agreed not to do so
unreasonably. Elan will in any event not be obligated to fund
any amount in excess of 25% of the amount of such additional
investments by the Company, nor to make any further investments
following the expiration of 30 months after the earlier of (i)
February 1, 1998 and (ii) the date of the Company's shareholders
approve the Proposal.
Provided that the Company's shareholders approve the Proposal,
the Company intends to obtain approximately $4
million necessary for its further investment in JV Sub equity by the sale
to Elan of convertible preferred stock in that amount. The
agreement by EIS to purchase such Series C Preferred Stock will
expire 30 months after the date the Company's shareholders
approve the Proposal.
The Company and JV Sub anticipate that significant levels of
funding will be required to develop the Technology in addition to
the funding that is described above. The additional funding
will be raised through the future issuances of debt or equity by
either or both of the Company and JV Sub.
Subject to certain conditions, Elan has also agreed
to loan JV Sub further funds to support
the research, development and commercialization of the
Technology after JV Sub has expended a specified amount
on research and development and provided that JV Sub
is not readily able to obtain such funds from other
sources. Such funding would constitute senior indebtedness
of JV Sub.
Under the License, Elan plc has granted JV Sub an exclusive
license to the Technology in North America for use in glucose
monitoring. If the Company's shareholders approve the Proposal,
this will become an exclusive worldwide license for such use.
The continued exclusivity of JV Sub's License is contingent, on a
country-by-country basis, on JV Sub's refraining from commercializing
products which would compete with the products covered by the licensed
Elan plc Technology. Further, the License itself is contingent, on a
country-by-country basis, on JV Sub's diligently seeking and
obtaining regulatory marketing approval for licensed products and
on JV Sub's timely commercial launch of the licensed products in
countries where such approval has been obtained.
The Company believes that the License is likely to run for most
of the useful life of the products that may be
commercialized under it. In the event that a significant
percentage of JV Sub's equity is acquired by any one of a number
of specified companies identified as actual or potential competitors of
Elan plc, or any other entity to which Elan plc does not consent
(which consent shall not be unreasonably withheld), the license
agreement may be immediately terminated at the option of Elan
plc.
JV Sub has paid Elan plc an initial royalty under the License
equal to $15 million. In addition, JV Sub is required under the
License to pay Elan plc substantial further royalties in stated
amounts as certain milestones are achieved, including
commencement and completion of certain product trials, the filing
of applications for regulatory marketing approval, and the grant
of such approval. If the Company's shareholders approve the
Proposal described herein, thereby extending the territory of the
License to be worldwide, the royalty payment called for upon the
grant of US marketing approval will be split into two payments,
one to be paid upon the grant of such US marketing approval and the other
to be paid upon the grant of marketing approval in any other of certain
major nations listed. Additionally, JV Sub will be required under the
License to pay Elan plc a continuing royalty equal to a percentage of the
net revenues from sublicenses of the Technology or from the sale
by JV Sub or its sublicensees of products covered by the licensed
patents or that incorporate or apply the licensed know-how. The
percentage royalty will increase in stages as the aggregate net
revenues in a given fiscal year exceed stated levels. These
stated levels will be greater if the Company's shareholders
approve the Proposal, reflecting the larger
potential market for such products under the License once its
territory has been expanded to be worldwide.
Elan has invested $3 million in the Company in exchange for
2,727,273 shares of the Company's Common Stock and a five-year
warrant to purchase an additional 1,750,000 shares of Common
Stock at $2.50 per share. The Company has agreed that it will use
its best efforts to cause a nominee of Elan to be elected to its
Board of Directors for as long as Elan owns at least a 5 percent
equity position in the Company (this level will increase to 10%
in seven years). The Company's Board of Directors added Michael
Sember, Elan's Vice President of Planning, Investment and
Development, as a director effective October 16, 1997, the day
following the closing of the transactions contemplated by the
letter agreement.
Elan has agreed that for a period of three years it will not (i)
purchase shares or assets of the Company from third parties (ii)
participate in a tender or exchange offer, merger or other
business acquisition involving the Company, (iii) participate in
any recapitalization, restructuring, liquidation, dissolution or
other extraordinary transaction with respect to the Company, (iv)
solicit proxies or consents to vote any voting securities or the
Company, (v) attempt to influence management or control of the
Company or (vi) change the composition of the Company's Board of
Directors; provided that such agreement will not apply if a
tender offer or a proxy solicitation with respect to an
acquisition proposal is made by a party which has been invited in
writing by the Company or is unaffiliated with Elan.
Elan has also agreed to fund $500,000 of development expenses for
the development of pre-filled medication applications for the
Company's needle-free injection technology. The funding will
commence in the first quarter of fiscal 1998, upon written
request from the Company, in the form of grants to the Company
in four equal, quarterly (in arrears) payments of $125,000.
For its services in connection with the transactions described
above and the introduction of the Company to Elan, Raphael LLC, a
management consulting company, will receive a cash payment in the
amount of $150,000 and, subject to shareholder approval requested
in the Proposal, a five-year warrant to purchase 100,000 shares
of the Company's Common Stock at an exercise price of $0.85 per
share. If shareholder approval is not received, Raphael LLC will
receive an additional cash payment in an amount to be negotiated
in lieu of the warrant. For the period ended September 30, 1997, the
Company has taken a charge to expense for the amount of the $15 million
licensing fee, of which $12.015 million is reportable against the Company's
consolidated results of operations. The difference between the aggregate
amount of the licensing fee and the reportable net amount by the
Company represents the portion of the fee allocable to the minority
interest in JV Sub.
Item 7. Exhibits
10.40 License Agreement between Elan Corporation, plc and
Bioject JV Subsidiary Inc. dated October 15, 1997.
Confidential treatment has been requested with respect to
certain portions of this exhibit pursuant to an Application
for Confidential Treatment filed with the Commission under
Rule 24b-2(b) under the Securities Exchange Act of 1934, as
amended.
10.41* Securities Purchase Agreement between Elan
International Services, Ltd. and Bioject Medical Technologies
Inc. dated October 15, 1997.
10.42* Bioject Medical Technologies Inc. Registration Rights
Agreement between Elan International Services, Ltd. and
Bioject Medical Technologies Inc. dated October 15, 1997.
10.43* Series K Warrant to Purchase Shares of Common Stock
dated October 15, 1997.
10.44 Promissory Note dated October 15, 1997 in favor of
Elan International Services, Ltd.
10.45 Newco Subscription and Stockholders Agreement between
Elan International Services, Ltd., Bioject Medical
Technologies Inc. and Bioject JV Subsidiary Inc. dated October
15, 1997. Confidential treatment has been requested with
respect to certain portions of this exhibit pursuant to an
Application for Confidential Treatment filed with the
Commission under Rule 24b-2(b) under the Securities Exchange
Act of 1934, as amended.
10.46 Bioject JV Subsidiary Inc. Registration Rights Agreement
between Elan International Services, Ltd. and Bioject JV
Subsidiary Inc. dated October 15, 1997.
* Previously filed with the Company's Form 8-K filed on October 31, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BIOJECT MEDICAL TECHNOLOGIES INC.
Date: November 3, 1997 By /s/ Peggy J. Miller
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Peggy J. Miller
Vice President, Chief Financial
Officer, Secretary/Treasurer
EXHIBIT 10.40
This Agreement is made the 15th day of October 1997
BY AND BETWEEN
ELAN CORPORATION, plc
An Irish company, of Lincoln House, Lincoln Place, Dublin 2, Ireland.
AND
BIOJECT JV SUBSIDIARY INC.
A Corporation organised and existing under the laws of the State of
Oregon having an office at 7620 S.W. Bridgeport Road,
Portland, Oregon 97224, United States of America.
WHEREAS
- -ELAN owns and is beneficially entitled to the use of various patents,
including the ELAN PATENT RIGHTS, which have been granted or are pending under
the International Convention in relation to the development and production of
monitoring devices and drug delivery devices and processes, and
- -ELAN is knowledgeable in the development of devices and methods for directly
or indirectly monitoring the concentration of glucose in a subject and has
developed unique monitoring devices and methods, and
- -JV SUB is desirous of entering into a licensing agreement with ELAN to
further develop, manufacture and have manufactured in accordance with the
terms of this AGREEMENT and to market, sell and distribute the PRODUCTS in the
TERRITORY without infringing the ELAN GLUCOSE MONITOR TECHNOLOGY, and
- -ELAN is prepared to license the ELAN PATENT RIGHTS in the TERRITORY to JV SUB.
NOW IT IS HEREBY AGREED AS FOLLOWS:
ARTICLE I : DEFINITIONS
1.1.In the present AGREEMENT and any further agreements based thereon between
the Parties hereto, the following definitions shall prevail:
AFFILIATE shall mean any corporation or entity controlling, controlled by or
under the common control of ELAN or JV SUB as the case may be. For the
purpose of this paragraph, "control" shall mean the direct or indirect
ownership of at least fifty per cent (50%) of the outstanding shares or other
voting rights of the subject entity to elect directors, or if not meeting the
preceding criteria, any entity owned or controlled by or owning or controlling
at the maximum control or ownership right permitted in the country where such
entity exists.
2 AGREEMENT shall mean this agreement.
BIOJECT shall mean Bioject Medical Technologies Inc. and its AFFILIATES,
excluding JV SUB.
4. BUSINESS PLAN shall mean the business plan to be adopted by the Board of
Directors of JV SUB and approved by ELAN (which approval shall not be
unreasonably withheld or delayed) from time to time. The initial form of the
BUSINESS PLAN will be adopted and approved as soon as is practicable, the
Parties agreeing that both expect that such initial BUSINESS PLAN will be
approved in any event not later than forty five (45) days after the
EFFECTIVE DATE.
5. cGP shall mean, depending on the regulatory context, current Good Clinical
Practises and/or current Good Laboratory Practises and/or current Good
Manufacturing Practises.
6. COMPETING PRODUCT shall mean a product [CONFIDENTIAL PORTION OMITTED].
7. CONFIDENTIAL INFORMATION shall mean information, material or data relating
to the FIELD not generally known to the public. CONFIDENTIAL INFORMATION in
tangible form disclosed hereunder shall be marked as "Confidential" at the
time it is delivered to the receiving Party. CONFIDENTIAL INFORMATION
disclosed orally shall be identified as confidential or proprietary when
disclosed and such disclosure of CONFIDENTIAL INFORMATION shall be confirmed
in writing within thirty (30) days by the disclosing Party.
8.EARLY STAGE DEVELOPMENT PLAN shall have the meaning set forth in Article III
Paragraph 2.
9. EFFECTIVE DATE shall mean the 15th day of October 1997.
10. ELAN shall mean Elan Corporation, plc and any of its AFFILIATES (which for
the avoidance of doubt shall exclude JV SUB and BIOJECT).
11.ELAN GLUCOSE MONITOR TECHNOLOGY shall mean the ELAN PATENT RIGHTS
and/or the ELAN KNOW-HOW.
12. ELAN KNOW-HOW shall mean all scientific or technical knowledge, information
or expertise, including clinical data and test results, which is not generally
known to the public, developed, produced, created or acquired by or on behalf
of ELAN, whether prior to or during the term of this AGREEMENT, including
without limitation in the course of the development activities called for
under Article III (including ELAN IMPROVEMENTS but excluding JOINT
IMPROVEMENTS), relating to the FIELD, whether or not covered by any patent,
copyright, design patent, trademark, trade secret or other industrial or
intellectual property rights. Insofar as ELAN licenses or acquires third party
technology, ELAN shall use commercially reasonable efforts to exclude or where
applicable to minimise the extent of any limitations or restrictions on the
inclusion of such technology in the ELAN KNOW-HOW.
13. ELAN PATENT RIGHTS shall mean all issued patents and/or pending patent
applications relating to the FIELD owned or licensed by or on behalf of ELAN,
whether prior to or at any time during the TERM including without limitation
issued patents and /or pending applications to the extent directed to any of
the ELAN KNOW-HOW (including ELAN IMPROVEMENTS but excluding JOINT
IMPROVEMENTS). The current status of the ELAN PATENT RIGHTS is described by
ELAN in APPENDIX A. ELAN PATENT RIGHTS shall also include all continuations,
continuations-in-part, divisionals, re-issues and re-examinations of such
patents and patent applications and any patents issuing thereon and extensions
of any patents licensed hereunder and periods of market exclusivity.
[CONFIDENTIAL PORTION OMITTED].
14.ELAN TRADEMARK shall have the meaning set forth in Article II Paragraph
11.4.
15.FDA shall mean the United States Food and Drug Administration or any other
successor agency, whose approval is necessary to market the PRODUCTS in the
United States of America.
16.FIELD shall mean [CONFIDENTIAL PORTION OMITTED].
17.IN MARKET shall mean [CONFIDENTIAL PORTION OMITTED].
18. JOINT IMPROVEMENTS shall have the meaning set forth in Article VIII
Paragraph 1.
19.JV SUB shall mean BIOJECT JV SUBSIDIARY INC. and any of its AFFILIATES,
including BIOJECT.
20 JV SUB KNOW-HOW shall mean all scientific or technical knowledge, including
clinical data and test results, information or expertise developed, produced,
created or acquired by or on behalf of JV SUB which is not generally known to
the public, which is developed by or on behalf of JV SUB whether prior to or
during the TERM, to the extent it constitutes: (I) a modification of or an
improvement on the ELAN GLUCOSE MONITORING TECHNOLOGY having potential
application outside the FIELD and/or (II) technology that is necessary for the
research, development or commercialisation of the PRODUCTS, whether or not
covered by any patent, copyright, design patent, trademark, trade secret or
other industrial or intellectual property rights (but excluding ELAN KNOW-HOW
and JOINT IMPROVEMENTS).
21. JV SUB PATENT RIGHTS shall mean all issued patents and/or pending patent
applications to the extent directed to any of the JV SUB KNOW-HOW owned or
licensed by or on behalf of JV SUB (excluding ELAN PATENT RIGHTS and JOINT
IMPROVEMENTS), together with all continuations, continuations-in-part,
divisionals, re-issues and re-examinations of such patents and patent
applications and any patents issuing thereon and extensions of any patents
licensed hereunder.
22. LISTED COMPANIES shall mean the legal entities set out in APPENDIX B or
any subsidiary of any such entity, where the entity directly or indirectly
owns at least [CONFIDENTIAL PORTION OMITTED] of the outstanding shares or
other voting rights of the subsidiary to elect directors, or if not meeting
the preceding criteria, where the entity owns or controls the maximum control
or ownership right permitted in the country where such subsidiary exists;
provided, however, that if ELAN or any of its AFFILIATES (for the avoidance of
doubt other than BIOJECT and JV SUB) at any time becomes owner to the extent of
more than [CONFIDENTIAL PORTION OMITTED] of the fully-diluted equity by any
of the LISTED COMPANIES, then that LISTED COMPANY shall thereupon be removed
from the LISTED COMPANIES.
23. MAJOR MARKETS shall mean [CONFIDENTIAL PORTION OMITTED].
24. NET REVENUES shall mean:
24.1. [CONFIDENTIAL PORTION OMITTED].
24.2. [CONFIDENTIAL PORTION OMITTED].
24.2.1. [CONFIDENTIAL PORTION OMITTED].
24.2.2. [CONFIDENTIAL PORTION OMITTED].
24.2.3. [CONFIDENTIAL PORTION OMITTED].
24.2.4. [CONFIDENTIAL PORTION OMITTED].
24.2.5 [CONFIDENTIAL PORTION OMITTED].
[CONFIDENTIAL PORTION OMITTED].
[CONFIDENTIAL PORTION OMITTED].
[CONFIDENTIAL PORTION OMITTED].
25. Party shall mean JV SUB or ELAN, as the case may be. "Parties" shall
mean JV SUB and ELAN.
26. PMA shall mean one or more of (I) a Pre-Market Application, (II) New Drug
Applications or (III) 510(k) or other substantially similar applications which
JV SUB shall file, including any supplements or amendments thereto, which JV
SUB may file for a PRODUCT with the FDA and/or a REGULATORY AUTHORITY.
27. PRODUCT(S) shall mean all devices or any parts thereof used, developed,
manufactured, offered for sale or sold by or on behalf of JV SUB within the
FIELD which but for the granting of the licenses by ELAN pursuant to Article
II would infringe the ELAN PATENT RIGHTS or the patents incorporated in the
JOINT IMPROVEMENTS and/or which incorporate or apply the ELAN KNOW-HOW and/or
the JOINT IMPROVEMENTS. [CONFIDENTIAL PORTION OMITTED].
28. PROJECT shall mean all activity as undertaken by ELAN and JV SUB in order
to develop the PRODUCT in accordance with the BUSINESS PLAN.
29. PROJECT TEAM shall mean the group to be established pursuant to Article
VII.
30. REGULATORY APPROVAL shall mean (i) approval for sale and marketing of one
or more of the PRODUCTS by the FDA in the United States of America, and/or
(ii) approval for sale and marketing of one or more of the PRODUCTS in the
other countries of the TERRITORY by the applicable REGULATORY AUTHORITIES.
31. REGULATORY AUTHORITIES shall mean one or more regulatory authorities
whose approval is necessary to market the PRODUCTS in the TERRITORY outside
of the United States of America where JV SUB intends to obtain REGULATORY
APPROVAL.
32. RESEARCH AND DEVELOPMENT COST shall mean in the case of research and
development being conducted by or on behalf of ELAN for JV SUB pursuant to
Article III, the fully allocated costs thereof calculated in accordance
with generally accepted Irish accounting principles consistently applied.
33. SHAREHOLDER APPROVAL shall have the meaning as defined in the Securities
Purchase Agreement entered into on the EFFECTIVE DATE between BIOJECT and
Elan International Services Limited.
34. SUBLICENSEE shall mean a sublicensee appointed by JV SUB or ELAN as the
case may be, or where applicable a sublicensee appointed by such a
sublicensee, pursuant to the provisions of the AGREEMENT.
35. TERM shall have the meaning set forth in Article IX Paragraph 1.
36. TERRITORY shall mean the United States of America, Canada and Mexico;
however if SHAREHOLDER APPROVAL is granted, the TERRITORY shall be world-wide.
37. US$ shall mean United States Dollars.
1.2 In this AGREEMENT
1.2.1 the singular includes the plural and vice versa, the masculine includes
the feminine and vice versa and references to natural persons include corporate
bodies, partnerships and vice versa.
1.2.2 any reference to a Article or Appendix shall, unless otherwise
specifically provided, be to an Article or Appendix of this AGREEMENT.
1.2.3 the headings of this AGREEMENT are for ease of reference only and shall
not affect its construction or interpretation.
ARTICLE II : THE LICENCE
1.1. ELAN shall remain proprietor of the ELAN GLUCOSE MONITOR TECHNOLOGY
but hereby grants to JV SUB for the TERM a sole and exclusive (including as
to ELAN) licence in the TERRITORY, with the right to grant sublicences pursuant
to and in accordance with the provisions of Article II Paragraph 2, to
research, develop, manufacture, have manufactured for JV SUB (or its permitted
SUBLICENSEES), import and have imported, use, sell, offer for sale and
otherwise commercialise the ELAN GLUCOSE MONITOR TECHNOLOGY, ELAN's interest
in the JOINT IMPROVEMENTS in the FIELD and the PRODUCTS under the terms and
conditions set out herein.
1.2. [CONFIDENTIAL PORTION OMITTED].
1.3. [CONFIDENTIAL PORTION OMITTED].
2.1. JV SUB may sublicense rights which incorporate the ELAN GLUCOSE MONITOR
TECHNOLOGY with the prior written consent of ELAN which shall not be
unreasonably withheld or delayed; provided, that such reasonableness standard
shall not apply in the case of a proposed sublicence to any of the entities
listed on the LISTED COMPANIES. The nature and extent of the proposed
sub-licence (such as the extent of the territory of the sublicence, the
material terms of the proposed sublicence, and whether the SUBLICENSEE has
the rights of further sublicensing) shall be a relevant factor in determining
whether or not ELAN has acted reasonably or otherwise in making such
determination. JV SUB shall use its reasonable endeavours to ensure that
ELAN shall have the same rights of audit and inspection vis a vis the
SUBLICENSEE as ELAN has pursuant to this AGREEMENT concerning JV SUB.
2.2. Insofar as the obligations owed by JV SUB to ELAN are concerned, JV SUB
shall remain responsible for all acts and omissions of any SUBLICENSEE as if
such acts and omissions were by JV SUB; provided that no such acts or
omissions of such SUBLICENSEE will constitute a material breach of the
AGREEMENT by JV SUB for the purposes of Article IX Paragraph 2. [CONFIDENTIAL
PORTION OMITTED].
3. It is contemplated that the physical transfer of the ELAN KNOW-HOW to be
licensed under this AGREEMENT and the furnishing of copies of relevant patent
documentation regarding the ELAN PATENT RIGHTS shall be completed within
[CONFIDENTIAL PORTION OMITTED] of the EFFECTIVE DATE (it being understood
that this is without prejudice to the later physical transfer of ELAN
IMPROVEMENTS thereafter developed, produced, created or acquired by or on
behalf of ELAN licensed pursuant to the AGREEMENT, including the furnishing
of copies of patent documentation regarding any applicable ELAN PATENT RIGHTS
with respect to ELAN IMPROVEMENTS). ELAN shall, at its expense, provide all
notices and reasonable assistance within such [CONFIDENTIAL PORTION OMITTED]
period to JV SUB to facilitate such transfer (and later, as to any subsequent
transfer of ELAN IMPROVEMENTS); provided, that in the event that JV SUB's
requirements relating to such transfer are in excess of the Parties' current
reasonable, good faith, expectations, the Parties shall negotiate in good
faith reimbursement of ELAN's out-of-pocket expenses.
4. JV SUB shall mark or have marked the patent number on all PRODUCTS, or
otherwise reasonably communicate to the trade concerning the existence of
any ELAN PATENT RIGHTS for the countries within the TERRITORY in such a
manner as to ensure compliance with, and enforceability under, applicable
laws.
Performance by JV SUB
5. [CONFIDENTIAL PORTION OMITTED].
6. [CONFIDENTIAL PORTION OMITTED] JV SUB shall report on the ongoing sales
performance of the PRODUCTS, and the exploitation of the ELAN GLUCOSE MONITOR
TECHNOLOGY in the TERRITORY, [CONFIDENTIAL PORTION OMITTED]. For the
avoidance of doubt, the Parties agree that all information furnished to
ELAN pursuant to this Paragraph shall constitute CONFIDENTIAL INFORMATION
for the purposes of this AGREEMENT.
7. When packaged, and to the extent permitted by law, a product label shall
include an acknowledgement that the PRODUCT is made under licence from or
manufactured by ELAN. Such acknowledgement shall take into consideration
regulatory requirements and JV SUB's commercial requirements. JV SUB shall
wherever possible give due acknowledgement and recognition to ELAN in all
printed promotional and other material regarding the PRODUCT such as stating
that the PRODUCT is under license from ELAN and that the applicable ELAN
GLUCOSE MONITOR TECHNOLOGY has been applied to the PRODUCT. JV SUB shall
consult with and obtain the approval of ELAN as to the format and content of
the promotional and other material insofar as it relates to a description of,
or other reference to, the application of the ELAN GLUCOSE MONITOR TECHNOLOGY.
It shall be presumed that ELAN approved of such use unless ELAN provides
written notice of disapproval of such use to JV SUB within thirty (30) days
of delivery of such materials to ELAN, such approval not to be unreasonably
withheld or delayed. The further consent of ELAN shall not be
required where the format and content of such materials is substantively
materially similar as the materials previously furnished to and approved by
ELAN.
8.1. JV SUB shall effect a national commercial launch of the PRODUCT in each
MAJOR MARKET within [CONFIDENTIAL PORTION OMITTED] of REGULATORY APPROVAL
thereof in such MAJOR MARKET. If JV SUB does not make a national commercial
launch in one or more of the MAJOR MARKETS within the [CONFIDENTIAL PORTION
OMITTED], or such longer period permitted by the provisions of this
Paragraph 8.1, the licences granted to JV SUB hereunder shall with thirty
(30) days notice from ELAN terminate in the applicable country and ELAN shall
be entitled to a licence to commercialise the PRODUCT that was given such
REGULATORY APPROVAL under the JV SUB PATENT RIGHTS and the JV SUB KNOW-HOW
developed, produced, created or acquired by JV SUB, in the applicable country
on the terms set out in Article II Paragraph 8.3. and to the TRADEMARK on
the terms set out in Article II Paragraph 11.2 for such purpose. If in JV
SUB's reasonable commercial judgement, one or more of the [CONFIDENTIAL
PORTION OMITTED] periods specified in this Paragraph 8.1. is insufficient,
the Parties shall negotiate in good faith the applicable extension to the
said [CONFIDENTIAL PORTION OMITTED] period. Notwithstanding the above, in
the event that the Parties disagree whether or not JV SUB has satisfied its
obligations under this AGREEMENT in any country listed above, the
matter may be submitted to arbitration by either Party, and JV SUB's rights
and licenses shall remain in effect until and unless the arbitrator makes a
decision that JV SUB's right and license in such country should terminate.
8.2. JV SUB will use commercially reasonable efforts to file and obtain
REGULATORY APPROVAL in the MAJOR MARKETS as soon as practicable. In the
event of any failure by ELAN to diligently pursue any submission in any
application for regulatory approval in any country which results in JV SUB's
failure to obtain regulatory approval or any delay thereof, the Parties
through the PROJECT TEAM shall make reasonable and appropriate adjustments
to the period in which JV SUB shall have to obtain the applicable regulatory
approvals.
8.3. If (x) JV SUB fails to obtain REGULATORY APPROVAL to commercialise the
PRODUCT in the MAJOR MARKETS within a commercially reasonable time, as
determined by the PROJECT TEAM, or (y) JV SUB fails to effect a commercial
launch of the PRODUCT in the MAJOR MARKETS within the period specified in
Paragraph 8.1. above JV SUB shall, at the option of ELAN, make available and
transfer to ELAN all of JV SUB's data, information, applications, approvals
and filings to permit ELAN to commercialise the PRODUCT in the applicable
country or countries (including access to such data, information, applications,
approvals and filings which is of assistance in obtaining or maintaining
approvals and filings in the applicable country or countries), in consideration
for a royalty of [CONFIDENTIAL PORTION OMITTED] of NET REVENUES (for which
purpose the definition of NET REVENUES as set out in Article I shall apply to
mutatis mutandis) of the PRODUCT, after recovery of the expenses incurred by
ELAN related to the development and commercialisation of such PRODUCTS in the
applicable country or countries of the TERRITORY. Such royalty shall
be payable with respect to such NET REVENUES with respect to a term extending
until the expiration of [CONFIDENTIAL PORTION OMITTED] starting from the
EFFECTIVE DATE, or on a country by country basis for the [CONFIDENTIAL PORTION
OMITTED] included in the JV SUB PATENT RIGHTS or the JOINT IMPROVEMENTS,
whichever is longer. In such event ELAN shall be entitled to an exclusive
licence to the JV SUB PATENT RIGHTS and the JV SUB KNOW-HOW developed,
produced, created or acquired by JV SUB whether prior to or after the
granting of the licence to ELAN), and a licence to the JOINT IMPROVEMENTS to
the exclusion of JV SUB to commercialise the PRODUCT on the terms set out in
this Paragraph and to the TRADEMARK on the terms set out in Article II,
Paragraph 11.2. for such purpose. ELAN may sublicense the rights granted to
it pursuant to this Paragraph to one or more SUBLICENSEES with the prior
written consent of JV SUB which shall not be unreasonably withheld or delayed.
Insofar as JV SUB has licensed or acquired third party technology, JV SUB
shall all commercially reasonable efforts to exclude or where applicable to
minimise the extent of any limitations or restrictions on its use for such
purposes, and it is understood that no such limitations or restrictions shall
be permitted as between BIOJECT and JV SUB. In the event that ELAN acquires
a licence, the Parties shall enter into a further written licence agreement
which shall include customary and reasonable terms relating to, inter alia,
the timing of royalty payments to JV SUB, reporting obligations regarding net
sales, audit rights of JV SUB with respect to books and records relating to
net sales, and indemnity provisions, which obligations shall, unless
otherwise agreed by the Parties, be substantially similar to those in this
AGREEMENT with respect to commercialisation of the PRODUCTS by JV SUB.
8.4.1 JV SUB will use its commercially reasonable efforts to obtain regulatory
approval to commercialise the PRODUCT in the other countries of the TERRITORY
that it selects, having regard to the effort and expenditure required to obtain
regulatory approval for the PRODUCT and the commercial opportunities for the
PRODUCT in such other countries of the TERRITORY.
8.4.2. In the event that the Parties disagree whether JV SUB has satisfied its
obligations under Paragraph 8.4.1. above with regard to one or more of such
other countries of the TERRITORY, the matter may be submitted to arbitration
pursuant to Article X Paragraph 14 by either Party, and JV SUB's rights and
licenses shall remain in effect until and unless the arbitrator makes a
decision that JV SUB's right and license in such country should terminate.
8.4.3. If JV SUB indicates to ELAN that it does not intend to obtain
registration approval and commercialise the PRODUCT in a particular country
or countries of the TERRITORY, or fails to commence commercialisation in any
country within one hundred and (180) days after receiving the required
regulatory approval therefore, ELAN shall be entitled to a licence to the
JV SUB PATENT RIGHTS and the JV SUB KNOW-HOW to commercialise the PRODUCT
in such countries on the terms set out in Article II Paragraph 8.3. and to the
TRADEMARK on the terms set out in Article II Paragraph 11.
Grant of rights to ELAN
9.1. ELAN may use the ELAN GLUCOSE MONITOR TECHNOLOGY and all technical and
clinical data or improvements generated by ELAN pursuant to this AGREEMENT in
connection with ELAN's commercial arrangements for the PRODUCTS in any country
which ceases to be a part of the TERRITORY, or in relation to the PRODUCTS in
the TERRITORY in the event of the termination of this AGREEMENT; provided that
ELAN will not, prior to February 1, 1998, make any such commercial
arrangements, nor any grants of any rights to any third party, anywhere in the
world that would be inconsistent with the extension of the TERRITORY to be
world-wide upon the SHAREHOLDER APPROVAL, with the same effect for all purposes
under this AGREEMENT as if the TERRITORY had been world-wide from the EFFECTIVE
DATE and at all times through the SHAREHOLDER APPROVAL.
9.2. For the avoidance of doubt, nothing in the AGEEMENT shall prevent ELAN
from exploiting the ELAN GLUCOSE MONITOR TECHNOLOGY and all technical and
clinical data or improvements generated by ELAN pursuant to this AGREEMENT
outside the FIELD.
10.1. Subject to the confidentiality and non-disclosure provisions set out in
Article X Paragraph 1, ELAN and JV SUB will share (for no additional
consideration) all relevant information developed in connection with the
PROJECT, relating to the development and commercialisation of the PRODUCT
including pre-clinical, methods, clinical protocols and other necessary or
appropriate data; it being understood that neither Party shall have any right
to any intellectual property or products of the other except as expressly set
forth in this AGREEMENT.
10.2. JV SUB shall be and remain the proprietor of all the JV SUB PATENT RIGHTS
and JV SUB KNOW-HOW, but will grant to ELAN a non-exclusive world-wide,
[CONFIDENTIAL PORTION OMITTED] license, to research, develop, package,
manufacture, have manufactured for ELAN (or its permitted SUBLICENSEES),
import and have imported, use, sell, offer for sale, and otherwise
commercialise under the JOINT IMPROVEMENTS and under the JV SUB KNOW-HOW
that is described in Clause (I) of the definition of "JV SUB KNOW-HOW" in
Article I, and the JV SUB PATENT RIGHTS directed to such JV SUB KNOW-HOW
outside the FIELD. The licence granted pursuant to this Paragraph shall
include patent rights and know-how licensed or acquired by JV SUB from one
or more third parties where JV SUB is free to license and disclose such
improvements. [CONFIDENTIAL PORTION OMITTED]. ELAN may
sublicense the rights granted to it pursuant to this Paragraph to one or more
SUBLICENSEES with the prior written consent of JV SUB which shall not be
unreasonably withheld or delayed.
Trademark
11.1. JV SUB shall market the PRODUCT in the TERRITORY under a TRADEMARK,
whether during the TERM or thereafter, which TRADEMARK will be owned by JV SUB.
JV SUB shall take reasonable steps to register such TRADEMARK within the
TERRITORY where JV SUB reasonably believes exploitation of one or more of the
PRODUCTS shall occur. In the event that JV SUB does not intend to
commercialise the PRODUCT and ELAN obtains a license pursuant to Article II
Paragraph 8.3, ELAN shall be entitled to request JV SUB to register the
TRADEMARK in such country, at ELAN's expense.
11.2. In the event that ELAN acquires a license to the JV SUB PATENT RIGHTS
and the JV SUB KNOW-HOW pursuant to Article II Paragraph 8.3, JV SUB shall
grant ELAN an exclusive royalty free licence to the TRADEMARK solely for use
in connection with the sale of the PRODUCT for the applicable country or
countries of the TERRITORY, in which event the following provisions shall
apply:
11.2.1 ELAN shall as soon as it becomes aware of any infringement give to JV
SUB in writing full particulars of any use or proposed use by any other
person, firm or company of a trade name or trademark or mode or promotion or
advertising which amounts to or might amount either to infringement of JV
SUB's rights in relation to the TRADEMARK or to passing off;
11.2.2. if ELAN becomes aware that any other person, firm or company alleges
that the TRADEMARK is invalid or that the use of the TRADEMARK infringes any
rights of another party or that the TRADEMARK is otherwise attacked or
attackable, ELAN shall immediately give to JV SUB full particulars in writing
thereof and shall make no comment or admission to any third party in respect
thereof; and
11.2.3. JV SUB shall have the right to conduct all proceedings relating to the
TRADEMARK and shall in its sole discretion decide what action, if any, to take
in respect of any infringement or alleged infringement of the TRADEMARK or
passing-off or any other claim or counter-claim brought or threatened in
respect of the use or registration of the TRADEMARK. Any such proceedings
shall be conducted at JV SUB's expense and for its own benefit. In the
event that JV SUB fails to take action in respect of any infringement or
alleged infringement of the TRADEMARK or passing-off or any other claim or
counter-claim brought or threatened in respect of the use or registration of
the TRADEMARK, ELAN may request JV SUB to take such action at the expense of
ELAN.
11.3. In the event that ELAN acquires a license to the JV SUB PATENT RIGHTS
and the JV SUB KNOW-HOW pursuant to Article II Paragraph 8.3, ELAN may at its
discretion advertise and promote the PRODUCT under the TRADEMARK. Except as set
forth in this Paragraph 11, nothing contained in this AGREEMENT shall grant to
ELAN any right, title, or interest in or to TRADEMARK, whether or not
specifically recognised or perfected under applicable laws. At no time during
or after the term of this AGREEMENT shall ELAN challenge or assist others to
challenge any TRADEMARK, or the registration thereof or attempt to register
any trademarks, marks, or trade names confusingly similar to any
TRADEMARK. All representations of any TRADEMARK that ELAN intends to use
shall first be submitted to JV SUB for approval (which shall not be
unreasonably withheld) of design, colour, and other details, or shall be exact
copies of those used by JV SUB. In addition, ELAN shall fully comply with all
reasonable guidelines, if any, communicated by JV SUB concerning the use of
any TRADEMARK.
11.4. ELAN grants to JV SUB an exclusive royalty free licence in the TERRITORY
solely for use in connection with the sale of the PRODUCT, for the TERM to use
any ELAN TRADEMARK, if any, which relates to the ELAN GLUCOSE MONITOR
TECHNOLOGY applicable to the PRODUCT (the "ELAN TRADEMARK"), such as an acronym
for the applicable technology applied to the PRODUCT, on the terms set forth in
Article II Paragraph 11.2.1. to 11.2.3.(including the obligation not to
challenge or assist others to challenge any trademark referred to
in this Paragraph, or the registration thereof or attempt to register any
trademarks, marks, or trade names confusingly similar to any such trademark)
as applied mutatis mutandis. JV SUB shall not be obliged to use the ELAN
TRADEMARK to identify the PRODUCT but at ELAN's request shall be obliged to
use the ELAN TRADEMARK to identify the applicable ELAN technology embodied in
the PRODUCT. For the avoidance of doubt, the Parties hereby confirm
that JV SUB shall not be entitled to a licence to use any trademark owned or
controlled by ELAN which identifies a product and furthermore that nothing in
this Paragraph shall prevent the licensing by ELAN of the ELAN TRADEMARK
outside the FIELD.
12. JV SUB hereby confirms that it intends to manufacture or procure the
manufacture of the PRODUCTS in a manner which fully complies with all
applicable statutes, ordinances and regulations of the United States of
America and other countries with respect to the manufacture of
the PRODUCTS including, but not limited to, the U.S. Federal Food, Drug and
Cosmetic Act and regulations thereunder and cGP.
ARTICLE III: DEVELOPMENT OF THE PRODUCTS
1. Subject to the provisions of Article III Paragraph 2 and Article III
Paragraph 3, JV SUB shall be responsible for the cost of the further
development, registration, manufacture and marketing of the PRODUCTS.
2. The PROJECT TEAM shall prepare and agree upon a development plan in
respect of the PRODUCT, including development work to be undertaken by ELAN
as soon as is practicable and in no event later than forty five (45) days
after the EFFECTIVE DATE (the "EARLY-STAGE DEVELOPMENT PLAN"). The Parties
agree that ELAN shall perform, and shall fund the cost of such development,
pursuant to and in accordance with the EARLY-STAGE DEVELOPMENT PLAN, such
development through and including the first to occur of (I) the first human
clinical trials in healthy human volunteers without regard to the result
thereof;(II) March 31, 1998; or (III) the devotion of ELAN to such further
development pursuant to the EARLY-STAGE DEVELOPMENT PLAN of an aggregate amount
of US$2.5 million (two million five hundred thousand United States dollars)
(using RESEARCH AND DEVELOPMENT COST plus [CONFIDENTIAL PORTION OMITTED]
as the basis for calculating the foregoing aggregate amount.
3. In addition to the research and development to be conducted pursuant to
Paragraph 2 above, the Parties shall each negotiate in good faith the extent
to which ELAN shall provide research and development services to JV SUB.
ELAN will agree to undertake certain research and development work related to
the development and commercialisation of the PRODUCTS as set forth in one or
more development plans agreed to in good faith between ELAN and JV SUB. The
cost of such development work shall be RESEARCH AND DEVELOPMENT COST together
with an additional royalty calculated on the basis of [CONFIDENTIAL PORTION
OMITTED] of the RESEARCH AND DEVELOPMENT COST;
provided, that if SHAREHOLDER APPROVAL is granted, the cost of such
development work shall be at the rate of RESEARCH AND DEVELOPMENT COST
together with an additional royalty calculated on the basis of [CONFIDENTIAL
PORTION OMITTED] of the RESEARCH AND DEVELOPMENT COST.
4. Subject to the provisions of this Article III, JV SUB shall use its
reasonable efforts, as would be deemed commensurate with the achievement of
its own business aims for a similar product of its own to conduct such part
of the PROJECT as the Parties mutually agree shall be conducted by JV SUB.
Subject to the provisions of this Article III, ELAN shall use its
reasonable efforts, as would be deemed commensurate with the achievement of
its own business aims for a similar product of its own, to conduct such part
of the PROJECT as the Parties mutually agree that shall be conducted by ELAN.
JV SUB shall carry out all clinical studies to prevailing cGP and most
specifically in accordance with FDA standards and guidelines.
5. ELAN shall have no liability to JV SUB as a result of any failure or delay
of the PRODUCTS to achieve one or more of the milestones set out in the
PROJECT and/or to obtain the REGULATORY APPROVAL or the approval of the
regulatory authorities in one or more of the other countries of the TERRITORY.
JV SUB shall have no liability to ELAN as a result of any failure or delay of
the PRODUCTS to obtain the REGULATORY APPROVAL or the approval of the
appropriate health regulatory authorities in one or more of the countries of
the TERRITORY.
6. The Parties hereby confirm that each shall undertake its respective part of
the PROJECT as a collaborative effort and that the provisions of this AGREEMENT
requires that each Party diligently carries out those tasks assigned to it
under the PROJECT and as otherwise agreed during the course of the PROJECT.
Each Party shall co-operate with the other in good faith
particularly with respect to unknown problems or contingencies and shall
perform its obligations in good faith and in a commercially reasonable,
diligent and workmanlike manner. Each Party will update the other Party on
the progress of the PROJECT at meetings of the PROJECT TEAM.
7. For the avoidance of doubt, the Parties hereby confirm that a primary
objective of the PROJECT is to generate the PMA and secure REGULATORY APPROVAL
for the PRODUCT from the FDA. As of the date of this AGREEMENT, it is the
Parties' expectation that the body of data so generated in the PROJECT will
also support such applications for regulatory approval that JV
SUB shall make in the other countries of the TERRITORY. In the event however
that such expectation proves unfounded or incorrect and further data is
required to obtain such other approvals as are pursued by JV SUB in the other
countries of the TERRITORY, JV SUB shall determine the viability of proceeding
further with the regulatory application and generation of the further data
requirements.
ARTICLE IV : FINANCIAL PROVISIONS
Initial Royalties
1.1. In consideration for the research and development of the PRODUCT by ELAN
under this AGREEMENT, JV SUB shall pay to ELAN the amounts set out in Article
III Paragraph 3. Subject to the provisions of Article III Paragraph 2, all
research and development work conducted by ELAN pursuant to this AGREEMENT,
including work conducted pursuant to Article III shall be the subject of
Article IV Paragraph 1.
1.2. ELAN will keep accurate records consistent with its normal business
practices, of the efforts expended by it under the PROJECT for which it is
charging JV SUB, which will include the time spent by each person working on
the PROJECT. Each quarter ELAN will send reports to JV SUB in order to
enable JV SUB to monitor ELAN's level of effort to assure JV SUB that the
committed level of effort is being applied.
1.3. If ELAN's development efforts require the use of an unaffiliated third
party, ELAN will, prior to appointing such unaffiliated third party, discuss
with JV SUB the activities to be undertaken by such unaffiliated third party
and the terms and conditions thereof. ELAN will not proceed with such third
party without the prior written approval of JV SUB, which approval shall not
be unreasonably withheld. ELAN shall charge JV SUB for the time spent by
its employees in administering the work conducted by such unaffiliated third
parties on the basis set out in Article III Paragraph 3. ELAN shall have the
right to charge JV SUB for all reasonable out of pocket expenses incurred in
the provision of its obligations thereunder.
Licence Royalties
2. In consideration of the rights and licence granted to JV SUB to the ELAN
PATENT RIGHTS by virtue of this AGREEMENT, JV SUB shall pay to ELAN amounts
as follows:
2.1. [CONFIDENTIAL PORTION OMITTED] upon the date of
execution of this AGREEMENT;
2.2. [CONFIDENTIAL PORTION OMITTED] within ten (10) days
of commencement of pivotal clinical trials relating to the first PRODUCT (it
being a matter for the PROJECT TEAM to determine what constitutes a `pivotal'
clinical trial for the purposes of this Paragraph and Paragraph 2.3. below)
and the concurrent agreement between JV SUB and ELAN of the success criteria
for such pivotal clinical trials, which the Parties intend will include
completed ISS/ISE;
2.3. [CONFIDENTIAL PORTION OMITTED]
within one hundred and twenty (120) days of the successful completion of the
pivotal clinical trials referred to in Paragraph 2.2. above; provided, that JV
SUB shall be liable for interest on such amount at the rate of ten per cent
(10%) per year from and after the date that is sixty (60)days after such
completion;
2.4. [CONFIDENTIAL PORTION OMITTED] within ten (10) days
of the initial filing of a PMA to obtain REGULATORY APPROVAL for marketing of
the first PRODUCT to reach such stage with the FDA; and
2.5. [CONFIDENTIAL PORTION OMITTED] within one hundred
and twenty (120) days of the first REGULATORY APPROVAL for the first PRODUCT
to reach such stage by the FDA provided, that JV SUB shall be liable for
interest on such amount at the rate of ten per cent (10%) per year from and
after the date that is sixty (60) days after such approval; except that, in
the event that SHAREHOLDER APPROVAL is obtained, the following payments shall
be due and owing
2.5.1. [CONFIDENTIAL PORTION OMITTED] within one hundred
and twenty (120) days of the first REGULATORY APPROVAL by the FDA for the
first PRODUCT to reach such stage in the United States of America, provided,
that JV SUB shall be liable for interest on such amount at the rate of ten
per cent (10%) per year from and after the date that is sixty (60) days after
such approval; and
2.5.2. [CONFIDENTIAL PORTION OMITTED] within one hundred
and twenty (120) days of the approval by a REGULATORY AUTHORITY other than the
FDA for the first PRODUCT to reach such stage in one or more MAJOR MARKETS
other than the United States of America, provided, that JV SUB shall be liable
for interest on such amount at the rate of ten per cent (10%) per year from and
after the date that is sixty (60) days after such approval.
All such payments are due upon achievement of the milestone event and are
payable by JV SUB within the number of days specified above following the
occurrence of the milestone, of which event JV SUB will promptly notify ELAN
and ELAN will send an invoice to JV SUB for the corresponding milestone
payment. The foregoing licence royalties shall be non-recoverable by JV SUB.
Royalty on NET REVENUES
3.1. In consideration of the license of the ELAN PATENT RIGHTS to JV SUB, the
royalties payable by JV SUB to ELAN shall calculated by reference to the NET
REVENUES generated by JV SUB or its sublicensees on or after the EFFECTIVE
DATE.
3.2. The royalty payable shall vary from [CONFIDENTIAL PORTION OMITTED]
to [CONFIDENTIAL PORTION OMITTED] of NET REVENUES based upon the following
([CONFIDENTIAL PORTION OMITTED] amounts refer to royalty rates, and
[CONFIDENTIAL PORTION OMITTED] amounts refer to NET REVENUES in a
fiscal year):
3.2.1. [CONFIDENTIAL PORTION OMITTED] on the first [CONFIDENTIAL PORTION
OMITTED],
3.2.2. [CONFIDENTIAL PORTION OMITTED] on the amount between
[CONFIDENTIAL PORTION OMITTED] and [CONFIDENTIAL PORTION OMITTED], and
3.2.3. [CONFIDENTIAL PORTION OMITTED] on the amount in excess of
[CONFIDENTIAL PORTION OMITTED]; provided, that in the event of SHAREHOLDER
APPROVAL, such royalties shall be as follows:
3.2.4. [CONFIDENTIAL PORTION OMITTED] on the first [CONFIDENTIAL PORTION
OMITTED],
3.2.5. [CONFIDENTIAL PORTION OMITTED] on the amount between [CONFIDENTIAL
PORTION OMITTED] and [CONFIDENTIAL PORTION OMITTED], and
3.2.6. [CONFIDENTIAL PORTION OMITTED] on the amount in excess of
[CONFIDENTIAL PORTION OMITTED].
Royalty Payments, Reports and Records
4.1. Within [CONFIDENTIAL PORTION OMITTED] of the end of each quarter in
which NET REVENUES have been earned, JV SUB shall notify ELAN of the NET
REVENUES for that preceding quarter. Payments shown by each calendar quarter
report to have accrued shall be due on the date such report is due. All
payments due hereunder shall be made to the designated bank account of ELAN
in accordance with such timely written instructions as ELAN shall from time
to time provide.
4.2. JV SUB shall keep and shall cause its AFFILIATES and sublicensees to
keep true and accurate records of sales of PRODUCTS, other transactions giving
rise to NET REVENUES, and the royalties payable to ELAN under Article IV hereof
and shall deliver to ELAN a written statement thereof within [CONFIDENTIAL
[PORTION OMITTED] days following the end of each calendar quarter in which
NET REVENUES have been earned (or any part thereof in the last calendar
quarter of this AGREEMENT in which NET REVENUES are earned) for such calendar
quarter. Said written statements shall set forth (I) for each PRODUCT
[CONFIDENTIAL PORTION OMITTED], the calculation of NET REVENUES from gross
revenues during that calendar quarter, the applicable percentage royalty
rates, and a computation of such royalties due and (II) such details of the
transactions as are relevant to the calculation of NET REVENUES.
4.3. All payments due hereunder shall be made in United States Dollars.
Payments due on NET REVENUES received in a currency other than United States
Dollars shall first be calculated in the foreign currency and then converted
to United States Dollars on the basis of the average of the exchange rates in
effect for the purchase of United States Dollars with such foreign currency
quoted in the Wall Street Journal (or comparable publication if not quoted
in the Wall Street Journal) with respect to the currency of the country or
origin of such payment for the last business day of each month for which the
payment is being made.
4.4. ELAN shall have the right to have access, on reasonable notice, to JV
SUB's or JV SUB's SUBLICENSEES' financial documentation and records during
reasonable business hours for the purpose of verifying the royalties payable
as provided in this AGREEMENT for the two preceding years. This right may
not be exercised more than once in any calendar year, and once a calendar
year is audited it may not be reaudited. For the avoidance of doubt, the
Parties agree that all information furnished to ELAN pursuant to this
Paragraph shall constitute CONFIDENTIAL INFORMATION for the purposes of this
AGREEMENT.
4.5. Any adjustment required by such inspection shall be made within thirty
(30) days of the agreement of the Parties or, if not agreed, upon the
determination of an arbitrator to whom any dispute under this Paragraph shall
be submitted to arbitration pursuant to Article X Paragraph 14. If the
adjustment payable to ELAN is greater than [CONFIDENTIAL PORTION OMITTED] of
the amount paid for the relevant period, then the cost to ELAN for the
inspection, and if applicable the arbitration, shall be paid by JV SUB;
[CONFIDENTIAL PORTION OMITTED]. In addition, JV SUB shall pay interest to
ELAN [CONFIDENTIAL PORTION OMITTED] (applicable as of the date on which
payment should have been made pursuant to Article IV Paragraph 3), from
the date on which payment should have been
made pursuant to Article IV Paragraph 3 until the date of payment.
4.6. Subject to the provisions of Article IV Paragraphs 2.3 and 2.5, JV SUB
shall pay interest to ELAN [CONFIDENTIAL PORTION OMITTED]
(applicable as of the date on which payment should have
been made pursuant to the applicable provisions of this AGREEMENT) from the
date on which payment should have been made pursuant to the applicable
provision until the date of payment.
ARTICLE V REGISTRATION OF THE PRODUCTS
1. During the TERM, JV SUB shall be responsible for filing and prosecuting
all PMAs and other applications for regulatory approvals. JV SUB or its
sublicensees shall file the PMAs with the FDA and will use its reasonable
efforts in prosecuting said PMA to approval. JV SUB shall maintain at its
own cost the PMAs with the FDA for the term of this AGREEMENT. JV SUB
hereby agrees to provide to ELAN at ELAN's own cost access to such PMAs as
ELAN reasonably requests. It is not the intention of the Parties that JV
SUB shall furnish to ELAN a copy of each PMA. [CONFIDENTIAL PORTION OMITTED].
During the PMA registration procedure, JV
SUB shall keep ELAN promptly and fully advised of JV SUB's registration
activities, progress and procedures. For the avoidance of doubt, the
Parties agree that all information furnished to ELAN pursuant to
this Paragraph shall constitute CONFIDENTIAL INFORMATION for the purposes of
this AGREEMENT.
2. It is hereby acknowledged that there are inherent uncertainties involved
in the development and registration of pharmaceutical products with the FDA
or any other regulatory body in the TERRITORY insofar as obtaining approval
is concerned and such uncertainties form part of the business risk involved
in undertaking the form of commercial collaboration as set forth in this
AGREEMENT.
3. JV SUB shall indemnify and hold harmless ELAN, its agents and employees
from and against all claims, damages, losses, liabilities and expenses to
which ELAN, its agents, and employees may become subject related to or
arising out of JV SUB's bad faith, gross negligence or intentional
misconduct in connection with the filing or maintenance of the PMA and its
foreign counterparts.
ARTICLE VI: REPRESENTATIONS, WARRANTIES
1. ELAN represents to JV SUB the following:
1.1. ELAN is duly and validly existing in the jurisdiction of its
incorporation and each other jurisdiction in which the conduct of its
business requires such qualification, and is in compliance with all
applicable laws, rules, regulations or orders relating to its business and
assets;
1.2. ELAN has full corporate authority to execute and deliver this AGREEMENT
and to consummate the transactions contemplated hereby; this AGREEMENT has been
duly executed and delivered by ELAN and constitutes the legal and valid
obligations of ELAN and is enforceable against ELAN in accordance with its
terms and the execution, delivery and performance of this AGREEMENT and the
transactions contemplated hereby and will not violate or result in a default
under or creation of lien or encumbrance under ELAN's memorandum and articles
of association or other organic documents, any material agreement
or instrument binding upon or affecting ELAN or its properties or assets or
any applicable laws, rules, regulations or orders affecting ELAN or its
properties or assets;
1.3. ELAN is not in material default of its memorandum and articles of
association or similar organic documents, any applicable material laws or
regulations or any material contract or agreement binding upon or affecting
it or its properties or assets and the execution, delivery and performance
of this AGREEMENT and the transactions contemplated hereby will not result
in any such violation;
1.4. ELAN represents and warrants that ELAN is the sole and exclusive owner
or licensee of, or controls all right, title and interest to the ELAN GLUCOSE
MONITOR TECHNOLOGY;ELAN has the right to grant the licenses granted herein, and
the ELAN GLUCOSE MONITOR TECHNOLOGY is free and clear of any lien,
encumbrances, security interest or restriction on the licence granted herein;
ELAN will not grant during the term of this AGREEMENT, any right, license or
interest in and to the ELAN GLUCOSE MONITOR TECHNOLOGY or the PRODUCTS, or any
portion thereof, inconsistent with the license granted herein, nor, as provided
in Article II Paragraph 9.1, inconsistent with the expansion of the TERRITORY
upon the SHAREHOLDER APPROVAL; and to the best of ELAN's knowledge and belief
there are no pending or threatened adverse actions, suits, investigations,
claims or proceedings brought by one or more Third Parties related to the ELAN
GLUCOSE MONITOR TECHNOLOGY as of the EFFECTIVE DATE; and
1.5. ELAN represents and warrants that the execution of this AGREEMENT and the
full performance and enjoyment of the rights of JV SUB under this AGREEMENT
will not breach or in any way be inconsistent with the terms and conditions
of any licence, contract, understanding or agreement, whether express, implied,
written or oral between ELAN and any third party.
2. JV SUB represents to ELAN the following:
2.1. JV SUB is duly and validly existing in good standing in the jurisdiction
of its incorporation and each other jurisdiction in which the conduct of its
business requires such qualification, and JV SUB is in compliance with all
applicable laws, rules, regulations or orders relating to its business and
assets;
2.2. JV SUB has full corporate authority to execute and deliver this AGREEMENT
and to consummate the transactions contemplated hereby; this AGREEMENT has been
duly executed and delivered and constitutes the legal and valid obligations of
JV SUB and is enforceable against JV SUB in accordance with its terms; and the
execution, delivery and performance of this AGREEMENT and the transactions
contemplated hereby will not violate or result in a default under or creation
of lien or encumbrance under JV SUB's certificate of incorporation, by-laws
or other organic documents, any material agreement or instrument
binding upon or affecting JV SUB or its properties or assets or any applicable
laws, rules, regulations or orders affecting JV SUB or its properties or
assets;
2.3. JV SUB is not in default of its charter or by-laws, any applicable laws or
regulations or any material contract or agreement binding upon or affecting it
or its properties or assets and the execution, delivery and performance of this
letter agreement and the transactions contemplated hereby will not result in
any such violation; and
2.4. JV SUB represents and warrants that it has not granted any option,
licence, right or interest to any third party which would conflict with the
terms of this AGREEMENT.
3. JV SUB represents and warrants that the PRODUCTS shall be manufactured,
packaged, distributed and sold in accordance with all regulations and
requirements of the FDA and foreign regulatory authorities including, without
limitation, the cGP regulations which apply to the manufacture, storage,
packaging and supply of the PRODUCT. JV SUB represents and warrants
that the PRODUCTS shall not be adulterated or mis-branded as defined by the
Federal Food, Drug and Cosmetic Act, (or applicable foreign law) and shall
not be a product which would violate any section of such Act if introduced
in interstate commerce except to the extent due to components
or materials manufactured or designed by ELAN (which components and material
have been properly used and applied in accordance with ELAN's specifications
or other written instructions or labels) or due to the negligence or wilful
misconduct of ELAN.
4. JV SUB is each fully cognisant of all applicable statutes, ordinances and
regulations of the United States of America with respect to the manufacture
of the PRODUCTS including, but not limited to, the U.S. Federal Food, Drug
and Cosmetic Act and regulations thereunder and cGP. JV SUB shall manufacture
or procure the manufacture the PRODUCTS in conformity with the
REGULATORY APPROVALS and where applicable the Drug Master File and in a
manner which fully complies with all United States of America and foreign
statutes, ordinances, regulations and practices.
5. ELAN shall indemnify, defend and hold harmless JV SUB and its officers,
directors, employees and agents from all actions, losses, claims, demands,
damages, costs and liabilities (including reasonable attorneys' fees) due to
third party claims to which JV SUB is or may become subject insofar as they
arise out of or are alleged or claimed to arise out of (i) any
breach by ELAN of any of its obligations under this AGREEMENT, and (ii) any
breach of a representation or warranty of ELAN made in this AGREEMENT and
(iii) any activities conducted by ELAN in connection with the PROJECT, except
to the extent due to the negligence or wilful misconduct of JV SUB.
6. JV SUB shall indemnify, defend and hold harmless ELAN and its officers,
directors, employees and agents from all actions, losses, claims, demands,
damages, costs and liabilities (including reasonable attorneys' fees) due to
third party claims to which ELAN is or may become subject insofar as they
arise out of or are alleged or claimed to arise out of (i) any
breach by JV SUB of any of its obligations under the AGREEMENT, (ii) any breach
of any representation or warranty of JV SUB made in this AGREEMENT, and (iii)
any activities conducted by JV SUB in connection with the PROJECT, except to
the extent due to the negligence or wilful misconduct of ELAN.
7. JV SUB shall indemnify, defend and hold harmless ELAN and its officers,
directors, employees and agents from all actions, losses, claims, demands,
damages, costs and liabilities (including reasonable attorneys' fees) due to
third party claims to which ELAN is or may become subject insofar as they arise
out of or are alleged or claimed to arise out of activities
conducted by JV SUB in the development, manufacture, transport, packaging,
storage, handling, distribution, promotion, marketing, offer for sale or sale
of the PRODUCT, that was caused by the negligence or wrongful acts or omissions
on the part of JV SUB.
8. ELAN represents and warrants that the manufacture, use, offer for sale, or
sale of the devices and methods exclusively disclosed in either the ELAN PATENT
RIGHTS or the application of the ELAN KNOW-HOW as documented in the transfer of
information to JV SUB as of the EFFECTIVE DATE does not infringe any patent
owned by a third party in the TERRITORY.
9. As a condition of obtaining an indemnity in the circumstances set out above
or elsewhere in the AGREEMENT, the Party seeking an indemnity shall:
9.1. fully and promptly notify the other Party of any claim or proceeding, or
threatened claim or proceeding;
9.2. permit the indemnifying Party to take full care and control of such claim
or proceeding;
9.3. reasonably assist in the investigation and defence of such claim or
proceeding;
9.4. not compromise or otherwise settle any such claim or proceeding without
the prior written consent of the other Party, which consent shall not be
unreasonably withheld; and
9.5. take all reasonable steps to mitigate any loss or liability in respect
of any such claim or proceeding.
10. Notwithstanding anything to the contrary in this AGREEMENT, ELAN and JV
SUB shall not be liable to the other for any consequential or incidental loss
or damage (whether for loss of profit or otherwise) by reason of any
representation or warranty, condition or other term or any duty of
common law, or under the express or implied terms of this AGREEMENT, and
whether occasioned by the negligence of the respective Parties, their employees
or agents or otherwise.
ARTICLE VII: PROJECT TEAM
1. The Parties have agreed to establish a PROJECT TEAM which shall consist
of a chief representative from each Party together with such additional
business and development personnel from each Party who are deemed necessary to
accomplish the work of the PROJECT. Unless both Parties agree otherwise,
commencing on the EFFECTIVE DATE, the PROJECT TEAM shall meet at least once
each calendar quarter, whether in person or by video conference; provided that
the PROJECT TEAM shall meet face to face at least once in every calendar year.
The PROJECT TEAM shall meet alternatively at the offices of ELAN and JV SUB
or as otherwise agreed by the Parties. [CONFIDENTIAL PORTION OMITTED].
2. At and between meetings of the PROJECT TEAM each Party shall keep the other
fully and regularly informed as to its progress with its respective obligations.
In addition, ELAN and JV SUB will both furnish a quarterly project update in
relation to the research development, regulatory and clinical work being
conducted in relation to the PRODUCT to designated personnel of the Parties.
3. The PROJECT TEAM shall review the manufacturing costs and other costs as
well as the regulatory and commercialisation strategy for the PRODUCT on an
ongoing basis. The PROJECT TEAM may suggest alternative strategies and attempt
to resolve any conflicts or differences of opinion between the Parties as to
how to proceed.
4. The PROJECT TEAM shall not be empowered to alter the terms of this
AGREEMENT. The PROJECT TEAM shall continue to function and meet both prior
to and for a period of one year after the launch of the PRODUCT in the first
MAJOR MARKET, or for such additional period as may be agreed.
5. The PROJECT TEAM may suggest alternative strategies and shall attempt to
resolve any conflicts or differences of opinion between the Parties as to how
to proceed. Any matter as to which the PROJECT TEAM is unable to reach
agreement may be submitted by either Party to binding arbitration for final
resolution pursuant to Article X Paragraph 14, or as otherwise agreed, except
with respect to matters for which JV SUB has authority to make final decisions.
ARTICLE VIII PATENTS
[CONFIDENTIAL PORTION OMITTED]
1. [CONFIDENTIAL PORTION OMITTED]
[CONFIDENTIAL PORTION OMITTED]
2. [CONFIDENTIAL PORTION OMITTED].
2.1. Both Parties shall timely inform the other in writing of any improvement
or development made by such Party relating, respectively, to the ELAN GLUCOSE
MONITOR TECHNOLOGY, the JV SUB KNOW-HOW, and/or the JOINT IMPROVEMENTS so that
any patent protection that may be available for any such improvement or
development is not compromised.
2.2. ELAN shall prepare, prosecute and maintain all initially licensed patent
applications and issued patents as set forth in APPENDIX B, and all
improvements created or developed solely by employees of ELAN relating to the
FIELD ("ELAN IMPROVEMENTS") made pursuant to the AGREEMENT or otherwise.
With respect to the ELAN IMPROVEMENTS, ELAN shall have the right to apply for
patent protection in its own name and at its own expense. Should it however
be doubtful whether a patent may be obtained, then ELAN may at its sole
discretion decide not to apply for a patent in one or more countries of the
TERRITORY. If such a patent is obtained, such a patent shall constitute ELAN
PATENT RIGHTS and JV SUB shall have for the duration of this AGREEMENT a right
thereunder to have manufactured pursuant to the terms of this AGREEMENT, and
to prepare, use and sell the PRODUCT as specified in Article II Paragraph 1.
ELAN shall keep JV SUB fully informed as to the status of such patent matters
relating to the ELAN PATENT RIGHTS. With respect to the ELAN IMPROVEMENTS,
ELAN shall timely apprise JV SUB of the status of any such prosecution and,
in the event ELAN shall decide not to seek patent protection for any ELAN
IMPROVEMENTS and such ELAN IMPROVEMENTS are not otherwise encumbered by
licences to one or more third parties (it being agreed that ELAN shall use
commercially reasonable efforts to exclude or where applicable to minimise
the extent of any such encumbrances), JV SUB shall have the option to take
responsibility for such prosecution and/or maintenance.
2.3. JV SUB shall prepare, prosecute and maintain all patents applications and
issued patents relating to all (I) JV SUB KNOW-HOW and (II) JOINT IMPROVEMENTS
that relate to the FIELD. With respect to JV SUB KNOW-HOW, JV SUB shall timely
apprise ELAN of the status of any such prosecution and, in the event JV SUB
shall decide not to seek patent protection for any JV SUB KNOW-HOW, ELAN shall
have the option to take control of such prosecution. In the event that ELAN
shall determine, in good faith, that any JOINT IMPROVEMENT predominantly
relates to an area other than the FIELD, ELAN shall have the option to take
control of the preparation, prosecution and maintenance of patent
protection directed to such JOINT IMPROVEMENTS. In the event that ELAN shall
exercise such option, ELAN shall have due regard to JV SUB's wishes regarding
the patent prosecution strategy for such JOINT IMPROVEMENTS. In the event that
ELAN does not exercise such right, JV SUB shall have the right to take
responsibility for the preparation, prosecution and maintenance of patent
protection directed to such JOINT IMPROVEMENTS. In the event that any
JOINT IMPROVEMENT predominantly relates to the FIELD but also relates to an
area other than the FIELD, JV SUB shall have due regard to ELAN's wishes as
regards the patent prosecution strategy for such JOINT IMPROVEMENTS.
[CONFIDENTIAL PORTION OMITTED]
3. [CONFIDENTIAL PORTION OMITTED].
4. [CONFIDENTIAL PORTION OMITTED].
[CONFIDENTIAL PORTION OMITTED].
5.1.1. [CONFIDENTIAL PORTION OMITTED].
5.1.2. [CONFIDENTIAL PORTION OMITTED].
5.1.3. [CONFIDENTIAL PORTION OMITTED].
5.1.4. [CONFIDENTIAL PORTION OMITTED].
5.2. [CONFIDENTIAL PORTION OMITTED].
6. [CONFIDENTIAL PORTION OMITTED].
ARTICLE IX: TERM AND TERMINATION
This AGREEMENT is concluded for a period commencing as of the date of this
AGREEMENT and shall expire [CONFIDENTIAL PORTION OMITTED]
starting from the EFFECTIVE DATE, or on a country by country basis for the
[CONFIDENTIAL PORTION OMITTED] included in the ELAN PATENT RIGHTS or the
JOINT IMPROVEMENTS, whichever is longer ("the TERM").
2. In addition to the rights of early or premature termination provided for
elsewhere in this AGREEMENT, in the event that any of the terms or provisions
hereof are incurably breached by either Party, the non-breaching Party may
immediately terminate this AGREEMENT by written notice. An incurable breach
shall be committed when either Party is dissolved, liquidated, discontinued,
becomes insolvent, or when any proceeding is filed or commenced by either
Party under bankruptcy, insolvency or debtor relief laws (and not dismissed
within ninety (90) days). Subject to the other provisions of this AGREEMENT,
in the event of any other material breach, the non-breaching Party may
terminate this AGREEMENT by the giving of written notice to the breaching
Party that this AGREEMENT will terminate on the ninetieth (90th) day from
notice unless cure is sooner effected. If the breaching Party has proposed a
course of action to rectify the breach and is acting in good faith to rectify
same but has not cured the breach by the ninetieth (90th) day, the said
period shall be extended by such period as is reasonably necessary to permit
the breach to be rectified. In the event that the breaching Party disputes
the validity of the right of the non-breaching Party to terminate the
AGREEMENT pursuant to this Paragraph, either Party may refer the dispute to
an arbitrator pursuant to the provisions of Article X Paragraph 14. Pending
the determination of the arbitrator, neither Party may regard the AGREEMENT
as having been terminated and in particular shall not allege or claim to any
third party that the AGREEMENT has been terminated pursuant to this Paragraph.
3. Upon termination of the AGREEMENT:
3.1. any sums that were due from JV SUB to ELAN prior to the exercise of the
right to terminate this AGREEMENT, shall be paid in full within sixty (60) days
of termination of this AGREEMENT;
3.2. all confidentiality provisions set out in this AGREEMENT shall remain in
full force and effect for a period of [CONFIDENTIAL PORTION OMITTED];
3.3. all representations and warranties shall insofar are appropriate remain in
full force and effect;
3.4. the rights of inspection and audit shall continue in force for the period
referred to in the relevant provisions of this AGREEMENT;
3.5. termination of this AGREEMENT for any reason shall not release any Party
hereto from any liability which, at the time of such termination, has already
accrued to the other Party or which is attributable to a period prior to such
termination nor preclude either Party from pursuing all rights and remedies it
may have hereunder or at law or in equity with respect to any breach of this
AGREEMENT;
3.6. except as is necessary to enable ELAN to exercise the licenses granted by
JV SUB to ELAN pursuant to Article II Paragraph 8.3, Article II Paragraph 10.2.
and Article II Paragraph 11, JV SUB and ELAN shall promptly return to the other
Party all CONFIDENTIAL INFORMATION received from the other Party (except one
copy of which may be retained for archival purposes);
3.7. JV SUB and its SUBLICENSEES shall have an ongoing right to sell or
otherwise dispose of the stock of any PRODUCTS on hand as of the date of
termination of the AGREEMENT, which such sale shall be subject to Article IV
and the other applicable terms of this AGREEMENT. The foregoing provisions
of this Paragraph shall be subject to the provisions of such agreement or
agreements as ELAN and one or more SUBLICENSEES conclude pursuant to Article
II Paragraph 2.2;
3.8. in the event this AGREEMENT is terminated by ELAN pursuant to Article IX
Paragraph 2, the licences granted by ELAN to JV SUB shall terminate and ELAN
shall thenceforth be entitled to exploit the ELAN GLUCOSE MONITOR TECHNOLOGY,
the JV SUB PATENT RIGHTS, the JV SUB KNOW-HOW together with any JV SUB
IMPROVEMENTS, including the data, information, regulatory applications,
regulatory approvals, pricing and reimbursement approvals and the TRADEMARK
to enable ELAN to commercialise the PRODUCTS in which event the royalty
obligations set forth in Article II Paragraph 8.3. shall continue for the
term stated in that Paragraph; provided that the foregoing provisions shall
be subject to the provisions of Article II Paragraph 2.2. and any
agreements entered into pursuant to the said Paragraph; and in the event of
termination of this AGREEMENT, the licences granted by JV SUB to the JV SUB
PATENT RIGHTS and the JV SUB KNOW-HOW and the JOINT IMPROVEMENTS pursuant to
Article II Paragraph 8.3. and to the TRADEMARK pursuant to Article II
Paragraph 11 shall continue after the date of the termination of this
AGREEMENT until the [CONFIDENTIAL PORTION OMITTED] in the JV SUB PATENT
RIGHTS on a country by country basis, or [CONFIDENTIAL PORTION OMITTED]
after the EFFECTIVE DATE (whichever is later) and thereafter the licence
shall be fully paid up and irrevocable; and
3.9. Articles I, Article II Paragraphs 2.2, 8.3, 9, 10.2, 11, Article VI,
Article VIII Paragraphs 1, 5 and 6, Article IX and Article X shall survive
the termination or expiration of this AGREEMENT for any reason.
ARTICLE X: SUNDRY CLAUSES
Secrecy
1.1. Each of the Parties agrees, during the TERM, to hold in confidence and
not disclose CONFIDENTIAL INFORMATION to any third parties, except to the
extent required by applicable law or administrative or judicial process.
Each Party may make such disclosure to its directors, officers and agents and,
in the case of JV SUB, its potential and actual sublicensees and other parties
to whom such disclosure is appropriate to enable JV SUB to conduct its regular
business (each of whom shall be bound by JV SUB's customary confidential
disclosure agreements), who shall be informed of such confidentiality
obligation and for whose breach the disclosing Party shall be responsible.
1.2. Subject to the provisions of Paragraph 1.1, any information, whether
written or oral (oral information shall be reduced to writing within one month
by the Party giving the oral information and the written form shall be
furnished to the other Party) pertaining to the ELAN GLUCOSE MONITOR TECHNOLOGY
or the PRODUCTS that has been or will be communicated or delivered by ELAN to
JV SUB, and any information from time to time communicated or delivered by
JV SUB to ELAN, including, without limitation, trade secrets, business methods,
and cost, supplier, manufacturing and customer information, shall be treated
by JV SUB and ELAN, respectively, as CONFIDENTIAL INFORMATION, and shall
not be disclosed or revealed to any third party whatsoever or used in any
manner except as expressly provided for herein; provided, however, that such
CONFIDENTIAL INFORMATION shall not be subject to the restrictions and
prohibitions set forth in this section to the extent that such CONFIDENTIAL
INFORMATION:
1.2.1. is available to the public in public literature or otherwise, or after
disclosure by one Party to the other becomes public knowledge through no
default of the Party receiving such information; or
1.2.2. was known to the Party receiving such information prior to the receipt
of such information by such Party, whether received before or after the date
of this AGREEMENT; or
1.2.3. is obtained by the Party receiving such information from a third party
not subject to a requirement of confidentiality with respect to such
information; or
1.2.4. is required to be disclosed pursuant to: (A) any order of a court having
jurisdiction and power to order such information to be released or made public;
or (B) other requirement of law; provided that if the receiving Party becomes
legally required to disclose any CONFIDENTIAL INFORMATION, the receiving Party
shall give the disclosing Party prompt notice of such fact so that the
disclosing Party may obtain a protective order or other appropriate remedy
concerning any such disclosure.
The receiving Party shall fully cooperate with the disclosing Party in
connection with the disclosing Party's efforts to obtain any such order or
other remedy. If any such order or other remedy does not fully preclude
disclosure, the receiving Party shall make such disclosure only
to the extent that such disclosure is legally required; or
1.2.5. is independently developed by or for the Party by persons not having
access to the CONFIDENTIAL INFORMATION of the other Party.
1.3. Each Party shall take all such precautions as it normally takes with its
own CONFIDENTIAL INFORMATION to prevent any improper disclosure of such
CONFIDENTIAL INFORMATION to any third party; provided, however, that such
CONFIDENTIAL INFORMATION may be disclosed within the limits required to obtain
any authorisation from the FDA or any other REGULATORY AUTHORITY or, with the
prior written consent of the other Party, which shall not be unreasonably
withheld or delayed, or as may otherwise be required in connection with the
purposes of this AGREEMENT.
1.4. JV SUB agrees that it will not use, directly or indirectly, the ELAN
GLUCOSE MONITOR TECHNOLOGY, or other CONFIDENTIAL INFORMATION disclosed to JV
SUB or obtained from ELAN pursuant to this AGREEMENT, other than as expressly
provided herein. ELAN agrees that it will not use, directly or indirectly, any
JV SUB KNOW-HOW, JV SUB PATENT RIGHTS, or other CONFIDENTIAL INFORMATION
disclosed to ELAN or obtained from JV SUB pursuant to this AGREEMENT, other
than as expressly provided herein.
1.5. The Parties shall not (a) disclose to any person or entity, publicly or
privately, this AGREEMENT or the substance of the transactions contemplated
hereby without the prior written consent of the other Party; provided, that
the foregoing covenant shall not be applicable to the extent required by
applicable law or judicial or administrative process or periodic SEC reports
filed by ELAN or BIOJECT in connection herewith, so long as the text
thereof shall have been provided to the non disclosing Party and such non
disclosing Party shall have approved the text thereof, which consent shall
not be unreasonably withheld or delayed.
2. Assignments/ Subcontracting
JV SUB shall not be permitted to assign any of its rights under the AGREEMENT
without the prior written consent of ELAN, which consent will not be
unreasonably withheld or delayed; provided, that such reasonableness standard
shall not apply in the case of a proposed assignment or sublicense to any of
the entities listed on the LISTED COMPANIES. ELAN may not assign to an
unaffiliated third party (other than by operation of law in the event of an
acquisition of ELAN, or a merger or similar transaction) its rights under this
AGREEMENT without the prior written consent of JV SUB, which may be withheld
in JV SUB's sole discretion. ELAN may assign all or part of its right and
interest to an AFFILIATE without the prior written consent of JV SUB.
3. Certain changes of Control.
In the event that JV SUB (or an interest therein in excess of [CONFIDENTIAL
PORTION OMITTED] of the fully-diluted equity) is acquired (by merger, sale
of assets or stock or otherwise) by (a) any of the LISTED COMPANIES or
(b) any other entity to which ELAN does not consent, which consent shall not
be unreasonably withheld or delayed, such reasonableness to be determined by
reference to JV SUB's and/or its controlling persons' intention to continue
diligent development and commercialisation of the Products, at the option of
ELAN, the AGREEMENT shall be immediately terminated, without any further
liability on the part of ELAN to JV SUB; provided that in such event the
provisions of Article II Paragraph 8.3. and Article IX Paragraph 3.8.
shall apply.
4. Parties bound
This AGREEMENT shall be binding upon and enure for the benefit of Parties
hereto, their successors and permitted assigns.
5. Severability
If any provision in this AGREEMENT is agreed by the Parties to be, or is deemed
to be, or becomes invalid, illegal, void or unenforceable under any law that is
applicable hereto, (i) such provision will be deemed amended to conform to
applicable laws so as to be valid and enforceable or, if it cannot be so
amended without materially altering the intention of the Parties, it will be
deleted, with effect from the date of such agreement or such earlier date as
the Parties may agree, and (ii) the validity, legality and enforceability of
the remaining provisions of this AGREEMENT shall not be impaired or affected
in any way.
6. Force Majeure
Neither Party to this AGREEMENT shall be liable for delay in the performance of
any of its obligations hereunder if such delay results from causes beyond its
reasonable control, including, without limitation, acts of God, fires, strikes,
acts of war, or intervention of a Government Authority, non availability of raw
materials, but any such delay or failure shall be remedied by such Party as
soon as practicable.
7. Relationship of the Parties
Nothing contained in this AGREEMENT is intended or is to be construed to
constitute ELAN and JV SUB as partners or joint venturers or either Party as an
employee of the other. Neither Party hereto shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of the other Party or to bind the other Party to any contract, agreement
or undertaking with any third party.
8. Amendments
No amendment, modification or addition hereto shall be effective or binding on
either Party unless set forth in writing and executed by a duly authorised
representative of both Parties.
9. Waiver
No waiver of any right under this AGREEMENT shall be deemed effective unless
contained in a written document signed by the Party charged with such waiver,
and no waiver of any breach or failure to perform shall be deemed to be a
waiver of any future breach or failure to perform or of any other right
arising under this AGREEMENT.
10. Headings
The section headings contained in this AGREEMENT are included for convenience
only and form no part of the agreement between the Parties. Save as otherwise
provided herein, references to articles, paragraphs, clauses and appendices
are to those contained in this AGREEMENT.
11. No effect on other agreements
No provision of this AGREEMENT shall be construed so as to negate, modify or
affect in any way the provisions of any other agreement between the Parties
unless specifically referred to, and solely to the extent provided, in any
such other agreement.
12. Applicable Law
This AGREEMENT (a) shall be governed by and construed in accordance with the
laws of the State of New York, without regard to principles of conflicts of
laws.
13. Notice
13.1. Any notice to be given under this AGREEMENT shall be sent in writing in
English by registered airmail or telefaxed to:
- - ELAN at
Elan Corporation, plc.
Lincoln Place,
Lincoln House,
Dublin 2
Ireland.
Attention: President, Elan Pharmaceutical Technologies, a division of ELAN
Corporation plc
Telephone: 353 1 709 4000
Telefax : 353 1 6624960
- - JV SUB at
Bioject JV Subsidiary Inc.
7620 S.W. Bridgeport Road,
Portland,
Oregon 97224,
United States of America.
Attention: President and Chief Executive Officer
Telephone: 1 503-639-7221
Telefax : 1 503-620-6431
or to such other address(es) and telefax numbers as may from time to time be
notified by either Party to the other hereunder.
13.2. Any notice sent by mail shall be deemed to have been delivered within
seven (7) working days after despatch and any notice sent by telefax shall be
deemed to have been delivered within twenty four (24) hours of the time of the
despatch. Notice of change of address shall be effective upon receipt;
provided that such date of receipt must be a business day for the Party to
whom the notice is delivered.
14. Arbitration
Should the Parties fail to reach agreement with respect to a dispute or
difference (other than as to a question relating to patent validity or as to
a matter left to the discretion of a Party hereunder) between the Parties
arising out of or in connection with this AGREEMENT, then the dispute or
difference will be determined by arbitration in New York in accordance with
the Non-Administered Arbitration Rules & Commentary (Amended 1993) of the CPR
Institute for Dispute Resolution by one independent and impartial arbitrator
who shall have had both training and experience as an arbitrator of general
corporate and commercial matters, or depending on the nature of the dispute
have experience of pharmaceutical device development and marketing (including
clinical development and regulatory affairs) or be an independent patent
attorney as the case may be. If the Parties to this AGREEMENT cannot agree on
the identity of the arbitrator, then the arbitrator will be selected by the
President of the CPR Institute for Dispute Resolution in accordance with the
criteria set forth in the preceding sentence. The arbitrator may decide any
issue as to whether, or as to the extent to which, any dispute is subject to
the arbitration and other dispute resolution provisions in this
AGREEMENT. The arbitrator must base the award on the provisions of this
AGREEMENT and must render the award in a writing which must include an
explanation of the reasons for such award. Any arbitration pursuant to this
section will be governed by the substantive laws of the State of New York
applicable to contracts made and to be performed in that state,
without regard to conflicts of law rules, and by the arbitration law of the
Federal Arbitration Act, and judgement upon the award rendered by the
arbitrator may be entered by any court having jurisdiction thereof. The
statute of limitations of the State of New York applicable to the
commencement of a lawsuit will apply to the commencement of an arbitration
under this section, except that no defences will be available based upon the
passage of time during any active negotiation between the Parties in an
attempt to resolve the dispute without arbitration. All fees, costs and
expenses of the arbitrator, and all other costs and expenses of the
arbitration, will be shared equally by the Parties to this AGREEMENT unless
such Parties agree otherwise or unless the arbitrator in the award assesses
such costs and expenses against one of such Parties or allocates such costs
and expenses other than equally between such Parties. Each Party to this
AGREEMENT acknowledges receipt of a copy of the Non-Administered Arbitration
Rules & Commentary (Amended 1993) of the CPR Institute for Dispute
Resolution. [CONFIDENTIAL PORTION OMITTED].
15. Withholding
Any income or other taxes which JV SUB is required by law to pay or withhold on
behalf of ELAN with respect to royalties and any other moneys payable to ELAN
under this AGREEMENT shall be deducted from the amount of such royalties and
moneys due. JV SUB shall furnish ELAN with proof of such payments. Any such
tax required to be paid or withheld shall be an expense of and borne solely by
ELAN. JV SUB shall promptly provide ELAN with a certificate or other
documentary evidence to enable ELAN to support a claim for a refund or a
foreign tax credit with respect to any such tax so withheld or deducted by JV
SUB. Both Parties will reasonably cooperate in completing and filing
documents required under the provisions of any applicable tax treaty or under
any other applicable law, in order to enable JV SUB to make such payments to
ELAN without any deduction or withholding.
16. Entire Agreement
This AGREEMENT including its Appendices sets forth the entire agreement and
understanding of the Parties with respect to the subject matter hereof, and
supersedes all prior discussions, agreements and writings in relating thereto,
including the letter of agreement of 30th September 1997.
17. Counterparts
This AGREEMENT may be executed in two counterparts, each of which shall be
deemed an original and which together shall constitute one instrument.
IN WITNESS THEREOF the Parties hereto have executed this AGREEMENT in
duplicate.
Executed by JV SUB on 15 October, 1997
By :/s/ James C. O'Shea
Name: James C. O'Shea
Title: President
Executed by ELAN on 15 October, 1997
By:/s/ Thomas G. Lynch
Name: Thomas G. Lynch
Title: Director
APPENDIX A
Part I
ELAN PATENT RIGHTS
(where the TERRITORY is the United States of America, Canada and Mexico)
[CONFIDENTIAL PORTION OMITTED]
COUNTRY/
OUR DOCKET NO. APPLICATION NO. FILING DATE PATENT NUMBER ISSUE DATE
[CONFIDENTIAL PORTION OMITTED]
[CONFIDENTIAL PORTION OMITTED]
COUNTRY/
OUR DOCKET NO. APPLICATION NO. FILING DATE PATENT NUMBER ISSUE DATE
[CONFIDENTIAL PORTION OMITTED]
APPENDIX A
Part II
ELAN PATENT RIGHTS
(where the TERRITORY is world-wide)
[CONFIDENTIAL PORTION OMITTED]
COUNTRY/
OUR DOCKET NO. APPLICATION NO. FILING DATE PATENT NUMBER ISSUE DATE
[CONFIDENTIAL PORTION OMITTED]
[CONFIDENTIAL PORTION OMITTED]
COUNTRY/
OUR DOCKET NO. APPLICATION NO. FILING DATE PATENT NUMBER ISSUE DATE
[CONFIDENTIAL PORTION OMITTED]
APPENDIX B
LISTED COMPANIES
[CONFIDENTIAL PORTION OMITTED]
EXHIBIT 10.41
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of October 15, 1997, between Bioject
Medical Technologies Inc., an Oregon corporation (the "Company"), and Elan
International Services, Ltd., a Bermuda corporation ("EIS).
R E C I T A L S:
A. The Company desires to issue and sell to EIS and EIS desires to purchase
from the Company, on the Closing Date (as defined below), as provided herein,
a promissory note in the original principal amount of $12,015,000, in the
form attached hereto as Exhibit A (the "Promissory Note"), for aggregate
consideration of $12,015,000 to be paid in cash by EIS to the Company on the
Closing Date.
B. The Company desires to issue and sell to EIS, and EIS desires to purchase
from the Company, (i) 2,727,273 shares of the Company's common stock, without
par value (the "Common Stock"), and (ii) a warrant to acquire 1,750,000 shares
(subject to adjustment) of Common Stock, in the form attached hereto as
Exhibit B (the "Warrant"), for aggregate consideration of $3,000,000 to be
paid in cash by EIS to the Company on the Closing Date.
C. In the event that Stockholder Approval (as defined herein) is obtained,
the Promissory Note shall be exchanged by EIS for certain shares of Series A
Convertible Preferred Stock (the "Series A Preferred Stock") and Series B
Convertible Preferred Stock (the "Series B Preferred Stock"; together with the
Series A Preferred Stock and the Series C Preferred Stock (as defined below),
the "Preferred Stock"; together with the Common Stock and the Warrant, the
"Securities"), as provided herein, which shall be issued to EIS pursuant to
the Certificate of Designations in the form attached hereto as Exhibit C (the
"Certificate of Designations").
D. In the event that the Stockholder Approval is obtained, EIS has agreed
that for a period of 30 months thereafter EIS may, at the Company's option
(but subject to the conditions contained herein), be required to fund up to
$4,000,000 to the Company to purchase additional shares of preferred stock
(the "Series C Preferred Stock").
E. The Company has previously caused to be formed Bioject JV Subsidiary Inc.,
an Oregon corporation ("Newco"), for the purpose of developing and
commercializing certain technologies relating to glucose monitoring. The
initial stockholders in Newco shall be the Company and EIS. The parties
intend, as provided herein, that the proceeds of the issuance of Promissory
Note shall be applied by the Company solely to fund the Company's initial
investment in Newco, as provided herein.
F. The Company and EIS are executing and delivering on the date hereof a
Registration Rights Agreement in the form attached hereto as Exhibit D (the
"Registration Rights Agreement"; together with this Agreement, the Securities,
and each other document or instrument executed and delivered in connection
with the transactions contemplated hereby, the "Transaction Documents") in
respect of the initial purchase of Common Stock and the Common Stock
underlying the Securities and any other Common Stock that may at any time be
acquired or owned by EIS or its affiliates.
A G R E E M E N T:
The parties agree as follows:
SECTION 1. Closings. (a) Time and Place. The closing of the transactions
contemplated hereby (the "Closing") shall occur on the date hereof (the
"Closing Date"), at the offices of counsel to EIS or such other place as the
parties may agree.
(b) Issuance of Securities. At the Closing, (x) the Company shall issue and
sell to EIS, and EIS shall purchase from the Company the Promissory Note, upon
the terms and subject to the conditions set forth herein, for an aggregate
purchase price of $12,015,000, and (y) the Company shall issue and sell to
EIS, and EIS shall purchase from the Company (i) 2,727,273 shares of Common
Stock (the "Initial Common Stock") and the Warrant, for an aggregate purchase
price of $3,000,000 (the "Closing Consideration"). Of such Closing
Consideration, $.001 per share of Common Stock issueable upon exercise of the
Warrant shall be deemed allocated toward the purchase price of the Warrant.
(c) Delivery. At the Closing, EIS shall pay the purchase price for the
Promissory Note, Initial Common Stock and the Warrant in cash by wire transfer
to an account or accounts designated by the Company and the parties hereto
shall execute and deliver to each other, as applicable: (i) the Promissory
Note; (ii) a certificate or certificates for the shares of the Initial Common
Stock; (iii) the Warrant; and (iv) certificates as to the incumbency of the
officers executing this Agreement and each of the other documents or
instruments executed in connection herewith. In addition, at the Closing,
the Company shall cause to be delivered to EIS an opinion of counsel in form
attached hereto as Exhibit E.
(d) Additional Closings. (i) In the event that Stockholder Approval shall
have been obtained on or prior to February 1, 1998, for a period of 30 months
after the date thereof, upon at least 30 days notice, the Company shall be
entitled from time to time, subject to the conditions herein, to require EIS
to purchase all or part of the Series C Preferred Stock. The Series C
Preferred Stock shall be redeemable and convertible in the same manner and
subject to the same other conditions as the Series B Preferred Stock; provided
that the issuance and conversion prices of each share of Series C Preferred
Stock shall be equal to ten times the average of the last traded price for the
shares of Common Stock as reported by the Nasdaq Stock Market for 10
consecutive trading days ending on the day that is two business days prior to
the date of such issuance . In the event that Stockholder Approval has not
been obtained on or prior to February 1, 1998, EIS, in its sole discretion,
shall be entitled to deem such lack of approval as a rejection of the Proposal
(as defined in Section 4(f)) by the Company's stockholders.
(ii) It shall be a condition to EIS's obligation to purchase any Series C
Preferred Stock that (A) each of the representations and warranties set forth
in Section 2(a), (b)(iii), (c), (d) and (l) shall be true and correct in all
material respects as if the date hereof were the proposed funding date
thereof; provided, that any reference to the Quarterly Report shall refer to
the most recent quarterly report on Form 10-Q and/or any report filed pursuant
to Section 13 of the Securities Exchange Act of 1934 (the "Exchange Act"),
required to be filed by the Company under applicable law immediately prior to
such funding date and SEC Filings shall refer to all filings required to be
made by the Company under applicable law on or prior to such date, (B) there
shall be no default or breach in any material respect by the Company of a
material obligation under any of the Transaction Documents or any other
agreement between the Company or any of its affiliates, on the one hand, and
EIS or any of their affiliates, on the other hand, and (C) the Company shall
have executed and delivered to EIS each document or instrument that shall be
customary and appropriate for such transaction, including duly executed and
delivered counterparts of certificates for the Series C Preferred Stock.
(e) Exemption from Registration. The Securities will be issued under an
exemption or exemptions from registration under the Securities Act of 1933, as
amended; accordingly, the certificates evidencing the Securities shall, upon
issuance, contain the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT UNDER ANY CIRCUMSTANCES BE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION
OF COUNSEL SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS.
(f) Registration Rights Agreement. On the date hereof, the Company, and EIS
are each executing and delivering the Registration Rights Agreement, covering
the shares of Common Stock issuable hereunder or upon conversion, exercise or
exchange of any of the Securities or any other shares of Common Stock
hereafter acquired by EIS or its affiliates from the Company.
SECTION 2. Representations and Warranties of the Company. (a) Organization.
The Company is duly organized, validly existing and in good standing under the
laws of the State of Oregon and has all requisite corporate power and
authority to own and lease its properties, to carry on its business as
presently conducted and as proposed to be conducted and to consummate the
transactions contemplated hereby. The Company is qualified and in good
standing to do business in jurisdictions set forth on Schedule 2(a), which
constitute all of the jurisdictions in which the nature of the business
conducted or the property owned by it requires such qualification, except
where the failure to so qualify would not have a material adverse effect on
the business, prospects, properties or condition (financial or otherwise) of
the Company (a "Material Adverse Effect").
(b) Capitalization. (i) The authorized and number of outstanding shares of
capital stock of the Company as of September 30, 1997 is 22,475,688.
(ii) Except as set forth in Schedule 2(b) and in the Company's quarterly
report on Form 10-Q filed with the Securities and exchange Commission on
August 14, 1997 (the "Quarterly Report"), as of the Closing there are no
options, warrants or other rights outstanding to purchase or otherwise
acquire, or any securities convertible into, any of the Company's authorized
capital stock. Other than as set forth in this Agreement and as described in
Schedule 2(b), there are no agreements, arrangements or understandings
concerning the voting, acquisition or disposition of any of the Company's
outstanding securities to which the Company is a party or of which it is
otherwise aware, and, other than as set forth in Schedule 2(b) or in the
Registration Rights Agreement, there are no agreements to register any of the
Company's outstanding securities under the U.S. federal securities acts.
(iii) All of the outstanding shares of capital stock of the Company have been
issued in accordance with applicable state and federal laws and regulations
governing the sale and purchase of securities, all of such shares of have duly
and validly issued and are fully paid and non-assessable, and none of such
shares carries preemptive or similar rights.
(c) Authorization of Transaction Documents. The Company has full corporate
power and authority to execute and deliver this Agreement and each of the
other Transaction Documents, and to perform its obligations hereunder and
thereunder. Except for Stockholder Approval the execution, delivery and
performance by the Company of the Transaction Documents (including the
issuance and sale of the Securities) have been authorized by all requisite
corporate actions by the Company; and the Transaction Documents (including the
issuance and sale of the Securities) have been duly executed and delivered by
the Company are the valid and binding obligations of the Company, enforceable
against each in accordance with their respective terms.
(d) No Violation. The execution, delivery and performance by the Company of
the Transaction Documents (including the issuance and sale of the Securities),
and compliance with the provisions thereof by the Company, will not (i)
violate any provision of applicable law, statute, rule or regulation
applicable to the Company or any ruling, writ, injunction, order, judgment or
decree of any court, arbitrator, administrative agency or other governmental
body applicable to the Company or any of their respective properties or assets
or (ii) conflict with or result in a breach of any of the terms, conditions or
provisions of, or constitute (with notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of, any Encumbrance (as defined below) upon
any of the properties or assets of the Company under its Articles of
Incorporation, as amended, its Certificate of Designations (in the form to be
filed as provided herein) or By-laws, or any material contract to which the
Company is a party, except where such violation, conflict or breach would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company (as used in connection to either of them, a "Material Adverse
Effect"). As used herein, "Encumbrance" shall mean any liens, charges,
encumbrances, equities, claims, options, proxies, pledges, security interests,
or other similar rights of any nature, except for such conflicts, breaches or
defaults which would not, individually or in the aggregate, have a Material
Adverse Effect.
(e) Approvals. Except as set forth on Schedule 2(e), no material permit,
authorization, consent or approval of or by, or any notification of or filing
with, any person or entity (governmental or otherwise) is required in
connection with the execution, delivery or performance of the Transaction
Documents (including the issuance and sale of the Securities) by the Company
or Newco. Except for the Stockholder Approval, there is no approval of the
Company's stockholders required under applicable laws in connection with the
execution and delivery the Transaction Documents or the consummation of the
transactions contemplated thereby, including the filing of the Certificate of
Designations and the issuance of the Securities.
(f) Filings, Taxes and Financial Statements. (i) The Company has filed its
annual report on Form 10-K for the year ended March 31, 1997, its related
proxy materials and its quarterly reports on Form 10-Q for the quarter ended
June 30, 1997 and the Quarterly Report (collectively, including all exhibits
and schedules required to be filed in connection therewith, the "SEC Filings")
with the Securities and Exchange Commission, the Nasdaq Stock Market and any
other required person or entity (governmental or otherwise) in a timely manner
and as otherwise required by applicable laws and regulations, including the
federal securities acts. The audited financial statements of the Company for
the fiscal year ended March 31, 1997 included in the SEC Filings (the "Audited
Financial Statements"), and the Company's unaudited balance sheet for the
period ending June 30, 1997, together with the accompanying statements of
operations and cash flows including the notes thereto (the "June Financial
Statements"; collectively, with the Audited Financial Statements, the
"Financial Statements") are accurate and complete in all material respects and
fairly present the financial condition of the Company as at the dates thereof
and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated
(except as may be otherwise indicated in such financial statements or the
notes thereto), subject, in the case of the June Financial Statements, to
normal year-end audit adjustments (which shall not be material in the
aggregate) and the absence of footnote disclosures.
(ii) The Company has filed in a timely manner all material federal, state,
local and foreign tax returns, reports and filings (collectively, "Returns"),
including income, franchise, property and other taxes, and has paid or accrued
the appropriate amounts reflected on such Returns. None of the Returns have
been audited or challenged, nor has the Company received any notice of
challenge nor have any of the amounts or other data included in the Returns
been challenged or reviewed by any governmental authority.
(iii) Except as listed in Schedule 2(f), which sets forth a true and accurate
list and description of any such plans maintained or sponsored by the Company
or to which the Company is required to make contributions, the Company does
not maintain, sponsor, is not required to make contributions to or otherwise
have any liability with respect to any pension, profit sharing, thrift or
other retirement plan, employee stock ownership plan, deferred compensation,
stock ownership, stock purchase, performance share, bonus or other incentive
plan, severance plan, health or group insurance plan, welfare plan, or other
similar plan, agreement, policy or understanding (whether written or oral),
whether or not such plan is intended to be qualified under Section 401(a) of
the Code, within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, which plan covers any employee or former
employee of the Company.
(g) Absence of Changes. Except as set forth on Schedule 2(g), since June 30,
1997, there has not been (a) any material adverse change in the business,
properties, condition (financial or otherwise), operations or prospects of the
Company; (b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties,
condition (financial or otherwise), operations or prospects of the Company;
(c) any declaration, setting aside or payment of any dividend or other
distribution or payment (whether in cash, stock or property) in respect of the
capital stock of the Company, or any redemption or other acquisition of such
stock by the Company; (d) any disposal or lapse of any trade secret,
invention, patent, trademark, trademark registration, service mark, service
mark registration, copyright, copyright registration, or any application
therefor or filing in respect thereof; (e) loss of the services of any of the
key officers or key employees of the Company; (f) any incurrence of or entry
into any liability, mortgage, lien, commitment or transaction, including
without limitation, any borrowing (or assumption or guarantee thereof) or
guarantee of a third party's obligations, or capital expenditure (or lease in
the nature of a conditional purchase of capital equipment) in excess of
$50,000; or (g) any material change by the Company in accounting methods or
principles or (h) any change in the assets, liabilities, condition (financial
or otherwise), results or operations or prospects of the Company from those
reflected on the Quarterly Report, except changes in the ordinary course of
business that have not, individually or in the aggregate, had a Material
Adverse Effect.
(h) No Liabilities. Except as set forth in the Quarterly Report or Schedule
2(h) attached hereto, neither the Company nor Newco nor any of their
respective subsidiaries has incurred or suffered any liability or obligation,
matured or unmatured, contingent or otherwise, except in the ordinary course
of business that have not, individually or in the aggregate, had a Material
Adverse Effect.
(i) Properties and Assets; Etc. (i) The Company owns all of its properties
and assets, including patents, patent applications, continuations,
continuations-in-part, extensions, trademarks and trademark applications,
know-how and other intellectual property, as reflected in the Financial
Statements, subject in each case, to no Encumbrances required to be disclosed
in the Financial Statements except as set forth therein. Except as set forth
on Schedule 2(i), (i) all of the Company's patents, trademarks, service marks,
trade names, and copyrights are owned by the Company free and clear of all
liens, claims and encumbrances and are valid and duly issued or existing; none
of the Company's rights in or use of such patents, trademarks, service marks,
trade names or copyrights has been or is currently being threatened to be,
challenged; to the best of the Company's knowledge, without making any inquiry
other than those, if any, routinely conducted by the Company in the ordinary
course of business, no current or currently planned product based upon the
Company's intellectual property would infringe any patent, trademark, service
mark, trade name or copyright of any other person or entity issued or pending
on the Closing Date if the Company were to distribute, sell or manufacture
such products; and the Company is not aware, after due inquiry, of any actual
or threatened claim by any person or entity alleging any infringement by the
Company of a patent, trademark, service mark, trade name or copyright
possessed by such Person; (ii) all of such patents, trademark registrations,
service mark registrations, trade name registrations and copyrights and
copyright registrations, whether foreign or domestic, have been duly issued
and have not been canceled, abandoned, or otherwise terminated; and (iii) all
of the Company's patent applications, trademark applications, service mark
applications, trade name applications and copyright applications have been
duly filed.
(ii) Each of the Contracts listed as an exhibit to the Company's Annual Report
on Form 10-K for the year ended March 31, 1997 is a legal and valid agreement
binding upon each of the parties thereto and is in full force and effect and,
to the best knowledge of the Company, there is no breach or default by any
party thereunder. Such Contracts constitute all material agreements,
arrangements or understandings required to be included in such annual Report
under Securities and Exchange Commission regulations promulgated in connection
therewith.
(iii) The Company has and maintains adequate and sufficient insurance,
including liability, casualty and products liability insurance, covering risks
associated with its business, properties and assets, including insurance that
is customary for companies similarly situated.
(iv) To the best of its knowledge, the Company, its business and properties
and assets are in compliance, in all material respects, with all applicable
laws and regulations, including without limitation, those relating to (a)
health, safety and employee relations, (ii) environmental matters, including
the discharge of any hazardous or potentially hazardous materials into the
environment, and (iii) the development, commercialization and sale of
pharmaceutical and biotechnology products, including all applicable
regulations of the U.S. Food and Drug Administration and comparable foreign
regulatory authorities.
(j) Legal Proceedings, etc. There is no legal, administrative, arbitration
or other action or proceeding or governmental investigation pending or , to
the best of the Company's knowledge threatened against the Company, or any
director, officer or employee of the Company, which is required to be
described in the Company's Quarterly Report on Form 10-Q and is not so
described. The Company is not in violation of or default under, any material
laws, judgments, injunctions, orders or decrees of any court, governmental
department, commission, agency, instrumentality or arbitrator applicable to
its business.
(k) Disclosure. The Company's Annual Report on Form 10-K for the year ended
March 31, 1997 and periodic reports subsequently filed under Section 13 of the
Exchange Act, and the representations and warranties set forth herein and the
Transaction Documents, when viewed collectively, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements contained herein and therein not misleading.
(l) Brokers or Finders. Other than as set forth on Schedule 2(l), the Company
has not retained any investment banker, broker or finder in connection with
the transactions contemplated by the Transaction Documents; and the Company
agrees to indemnify and hold EIS harmless against any liability, settlement or
expense arising out of, or in connection with, any claim related thereto.
SECTION 3. Representation and Warranties of EIS. EIS hereby represents and
warrants to the Company as follows:
(a) Organization. EIS is a corporation duly organized, validly existing and
in good standing under the laws of Bermuda and has all requisite corporate
power and authority to own and lease its properties, to carry on its business
as presently conducted and as proposed to be conducted and to consummate the
transactions contemplated hereby. EIS is qualified and in good standing to
do business in each jurisdiction in which the nature of the business conducted
or the property owned by it requires such qualification, except where the
failure to so qualify would not reasonably be expected to have a material
adverse effect on the business or condition (financial or otherwise) of EIS.
(b) Authorization of Agreement. EIS has full legal right, power and
authority to enter into this Agreement and purchase and accept the Note, and
perform its obligations hereunder, which have been duly authorized by all
requisite corporate action. This Agreement and the purchase of the Note are
the valid and binding obligations of EIS, enforceable against them in
accordance with their terms.
(c) No Conflicts. The execution, delivery and performance by EIS of this
Agreement, the purchase and acceptance of the Note and compliance with
provisions hereof by EIS, will not (i) violate any provisions of applicable
law, statute, rule or regulation applicable to EIS or any ruling, written,
injunction, order, judgment or decree of any court, arbitration,
administrative agency of other governmental body applicable to EIS of any of
its properties or assets or (ii) conflict with or result in any breach of any
of the terms, conditions or provisions of, or constitute (with notice or lapse
of time to both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any
Encumbrance upon any of the properties or assets of EIS under the Certificate
of Incorporation or By-laws of EIS or any material contract to which EIS is
party, except where such violation conflict or breach would not, individually
or in the aggregate, have a material adverse effect on EIS.
(d) Approvals. No permit, authorization, consents or approval of or by, or
any notification of or filing with, any person or entity (governmental or
otherwise) is required in connection with the execution, delivery or
performance of this Agreement or the Note (including the funding and
acceptance thereof) by EIS.
(e) Investment Representations. (i) EIS is sophisticated in transactions of
this type and capable of evaluating the merits and risks of the transactions
described herein and in the other Transaction Documents, and have the capacity
to protect their own interests. EIS has not been formed solely for the
purpose of entering into the transactions described herein and therein and is
acquiring the Securities for investment for its own account, not as a nominee
or agent, and not with the view to, or for sale in connection with, any
distribution of any part thereof; provided, that EIS shall be permitted to
convert or exchange such Securities and/or transfer them as permitted herein
and under applicable law. EIS has been afforded the opportunity to ask
questions of and information about the Company and its business and prospects,
from management and representatives of the Company, and have relied on its own
independent judgment in making a judgment about an investment in the
Securities.
(ii) Nothing contained in this Section 3(e) shall limit any of the Company's
representations or warranties or limit EIS's recourse in respect thereof.
(iii) Other than as set forth on Schedule 3(e)(iii), EIS have not retained any
investment banker, broker or finder in connection with the transactions
contemplated by the Transaction Documents; and EIS agree to indemnify and hold
the Company harmless against any liability, settlement or expense arising out
of, or in connection with, any claim related thereto.
SECTION 4. Covenants of the Company. (a) Non-disclosure. From and after the
date hereof, the Company shall not disclose to any person or entity (other
than its directors, officers and agents who need to know such information in
connection with the transactions described herein and the other Transaction
Documents (each of whom shall be informed of this confidentiality provision
and in respect of whose breaches the Company shall be responsible)) the
content of this Agreement or any of the other Transaction Documents or the
substance of the transactions described herein, without the prior written
consent of EIS (which consent shall not be unreasonably withheld or delayed),
except to the extent required by applicable laws or administrative or judicial
processor in respect of press releases and periodic reports prepared in good
faith by the Company; provided, that the Company shall provide EIS with a
reasonable opportunity to review and approve such releases or reports. This
Section 4 shall not be construed to prohibit disclosure of any information
which has not been previously determined to be confidential by EIS, or which
shall have become publicly disclosed (other than by breach of the Company's
obligations hereunder).
(b) Board of Directors. Coincident with Closing, the Company's board of
directors shall be expanded by one member, from seven to eight members, and EIS
shall be entitled to appoint a director to fill the vacancy so created (the
"EIS Director"), who shall be a duly elected director. From and after the
date hereof and for so long as EIS and/or their respective affiliates own
Securities that represent ownership of at least 5% (and 10% from and after
October 15, 2004) of the Common Stock, on a fully diluted basis the Company
shall use its best efforts to cause the EIS Director to be elected to the
Company's board of directors, by including the EIS Director in the management
slate of directors at each meeting of stockholders at which an election of
directors occurs. Appointment of the EIS Director shall be subject to the
consent of the Company, which shall not be unreasonably withheld or delayed,
and which shall be based upon regulatory and fitness of character
considerations.
(c) Fully-diluted Stock Ownership. Notwithstanding any other provision of
this Agreement, in the event that EIS shall have determined that at any time
it (together with its Affiliates, if applicable) holds or has the right to
receive Common Stock (or securities or rights, options or warrants
exercisable, exchangeable or convertible for or into Common Stock)
representing in the aggregate in excess of 19.9% of the Company's outstanding
Common Stock (assuming any such exercise, exchange or conversion, but not the
exercise, exchange or conversion of any other similar securities), EIS shall
have the right, in its sole discretion, rather than acquiring such securities
from the Company, to exchange such number of securities, as are necessary to
bring its holdings to below 19.9% of the voting securities of the Company, for
non-voting, liquidation preference equity securities of the Company (which
shall be reasonably satisfactory to the Company and EIS), which equity
securities shall be entitled to all of the other rights and benefits of the
Common Stock. In the event that EIS shall undertake to exercise such right,
EIS shall retain the additional right to exchange such new class of equity
security for Common Stock, in its discretion.
(d) Certain Prohibited Activities. (i) For such time that the Promissory
Note remains outstanding, the Company shall not, without EIS's written consent
(which consent will not be unreasonably withheld or delayed): (a) acquire or
dispose of any material asset or business, other than in the ordinary course
of business; (b) merge or consolidate with any other corporation or acquire
control of any other corporation or business entity; or (c) incur any
indebtedness or liens outside the ordinary course of business, which ordinary
course shall include equipment leases and working capital lines up to a
maximum of the lesser of $5 million and 50% of the Company's aggregate
consolidated accounts receiveable and inventory;
(ii) In the event that Stockholder Approval is obtained, and after the
redemption of the Promissory Note and issuance and sale of the Preferred Stock
has occurred, the restrictions referred to in item (a) of Section 4(d) above
shall continue, and the restrictions referred to in items (b) and (c) above
shall be of no further force or effect; provided that, they shall be replaced
by the following restriction: without the written consent of EIS (which
consent will not be unreasonably withheld or delayed) the Company shall not
incur any indebtedness in excess of $10 million aggregate principal amount
unless the Company can reasonably establish (based on prudent and customary
commercial practices and standards in the capital markets) that the Company
may incur such indebtedness from an institutional lender, venture capital firm
or reputable so-called "hedge" fund, on a prudent and reasonable basis, based
on the Company's then credit-worthiness, prospects, solvency and business
(each of item (a) and (b) of Section 5(e)(i) and this Section 5(e)(ii), as
applicable, a "Restricted Transaction"). Notwithstanding the foregoing, the
Company may incur working capital lines and equipment leases from unaffiliated
third parties in bona fide financing transactions in principal amounts up to
the lesser of $5 million and 50% of the Company's aggregate consolidated
accounts receivable and inventory.
(e) Stockholder Approval. The Company shall prepare a Proxy Statement, call a
Special Meeting of Stockholders to be held prior to February 1, 1998, and use
its best efforts (including, without limitation, subject to their fiduciary
duties as directors, the board of director affirmative recommendation that the
stockholders of the Company vote to approve issuance and sale of the Series A
and Series B Preferred Stock in exchange for the Promissory Note), all to the
fullest extent permitted and as required under applicable law, to obtain
thereat the approval (the "Stockholder Approval") of the proposal to issue and
sell the Series A and Series B Preferred Stock and to authorize the issuance
of the Series C Preferred Stock and amend the Company's Articles of
Incorporation in connection therewith in exchange for the Promissory Note
(the "Proposal"). In the event that the Stockholders' Approval shall not have
been obtained on or prior to February 1, 1998, EIS shall be entitled, in their
sole discretion and upon at least 30-days notice to the Company, to consider
such lack of approval as a rejection of the Proposal. The Company shall
provide a draft copy of such Proxy Statement to EIS at least five business
days prior to the anticipated date of filing with the SEC, and the filing of
the Proxy Statement shall be subject to EIS's approval thereof, which shall
not be unreasonably withheld or delayed.
(f) Use of Proceeds. The Company shall use the proceeds of the sale of the
Series C Preferred Stock, if any, solely for the purpose of meeting its
capitalization and funding requirements to Newco, described as Additional
Funding in the Bioject JV Subsidiary Inc. Subscription and Stockholder
Agreement dated as of the date hereof.
SECTION 5. Mutual Covenants of the Parties. (a) Exchange. In the event that
Stockholder Approval is obtained, EIS shall tender the Promissory Note to the
Company in exchange for the issuance to EIS of (i) that number of shares of
the Series A Preferred Stock equal to (a) $10 million plus accrued and unpaid
interest divided by (b) $15, and (ii) 134,333 shares of the Series B Preferred
Stock such tender and exchange to be completed within 10 business days of the
date of Stockholder Approval.
(b) Further Assurances. From and after the date hereof, each of the parties
hereto agree to do or cause to be done such further acts and things and
deliver or cause to be delivered to each other such additional assignments,
agreements, powers and instruments, as each may reasonably require or deem
advisable to carry into effect the purposes of the Transaction Documents or to
better to assure and confirm unto each other their respective rights, powers
and remedies hereunder and thereunder.
(c) Preferred Stock Early Redemption. In the event that the Company desires
to engage in a Restricted Transaction to which EIS has reasonably withheld its
consent (s provided herein), the Company shall have the right to redeem the
remaining outstanding Preferred Stock, by paying to EIS the amount of unpaid
dividends then accrued and unpaid, and issuing to EIS a warrant (the
"Contingent Warrant") in customary form and otherwise reasonably satisfactory
to EIS which shall entitle EIS to purchase that number of shares of Common
Stock (or securities or other property of its successor or acquirer, if any,
in accordance with the Anti-Dilution Adjustments) into which the Preferred
Stock would have been convertible had it not been redeemed under this
provision, at an aggregate price equal to the sum of the entire amount of the
Preferred Stock and an interest component on such sum of 9% per annum from
redemption until the date of exercise. The Contingent Warrant shall be
transferable in accordance with Section 16 hereof.
(d) Technology Collaboration. (i) Each of the parties hereto agree that
commencing with the first quarter of 1998, upon written request from the
Company, EIS shall cause to be invested up to $500,000 in the form of grants
to the Company in support of the development of the Company's existing needle-
free injection technologies (the "Technology Collaboration") in four equal,
quarterly (in arrears) payments of $125,000 each.
(ii) The first such technology referred to in Section 5(e)(i) shall be one or
more pre-filled ampule projects mutually acceptable to EIS and the Company;
and that other projects may be substituted on a mutually satisfactory basis if
it is determined by the Company that the initial projects have no practical
commercial potential.
(iii) All intellectual property and results of projects shall belong to the
Company; provided, that EIS shall have a right of first refusal, on then-
current market terms, to conduct further development or commercialization of
such intellectual property or results in conjunction with the Company, for the
period of one year following completion of work directly funded by the grants
contemplated herein. During such one-year period, the Company shall not take
any actions, including in concert with any third party, which would negatively
effect EIS's right.
(e) Standstill. EIS agrees that, for a period of three years from the date
hereof, unless (i) a party shall have been specifically invited in writing by
the Company or (ii) a party unaffiliated with EIS, without participation or
encouragement of EIS or any of its affiliates (as such term is defined under
the Securities Exchange Act of 1934 (the "1934 Act")), shall announce a tender
offer or solicit proxies with respect to an acquisition proposal which has not
been solicited by the Company's board of directors or attempts to control the
management or business or affairs of the Company or otherwise acquire more
than 10% of the Company's voting securities (outright or on an as converted
basis; without approval from the Company's Board of Directors), neither EIS
nor its affiliates shall in any manner, directly or indirectly, (a) effect or
seek, offer or propose to effect or participate in (publicly or otherwise) (i)
any acquisition of securities (or beneficial ownership thereof) or assets of
the Company or its subsidiaries, (ii) any tender or exchange offer, merger or
other business combination involving the Company or any of its subsidiaries,
(iii) any recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction with respect to the Company or its subsidiaries, or
(iv) any solicitation of proxies (as such terms are defined under the
regulations of the Securities and Exchange Commission) or consents to vote any
voting securities of the Company; (b) form, join or participate in a group (as
defined under the 1934 Act); (c) otherwise act to seek control or influence
the management, board of directors or policies of the Company, or (d) take any
action which may force the Company to make a public announcement regarding any
matters enumerated in (a) above.
SECTION 6. Entire Agreement. This Agreement and the other Transaction
Documents contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto.
SECTION 7. Survival and Indemnification. (a) Survival Period. The
representations and warranties of the Company contained herein shall survive
for a period of one year after the date hereof.
(b) Indemnification. In addition to all rights and remedies available to the
parties hereunder at law or in equity, the Company (in such capacity, an
"Indemnifying Party") shall indemnify EIS, and its respective affiliates, and
EIS' and its respective affiliates' stockholders, officers, directors,
employees, agents, representatives, successors and assigns (collectively, the
"Indemnified Person"), and save and hold EIS harmless from and against and pay
on behalf of or reimburse each such Indemnified Person, as and when incurred,
for any and all loss, liability, demand, claim, action, cause of action, cost,
damage, deficiency, tax, penalty, fine or expense, whether or not arising out
of any claims by or on behalf of such Indemnified Person or any third party,
including interest, penalties, reasonable attorneys' fees and expenses and all
amounts paid in investigation, defense or settlement of any of the foregoing
(collectively, "Losses"), that any such Indemnified Person may suffer, sustain
incur or become subject to, as a result of, in connection with, relating or
incidental to or by virtue of:
(i) any misrepresentation or breach of warranty on the part of the
Indemnifying Party under Section 2 of this Agreement; or
(ii) any nonfulfillment, default or breach of any covenant or agreement on the
part of the Indemnifying Party under Section 4 of this Agreement.
(c) Maximum Recovery. The maximum recovery of EIS under this Section 7
shall not exceed $15 million. No Indemnified Party shall assert any such
claim unless Losses in respect thereof incurred by any Indemnified Party, when
aggregated with all previous Losses hereunder, equal or exceed $250,000, and
the obligation of the Indemnifying Party to indemnify shall not apply to the
first $250,000 of losses to the Indemnified Person.
(d) Exception. Notwithstanding the foregoing, and subject to the following
sentence, upon judicial determination that is final and no longer appealable,
that the act or omission giving rise to the indemnification set forth above
resulted primarily out of or was based primarily upon the Indemnified Person's
negligence(unless such Indemnified Person's negligence was based upon the
Indemnified Persons reliance in good faith upon any of the representations,
warranties, covenants or promises made by the Indemnifying Party herein) the
Indemnifying Party shall not be responsible for any Losses sought to be
indemnified in connection therewith, and the Indemnifying Party shall be
entitled to recover from the Indemnified Persons all amounts previously paid
in full or partial satisfaction of such indemnity, together with all costs and
expenses (including reasonable attorneys fees) of the Indemnifying Party
reasonably incurred in connection with the Indemnified Party's claim for
indemnity, together with interest at the rate per annum publicly announced by
Morgan Guaranty Trust Company as its prime rate from the time of payment of
such amounts to the Indemnified Person until repayment to the Indemnifying
Party.
(e) Investigation. All indemnification rights hereunder shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby to the extent provided in Section 7(b) above,
irrespective of any investigation, inquiry or examination made for or on
behalf of, or any knowledge of the Indemnified Persons or the acceptance of
any certificate or opinion.
(f) Contribution. If the indemnity provided for the this Section 7 shall
be, in whole or in part, unavailable to any Indemnified Person, due to Section
7(b) being declared unenforceable by a court of competent jurisdiction based
upon reasons of public policy, so that Section 7(b) shall be insufficient to
hold each such Indemnified Person harmless from Losses which would otherwise
be indemnified hereunder, then the Indemnifying Party and the Indemnified
Person shall each contribute to the amount paid or payable for such Loss in
such proportion as is appropriate to reflect not only the relative benefits
received by the Indemnifying Party on the one hand and the Indemnified Person
on the other, but also the relative fault of the Indemnifying Party and be in
addition to any liability that the Indemnifying Party may otherwise have.
Subject to Section 7(h) hereunder, the indemnity, contribution and expense
reimbursement obligations that the Indemnifying Party has under this Section 7
shall survive the expiration of the Transaction Documents. The parties hereto
further agree that the indemnification and reimbursement commitments set forth
in this Agreement shall apply whether or not the Indemnified Person is a
formal part to any such lawsuit, claims or other proceedings.
(g) Limitation. No claim shall be brought by an Indemnified Person in
respect of any misrepresentation or breach of warranty under this Agreement
after one year from and after the date hereof; and any claim for
nonfulfillment, default or breach of any covenant shall be brought within one
year of the date of that such Indemnified Person became aware or should have
become aware of the nonfulfillment, default or breach. Except as set forth in
the previous sentence and in Section 7(c) above, this Section 7 is not
intended to limit the rights or remedies otherwise available to any party
hereto with respect to this Agreement or the Transaction Documents.
SECTION 8. Notices. All notices, demands and requests of any kind to be
delivered to any party in connection with this Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered or if sent
by nationally-recognized overnight courier or by registered or certified
airmail, return receipt requested and postage prepaid, or by facsimile
transmission, addressed as follows:
(i) if to the Company, to:
Bioject Medical Technologies, Inc.
7620 S.W. Bridgeport Road
Portland, Oregon
Facsimile: 503-620-6431
Attention: James C. O'Shea
with a copy to:
Bogle and Gates P.L.LC.
Two Union Square
601 Union St.
Seattle, WA 98101
Facsimile: (206) 621-2660
Attn: Christopher Barry
(ii) if to EIS, to:
Elan International Services, Ltd.
Flatts Smiths SL04
Bermuda
Facsimile: (441) 292-2224
Attention: President
with a copy to:
Brock Fensterstock Silverstein McAuliffe & Wade LLC
153 East 53rd Street
New York, New York 10022
Facsimile: (212) 371-5500
Attention: David Robbins
or to such other address as the party to whom notice is to be given may have
furnished to the other party hereto in writing in accordance with provisions
of this Section 8. Any such notice or communication shall be deemed to have
been received (i) in the case of personal delivery or facsimile transmission,
on the date of such delivery, (ii) in the case of nationally-recognized
overnight courier, on the second business day after the date when sent and
(iii) in the case of mailing, on the fifth business day following that day on
which the piece of mail containing such communication is posted. Notice
hereunder may be given on behalf of the parties by their respective attorneys.
SECTION 9. Withholding Taxes. Amounts of income or other taxes
which the Company is required by law to pay or withhold with respect to
payments or distributions made by it to EIS pursuant to the terms of this
Agreement and the Securities (the "Tax Amount") shall be deducted from such
payment or distribution. In the event that such a distribution made in
property other than cash would require the Company by law to pay or withhold
income taxes, prior to such distribution the Company shall advise EIS of the
Tax Amount, and EIS shall promptly remit such Tax Amount to the Company in
cash and the Company shall make such distribution of property to EIS, and in
such event, the Company will (i) promptly pay the Tax Amount to the relevant
taxing authority and (ii) provide to EIS such documentation necessary to
permit EIS to reclaim the Tax Amount as a Foreign Tax Credit. Notwithstanding
the foregoing, the Company shall not withhold, and EIS shall not be required
to pay, the Tax Amount if (i) EIS shall determine in good faith that on the
basis of a written opinion of an independent tax advisor that there is
substantial authority to determine that the Company is not required to
withhold the Tax Amount and (ii) EIS shall agree in writing to indemnify the
Company from and against all liability arising from a failure to pay or
withhold the Tax Amount, including without limitation the Tax Amount, and any
interest or penalty assessed thereon by such taxing authority. It shall be a
condition to any assignment of any Security that the assignee thereof be bound
by this Section 9.
SECTION 10. Amendments. This Agreement may not be modified or
amended, or any of the provisions hereof waived, except by written agreement
of the Company and EIS.
SECTION 11. Counterparts and Facsimile. The Transaction
Documents may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement. Each of the Transaction
Documents may be signed and delivered to the other party by facsimile
transmission; such transmission shall be deemed a valid signature.
SECTION 12. Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of the Agreement.
SECTION 13. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Oregon, without
giving effect to principles of conflicts of laws.
SECTION 14. Expenses. Each of the parties shall be responsible
for its own costs and expenses incurred in connection with the transactions
contemplated hereby and by the other Transaction Documents.
SECTION 15. Public Releases; Etc. The parties shall reasonably
agree upon the contents of any press release or releases and other public
disclosure in respect of the transactions contemplated hereby, and except as
may otherwise be required by applicable law or judicial or administrative
process or which the Company concludes in good faith is required by applicable
securities laws and regulations.
SECTION 16. Schedules, etc. All statements contained in any
exhibit or schedule delivered by or on behalf of the parties hereto, or in
connection with the transactions contemplated hereby, are an integral part of
this Agreement and shall be deemed representations and warranties hereunder.
SECTION 17. Assignments. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. This
Agreement, the other Transaction Documents, and the Securities may be
transferred by EIS to affiliates and subsidiaries without restriction, and in
addition, to five non-affiliated institutions, who are accredited investors
(as that term is defined under Regulation D of the Securities Act of 1933).
[Signature page follows]
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Securities Purchase Agreement as of the date first written above.
Bioject Medical Technologies Inc.
By:/s/ James C. O'Shea
Name: James C. O'Shea
Title: President
Elan International Services, Ltd.
By:/s/ Kevin Insley
Name: Kevin Insley
Title: President and Chief Financial Officer
EXHIBIT 10.42
BIOJECT MEDICAL TECHNOLOGIES, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of October 15, 1997, by and
among Bioject Medical Technologies Inc., an Oregon corporation (the
"Company"), and Elan International Services, Ltd., a Bermuda corporation
("EIS").
R E C I T A L S:
A. Pursuant to a Securities Purchase Agreement dated as of the date hereof
(the "Purchase Agreement"), EIS has acquired (x) certain shares of common
stock without par value (the "Common Stock") of the Company and a warrant to
purchase up to 1,750,000 shares (subject to adjustment) of Common Stock (the
"Warrant"), and (y) a promissory note (the Promissory Note"), which under
certain circumstances shall be exchanged by EIS for shares of two series of
preferred stock (the "Preferred Stock"), which Preferred Stock may be
convertible into shares of Common Stock.
B. The closing under the Purchase Agreement has occurred on the date hereof;
it being a condition to such closing that the parties execute and deliver this
Agreement.
C. The parties desire to set forth herein their agreement related to the
granting of certain registration rights to the Holders (as defined below) of
any Common Stock or securities convertible into Common Stock.
A G R E E M E N T:
The parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
"Affiliate" of any Person shall mean any other Person controlling,
controlled by or under common control with such particular Person. In the
case of a natural Person, his Affiliates include members of such Person's
immediate family, natural lineal descendants of such Person or a trust for the
exclusive benefit of such Person and his immediate family and natural lineal
descendants.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Holders", "holders" or "Holders of Registrable Securities" shall mean
EIS and any Person who shall have acquired Registrable Securities from EIS as
permitted herein pursuant to Section 9 hereof, either individually or jointly
as the case may be.
"Person" shall mean an individual, a partnership, a company, an association,
a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental quasi-governmental entity or any department,
agency or political subdivision thereof.
"Registrable Securities" means (i) any Common Stock issued or issuable under
the Purchase Agreement and the Warrant, (ii) any Common Stock issued or
issuable upon conversion of or in connection with the holding of the Preferred
Stock , (iii) any Common Stock issued or issuable in respect of the securities
referred to in clauses (i) or (ii) above upon any stock split, stock dividend,
recapitalization or similar event, and (iv) any other stock acquired by EIS or
its affiliates from the Company; excluding in all cases, however, any
Registrable Securities sold by a Person in a transaction (including a
transaction pursuant to a registration statement under this Agreement and
transaction pursuant to Rule 144 promulgated under the Securities Act) in
which registration rights are not transferred pursuant to Section 9 hereof.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, other than Selling
Expenses, incurred by the Company in complying with Sections 2 or 3 hereof,
including without limitation, all registration, qualification and filing fees,
exchange listing fees, printing expenses, escrow fees, fees and disbursements
of counsel for the Company, blue sky fees and expenses, the expense of any
special audits incident to or required by any such registration and the
reasonable fees and disbursements, not to exceed $10,000 in the aggregate, of
one counsel for the Holders, such counsel to be selected by Holders holding a
majority of the Registrable Securities held by the Holders and included in
such registration.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered
by the Holders and the costs of any accountants, counsel or other experts
retained by the Holders.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. Demand Registrations. (a) Requests for Registration. Any Holder which
holds Registrable Securities representing at least the majority of the
Registered Securities then outstanding has the right at any time from time to
time, to request registration under the Securities Act of all or part of their
Registrable Securities on Form S-1, S-2 or S-3 (if available) or any similar
registration (each, a "Demand Registration"), such form to be selected by
the Company, it being understood that the Company is not required to file a
registration statement with respect to common stock not deemed outstanding
within the meaning of General Instruction I.B.3. of Form S-3. Each written
request for a Demand Registration (as defined below) shall specify the
approximate number of Registrable Securities requested to be registered.
Within 10 days after receipt of any such request, the Company will give
written notice of such requested registration to all other Holders of
Registrable Securities and, if they request to be included in such
registration, the Company shall include such Holders' Registrable Securities
in such offering if they have responded affirmatively within 10 days after the
receipt of the Company's notice. The Holders in aggregate will be entitled to
request two Demand Registrations. A registration will not count as one of the
permitted Demand Registrations until it has become effective (unless such
Demand Registration has not become effective due solely to the fault of the
Holders requesting such registration, including a request by such Holders
that such registration be withdrawn). In the event that a the Holders shall
exercise their right to Demand Registration under this section, and such
Demand Registration shall be underwritten, the Company and the Holders
exercising such right shall bear the costs associated with the underwritten
registration on an equal basis. The Company shall be liable for payment of
all expenses associated with any Demand Registrations which are not
underwritten in accordance with the terms hereof.
(b) Priority on Demand Registrations. If a Demand Registration is an
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such
offering, exceeds the number of Registrable Securities and other securities,
if any, which can be sold in such offering without adversely affecting the
marketability of the offering, the Company will include in such registration:
(i) first, the Registrable Securities requested to be included in such
registration by the Holders (or, if necessary, such Registrable Securities pro
rata among the Holders thereof based upon the number of Registrable Securities
owned by each such Holder) together with any securities held by third parties
holding a similar, previously granted right to be included in such
registration; and
(ii) thereafter, other securities requested to be included in such
registration.
(c) Restrictions on Demand Registrations. The Company may postpone for up to
six months in any 12-month period, the filing or the effectiveness of a
registration statement for a Demand Registration if the Company determines in
good faith that such Demand Registration would reasonably be expected to have
a material adverse effect on any proposal or plan by the Company to engage in
any financing, acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or
similar transaction or would require disclosure of any information that the
board of directors of the Company determines in good faith the disclosure of
which would be detrimental to the Company; provided, that in such event, the
Holders initially requesting such Demand Registration will be entitled to
withdraw such request and, if such request is withdrawn, such Demand
Registration will not count as one of the permitted Demand Registrations
hereunder and the Company will pay any Registration Expenses in connection
with such withdrawn registration.
(d) Selection of Underwriters. The Holders will have the right to select the
investment banker(s) and manager(s) to administer an offering pursuant to a
Demand Registration, subject to the Company's approval, which will not be
unreasonably withheld.
(e) Other Registration Rights. Except as provided in this Agreement, so long
as any Holder owns any Registrable Securities, the Company will not grant to
any Persons the right to request the Company to register any equity securities
of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, which is in conflict with the rights granted
to the Holders hereunder, without the prior written consent of the Holders of
at least 50% of the Registrable Securities held by the Holders; it being
understood that the Company may grant rights to other Persons to (i)
participate in Piggyback Registrations so long as such rights are subordinate
or pari passu to the rights of the holders of Registrable Securities with
respect to such Piggyback Registrations and (ii) request registrations so long
as the Holders of Registrable Securities are entitled to participate in any
such registrations with such Persons pro rata on the basis of the number of
shares owned by each such Holder.
3. Piggyback Registrations. (a) Right to Piggyback. At any time the Company
shall propose to register Common Stock under the Securities Act (other than in
a registration on Form S-3 relating to sales of securities to participants in
a Company dividend reinvestment plan, S-4 or S-8 or any successor form or in
connection with an acquisition or exchange offer or an offering of securities
solely to the existing stockholders or employees of the Company) (each, a
"Piggyback Registration"), the Company will give prompt written notice to
all Holders of Registrable Securities of its intention to effect such a
registration and, subject to Section 3(b) and the other terms of this
Agreement, will include in such registration all Registrable Securities which
are permitted under applicable securities laws to be included in the Form of
registration statement selected by the Company and with respect to which the
Company has received written requests for inclusion therein within 15 days
after the receipt of the Company's notice.
(b) Priority on Piggyback Registrations. If a Piggyback Registration is an
underwritten registration of Common Stock, and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without adversely affecting the marketability of the
offering, the Company will include in such registration:
(i) the securities the Company proposes to sell;
(ii) any securities having the right to be included in such registration prior
to the securities of the Holders, provided that such registration right shall
have existed prior to the date hereof;
(iii) the Registrable Securities requested to be included in such registration
by the Holders and such other Persons and any securities requested to be
included in such registration by any other Person, pro rata among the Holders
of such Registrable Securities and such other Persons, on the basis of the
number of shares owned by each of such Holders subject to the rights of such
other Persons under agreements existing as of the date hereof; and
(iv) thereafter, other securities requested to be included in such
registration.
The Holders of any Registrable Securities included in such a registration must
execute an underwriting agreement in form and substance satisfactory to the
managing underwriters.
(c) Right to Terminate Registration. If, at any time after giving written
notice of its intention to register any of its securities as set forth in
Section 3(a) and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for
any reason not to register such securities, the Company may, at its election,
give written notice of such determination to each Holder of Registrable
Securities and thereupon be relieved of its obligation to register any
Registrable Securities in connection with such registration (provided that the
Company shall pay the Registration Expenses in connection therewith).
(d) Selection of Underwriters. The Company will have the right to select the
investment banker(s) and manager(s) to administer an offering pursuant to a
Piggyback Registration.
4. Expenses of Registration. Subject to the final sentence of Section 2(a),
Registration Expenses incurred in connection with all registrations pursuant
to Section 2 shall be borne by the Company. All Selling Expenses relating to
securities registered on behalf of the Holders of Registrable Securities shall
be borne by such holders. Registration expenses incurred in connection with
registration pursuant to Section 3 shall be borne by the Company and the
Holders on a pro rata basis in accordance with the number of Shares sold by
each.
5. Holdback Agreements. (a) The Company agrees (i) not to effect any public
offering, sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during
the seven days prior to and during the 90-day period beginning on the
effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten registration or
pursuant to registrations on Form S-8 or any successor form), unless the
underwriters managing the registered public offering otherwise agree, and (ii)
to use reasonable efforts to cause each holder of at least 5% (on a fully-
diluted basis) of its Common Stock, or any securities convertible into or
exchangeable or exercisable for Common Stock, purchased from the Company at
any time after the date of this Agreement (other than in a registered public
offering) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any such securities during such periods (except
as part of such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree.
(b) Each holder of Registrable Securities agrees, if requested by the
managing underwriter or underwriters in an underwritten offering of securities
of the Company, not to effect any offer, sale, distribution or transfer (or
offer or agree to do so) of Registrable Securities, including a sale pursuant
to Rule 144 (or any similar provision then effect) under the Securities Act
(except as part of such underwritten registration), during the seven-day
period prior to, and during the 90-day period or such shorter period as may be
agreed to by the parties hereto) following the effective date of such
Registration Statement to the extent timely notified in writing by the Company
or the managing underwriter or underwriters.
6. Registration Procedures. Whenever the Holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to this
Agreement, the Company will use its best efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of distribution thereof, and pursuant thereto the Company will as
expeditiously as possible:
(a) subject to Section 2(c) hereof, prepare and file with the Commission a
registration statement on any form for which the Company qualifies with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will (i) furnish to the counsel selected by the Holders copies of
all such documents proposed to be filed, which documents will be subject to
the review of such counsel, and (ii) notify each holder of Registrable
Securities covered by such registration of any stop order issued or threatened
by the Commission);
(b) subject to Section 2(c) hereof, prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than nine months and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of copies of
such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as such seller may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by
such seller;
(d) use its best efforts to register or qualify such Registrable Securities
under such other securities or blue sky laws of such jurisdiction as any
seller reasonably requests and do any and all other acts and things which may
be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 6(d), (ii) subject itself to taxation
in any jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Securities, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein not
misleading, and, at the request of any such seller, the Company will prepare a
supplement of amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading; provided that the
Company shall not be required to amend the registration statement or
supplement the Prospectus for a period of up to six months if the board of
director determines in good faith that to do so would reasonably be expected
to have a material adverse effect on any proposal or plan by the Company to
engage in any financing, acquisition or disposition of assets (other than in
the ordinary course of business) or any merger, consolidation, tender offer or
similar transaction or would require the disclosure of any information that
the board of directors determines in good faith the disclosure of which would
be detrimental to the Company, it being understood that the period for which
the Company is obligated to keep the Registration Statement effective shall be
extended for a number of days equal to the number of days the Company delays
amendments or supplements pursuant to this provision. Upon receipt of any
notice pursuant to this section 6(e) Holders shall suspend all offers and
sales of securities of the Company and all use of any prospectus until advised
by the Company that offers and sales may resume, and shall keep confidential
the fact and content of any notice given by the Company pursuant to this
section 6(e)
(f) cause all such Registrable Securities to be listed on each securities
exchange on which similar securities issued by the Company are then listed
and, if not so listed, to be listed on the NASD automated quotation system
and, if listed on the NASD automated quotation system, use its best efforts to
secure designation of all such Registrable Securities covered by such
registration statement as a NASDAQ National market system security within the
meaning of Rule 11Aa2-1 of the Commission or, failing that, to secure NASDAQ
authorization for such Registrable Securities and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register as such with respect to such Registrable Securities with the NASD;
(g) provide a transfer agent and registrar for all such Registrable Securities
not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting agreements in
customary form) and take all such other actions as the holders of a majority
of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including without limitation, effecting a stock split
or a combination of shares);
(i) make available for inspection by a representative of the Holders of
Registrable Securities included in the registration statement, any underwriter
participating in any disposition pursuant to such registration statement and
any attorney, accountant or other agent retained by any such seller or
underwriter all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonable requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(j) otherwise use its reasonable efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period
of at least 12 months beginning with the first day of the Company's first full
calendar quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification
of any common stock included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order; and
(l) obtain a so-called "cold comfort" letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters.
7. Indemnification. (a) The Company agrees to indemnify, to the fullest
extent permitted by applicable law, each Holder of Registrable Securities, its
officers and directors and each Person who controls such Holder (within the
meaning of the Securities Act) against all losses, claims, damages,
liabilities, expenses or any amounts paid in settlement of any litigation,
investigation or proceeding commenced or threatened (collectively, "Claims")
to which each such indemnified party may become subject under the Securities
Act insofar as such Claim arose out of (i) any untrue or alleged untrue
statement of material fact contained, on the effective date thereof, in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or (ii) 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, except insofar as the same are
caused by or contained in any information furnished in writing to the Company
by such holder expressly for use therein or by such holder's failure to
deliver a copy of the registration statement or prospectus or any amendments
or supplements thereto after the Company has furnished such holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company will indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning
of the Securities Act) to the same extent as provided above with respect to
the indemnification of the holders of Registrable Securities.
(b) In connection with any registration statements in which a holder of
Registrable Securities is participating, each such Holder will furnish to the
Company in writing such customary information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus (the "Seller's Information") and, to the fullest extent
permitted by applicable law will indemnify the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act) against any and all Claims to which each such indemnified
party may become subject under the Securities Act insofar as such Claim arose
out of (i) any untrue or alleged untrue statement of material fact contained,
on the effective date thereof, in any registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto, (ii)
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
or (iii) any violations by such Person of any federal, state or common law
rule or regulation applicable to such Person and relating to action required
of or inaction by such Person in connection with any such registration;
provided that with respect to a Claim arising pursuant to clause (i) or (ii)
above, the material misstatement or omission is contained in such Seller's
Information; provided, further, that the obligation to indemnify will be
individual to each Holder and will be limited to the net amount of proceeds
received by such Holder from the sale of Registrable Securities pursuant to
such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification (but the failure to provide such notice shall not
release the indemnifying party of its obligation under paragraphs (a) and (b),
unless and then only to the extent that, the indemnifying party has been
prejudiced by such failure to provide such notice) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one counsel
for all parties indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified party a conflict
of interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(d) The indemnifying party shall not be liable to indemnify an indemnified
party for any settlement, or consent to judgment of any such action effected
without the indemnifying party's consent (but such consent will not be
unreasonably withheld). Furthermore, the indemnifying party shall not,
except with the approval 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 each
indemnified party of a release from all liability in respect to such claim or
litigation without any payment or consideration provided by each such
indemnified party.
(e) If the indemnification provided for in this Section 7 is unavailable to an
indemnified party under clauses (a) and (b) above in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
not only the relative benefits received by the Company, the underwriters, the
sellers of Registrable Securities and any other sellers participating in the
registration statement from the sale of shares pursuant to the registered
offering of securities to which indemnity is sought but also the relative
fault of the Company, the underwriters the sellers of Registrable Securities
and any other sellers participating in the registration statement in
connection with the statement or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the
underwriters, the sellers of Registrable Securities and any other sellers
participating in the registration statement shall be deemed to be based on the
relative relationship of the total net proceeds from the offering (before
deducting expenses) to the Company, the total underwriting commissions and
fees from the offering (before deducting expenses) to the underwriters and the
total net proceeds from the offering (before deducting expenses) to the
sellers of Registrable Securities and any other sellers participating in the
registration statement. The relative fault of the Company, the underwriters,
the sellers of Registrable Securities and any other sellers participating in
the registration statement shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by registration statement and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The indemnification provided for under this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of the
indemnified party or any officer, director or controlling person of such
indemnified party and will survive the transfer of securities.
8. Participation in Underwritten Registrations. No Person may participate in
any registration hereunder which is underwritten unless such Person (a) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements, (b) as expeditiously as possible notifies the Company of
the occurrence of any event as a result of which such prospectus contains an
untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and (c) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. Transfer of Registration Rights. The rights granted to any Person under
this Agreement may be assigned to a transferee or assignee in connection with
any transfer or assignment of Registrable Securities by a Holder; provided,
that: (a) such transfer may otherwise be effected in accordance with
applicable securities laws, (b) if not already a party hereto, the assignee or
transferee agrees in writing prior to such transfer to be bound by the
provisions of this Agreement applicable to the transferor, (c) such transferee
shall own Registrable Securities representing at least 1,000,000 shares of
Common Stock, subject to the Anti-dilution Adjustments, and (d) EIS shall act
as agent and representative for such Holder for the giving and receiving of
notices hereunder.
10. Information by Holder. Each Holder shall furnish the Company such
written information regarding such Holder and any distribution proposed by
such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration qualification or
compliance referred to in this Agreement.
11. Exchange Act Compliance. After the IPO, the Company shall comply with
all of the reporting requirements of the Securities Exchange Act of 1934
applicable to it and shall comply with all other public information reporting
requirements of the Commission which are conditions to the availability of
Rule 144 for the sale of the Registrable Securities. The Company shall
cooperate with each Purchaser in supplying such information as may be
necessary for such Purchaser to complete and file any information reporting
forms presently or hereafter required by the Commission as a condition to the
availability of Rule 144.
12. Limitation on Registration. The Company shall not be obligated to effect
a registration of any Holder's Registrable Securities pursuant to Sections 2
or 3 hereof if all of the Registrable Securities have been sold under Rule
144, Regulation S or similar provision under the Securities Act so that there
is no further restriction on the transfer by the transferee. The Company
shall not be required to include any Registerable Securities of a Holder in a
registration if all of such Holder's Registerable Securities could be sold
within a three month period pursuant to Rule 144 or other similar rule or
regulation.
13. Miscellaneous. (a) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the Holders of Registrable
Securities in this Agreement.
(b) Remedies. Any Person having rights under any provision of this Agreement
will be entitled to enforce such rights specifically to recover damages caused
by reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions
of this Agreement and that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any bond or
other security) for specific performance and for other injunctive relief in
order to enforce or prevent violation of the provisions of this Agreement;
provided that in no event shall any Holder have the right to enjoin or
interfere with any offering of securities by the Company.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and Holders of at least 50% of the Registrable
Securities; provided, that without the prior written consent of all the
Holders, no such amendment or waiver shall reduce the foregoing percentage.
(d) Successors and Assigns. Subject to Section 9 hereof, all covenants and
agreements in this Agreement by or on behalf of any of the parties hereto will
bind and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not. In particular, no Holder of
Registrable Securities shall transfer registered securities (or securities
convertible into, exerciseable or exchangeable for Registrable Securities)
other than pursuant to Rule 144 or sale pursuant to an effective registration
statement, whether or not the transferee shall have rights under this
Agreement, without obtaining an agreement from the transferee to be bound by
the terms of this Agreement; and in addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of Holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(e) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(h) Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement and the exhibits and schedules hereto will be
governed by the internal law, and not the law of conflicts, of New York.
(i) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to
the recipient or by telecopy, one day after being sent to the recipient by
reputable overnight courier service (charges prepaid) or three days after
being mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
will be sent to the parties hereto at the addresses indicated on the signature
page hereto and to the Company at the address indicated below:
Bioject Medical Technologies Inc.
7620 S.W. Bridgeport Road
Portland, Oregon 97224
Telecopier: 503-620-6431
Attention: President
(j) Termination. This Agreement shall terminate on the date as of which each
Holder has sold all remaining Registrable Securities in a transaction or
transactions of the type described in Section 12 hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Bioject Medical Technologies Inc.
By:/s/ James C. O'Shea
Name: James C. O'Shea
Title: President
Elan International Services, Ltd.
By:/s/ Kevin Insley
Name: Kevin Insley
Title: President and Chief Financial Officer
EXHIBIT 10.43
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAWS. NO SALE OR DISPOSITION OF THIS WARRANT
OR OF ANY SHARES OF COMMON STOCK ISSUED PURSUANT HERETO MAY BE EFFECTED
WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (ii) AN
OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY IN FORM AND CONTENT
TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
BIOJECT MEDICAL TECHNOLOGIES INC.
SERIES "K" WARRANT TO PURCHASE SHARES
OF COMMON STOCK
THIS CERTIFIES THAT, for value received, Elan International Services, Ltd., a
Bermuda corporation, or its affiliates or assigns or any other holder of this
Warrant, as permitted herein (each, a "Holder"), is entitled to subscribe
for and purchase up to 1,750,000 shares as adjusted pursuant to Section 4
hereof(as so adjusted, the "Shares") of the fully paid and nonassessable
common stock without par value (the "Common Stock"), of Bioject Medical
Technologies Inc., an Oregon corporation (the "Company"), at the price of
$2.50 per share (such price, and such other price as shall result, from time
to time, from the adjustments specified in Section 4 below, the "Warrant
Price"), subject to the provisions and upon the terms and conditions
hereinafter set forth.
1. Term. The purchase right represented by this Warrant is exercisable, in
whole or in part, at any time, and from time to time, from and after the date
hereof and until 5:00 p.m. New York City Time October 15, 2002. To the extent
not exercised at 5:00 p.m. New York City Time on October 15, 2002, this
Warrant shall completely and automatically terminate and expire, and
thereafter it shall be of no force or effect whatsoever.
2. Method of Exercise; Payment; Issuance of New Warrant. (a) The purchase
right represented by this Warrant may be exercised by the Holder(s), in whole
or in part and from time to time, by the surrender of this Warrant (with the
notice of exercise form attached hereto as Annex A duly executed) at the
principal office of the Company and by the payment to the Company of an
amount, in cash or other immediately available funds, equal to the then
applicable Warrant Price per Share multiplied by the number of Shares then
being purchased.
(b) The person or persons in whose name(s) any certificate(s) representing
shares of Common Stock shall be issuable upon exercise of this Warrant shall
be deemed to have become the holder(s) of record of, and shall be treated for
all purposes as the record holder(s) of, the Shares represented thereby (and
such Shares shall be deemed to have been issued) immediately prior to the
close of business on the date or dates upon which this Warrant is exercised.
Upon any exercise of the rights represented by this Warrant, certificates for
the Shares purchased shall be delivered to the Holder(s) hereof as soon as
possible and in any event within 10 business days of receipt of such notice
and payment, and unless this Warrant has been fully exercised or expired, a
new Warrant representing the portion of Shares, if any, with respect to which
this Warrant shall not then have been exercised, shall also be issued to the
holder hereof as soon as possible and in any event within such 30-day period.
3. Stock Fully Paid, Reservation of Shares. All Shares that may be issued
upon the exercise of the rights represented by this Warrant will, upon
issuance, be duly authorized, fully paid and nonassessable, and will be free
from all taxes, liens and charges with respect to the issue thereof. During
the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized, and reserved for the
purpose of the issue upon the exercise of the purchase rights evidenced by
this Warrant, a sufficient number of shares of its Common Stock to provide for
the exercise of the rights represented by this Warrant.
4. Adjustment of Warrant Price and Number of Shares. The number and kind of
securities purchasable upon the exercise of this Warrant and the Warrant Price
shall be subject to the adjustment from time to time upon the occurrence of
certain events, as follows:
(a) Reclassification, Merger, Etc. In case of (i) any reclassification,
reorganization, change or conversion of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value
to no par value), or (ii) any consolidation of the Company with or into
another corporation (other than a merger or consolidation with another
corporation in which the Company is the acquiring and the surviving
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon exercise of this Warrant), or (iii) any
sale of all or substantially all of the assets of the Company, then the
Company, or such successor or purchasing corporation, as the case may be,
shall duly execute and deliver to the holder of this Warrant a new Warrant or
a supplement hereto (in form and substance reasonably satisfactory to the
holder of this Warrant), so that the holder of this Warrant shall have the
right to receive, at a total purchase price not to exceed that payable upon
the exercise of the unexercised portion of this Warrant, and in lieu of the
shares of Common Stock theretofore issuable upon the exercise of this Warrant,
the kind and amount of shares of stock, other securities, money and property
receivable upon such reclassification, reorganization, change, conversion,
merger or consolidation by a holder of the number of shares of Common Stock
then purchasable under this Warrant. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4. The provisions of this Section
4(a) shall similarly attach to successive reclassifications, reorganizations,
changes, mergers, consolidations and transfers.
(b) Subdivision or Combination of Shares. If the Company at any time during
which this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, (i) in the case of a subdivision, the Warrant Price
shall be proportionately decreased and the number of Shares purchasable
hereunder shall be proportionately increased, and (ii) in the case of a
combination, the Warrant Price shall be proportionately increased and the
number of Shares purchasable hereunder shall be proportionately decreased.
(c) Stock Dividends; Etc. If the Company at any time while this Warrant is
outstanding and unexpired shall (i) pay a dividend with respect to Common
Stock payable in Common Stock (or rights, options or warrants in respect
thereof (collectively, "Options")), or (ii) issue any warrants, other than
those currently outstanding or which the Company, prior to the date hereof has
obligated itself to issue, or Options, other than up to 3,650,000 shares of
Common Stock pursuant to a duly authorized and constituted stock option plan,
to officers, directors, employees or consultants to the Company, having an
exercise price (on a per-share basis) below the fair market value of a share
of Common Stock on the date of authorization or grant of such Options, or
(iii) make any other distribution with respect to Common Stock (except any
distribution specifically provided for in Sections 4(a) and (b) above), the
price at which the holder of this Warrant shall be able to purchase Shares
shall be adjusted by multiplying the Warrant Price in effect immediately prior
to such date of determination of the holders of securities entitled to receive
such distribution, by a fraction (A) the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to such
dividend or distribution, and (B) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such dividend
or distribution, as if all of such Options had been exercised and the Company
received the consideration payable in respect thereof. Upon each adjustment
in the Warrant Price pursuant to this Section 4(c), the number of Shares of
Common Stock purchasable hereunder shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Shares purchasable
immediately prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately prior to such
adjustment and the denominator of which shall be the Warrant Price immediately
thereafter.
(d) Repurchases or Redemptions of Common Stock or Options. If the Company
at any time while this Warrant is outstanding and unexpired shall repurchase
or redeem any outstanding shares of Common Stock or any Options, other than
its shares of Series C Preferred Stock, at a price which is greater than the
then-current Market Price (for purposes hereof, Market Price shall be defined
as the average closing price of the Common Stock for the 10 trading days
ending on the day that is two business days prior to the date upon which the
Company shall purchase or redeem any outstanding shares of Common Stock), the
Warrant Price shall thereupon be adjusted by multiplying the Warrant Price in
effect at the time of such repurchase by a fraction (i) the numerator of which
shall be Warrant Price in effect immediately prior to such repurchase or
redemption and (ii) the denominator of which shall be the fair market value of
the consideration paid for the shares of Common Stock and/or Options at the
time of purchase. Upon each adjustment in the Warrant Price pursuant to this
Section 4(d), the number of Shares of Common Stock purchasable hereunder shall
be adjusted, to the nearest whole share, to the product obtained by
multiplying the number of Shares purchasable immediately prior to such
adjustment in the Warrant Price by a fraction, the numerator of which shall be
the Warrant Price immediately prior to such adjustment and the denominator of
which shall be the Warrant Price immediately thereafter.
(e) No Impairment. The Company will not, by amendment of its charter or
bylaws or through any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Company, but will at
all times in good faith assist in the carrying out of all the provisions of
this Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant
against impairment.
(f) Notice of Adjustments. Whenever the Warrant Price or the number of
Shares purchasable hereunder shall be adjusted pursuant to this Section 4, the
Company shall prepare a certificate setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated. Such certificate shall be signed by its
chief financial officer and shall be delivered to the holder of this Warrant.
(g) Fractional Shares. No fractional shares of Common Stock will be issued
in connection with any exercise hereunder, but in lieu of such fractional
shares the Company shall make a cash payment therefor based on the fair market
value of the Common Stock on the date of exercise as reasonably determined in
good faith by the Company's Board of Directors.
(h) Registration Requirement. This Warrant may not be exercised by or for the
account or benefit of any person other than Elan International Services, Ltd.,
or a transferee permitted hereunder, unless (i) the exercise transaction is
covered by an effective registration statement under the Securities Act of
1933, as amended (the "Act") and any applicable state securities laws; or
(ii) registration under the Act, or any applicable state securities laws is
not required, and the Company has received an opinion of counsel to such
effect, in form and content satisfactory to the Company.
(i) Transferrability. This Warrant shall be non-transferrable prior to
February 1, 1998 and thereafter shall be transferrable only to (i) affiliates
of the Holder or (ii) five non-affiliates thereof who are accredited
institutions (as defined under Regulation D of the Securities Exchange Act of
1934, as amended).
5. Compliance with Securities Act; Disposition of Warrant or Shares of Common
Stock.(a) The holder of this Warrant, by acceptance hereof, agrees that this
Warrant and the Shares to be issued upon exercise hereof are being acquired
for investment and that such holder will not offer, sell or otherwise dispose
of this Warrant or any Shares to be issued upon exercise hereof except under
circumstances which will not result in a violation of applicable securities
laws. This Warrant and all Shares issued upon exercise of this Warrant
(unless registered under the Act) shall be stamped or imprinted with a legend
in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY
BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS RELATED THERETO OR (ii) AN OPINION OF COUNSEL
FOR THE HOLDER, IN FORM AND CONTENT SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED.
(b) With respect to any offer, sale or other disposition of this Warrant or
any Shares acquired pursuant to the exercise of this Warrant prior to
registration of such Shares, the holder hereof and each subsequent holder of
this Warrant agrees to give written notice to the Company prior thereto,
describing briefly the manner thereof, together with a written opinion of such
holder's counsel in form and content satisfactory to the Company, if requested
by the Company, to the effect that such offer, sale or other disposition may
be effected without registration or qualification (under the Act as then in
effect or any federal or state law then in effect) of this Warrant or such
Shares and indicating whether or not under the Act certificates for this
Warrant or such Shares to be sold or otherwise disposed of require any
restrictive legend as to applicable restrictions on transferability in order
to ensure compliance with the Act. Promptly upon receiving such written
notice and satisfactory opinion, if so requested, the Company, as promptly as
practicable, shall notify such holder that such holder may sell or otherwise
dispose of this Warrant or such Shares, all in accordance with the terms of
the notice delivered to the Company. Notwithstanding the foregoing, this
Warrant or such Shares may be offered, sold or otherwise disposed of in
accordance with Rule 144 as promulgated under the Act ("Rule 144"), provided
that the Company shall have been furnished with such information as the
Company may reasonably request to provide a reasonable assurance that the
provisions of Rule 144 have been satisfied. Each certificate representing
this Warrant or the Shares thus transferred (except a transfer pursuant to
Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to insure compliance with the Act, unless in the
aforesaid opinion of counsel for the holder, such legend is not required in
order to insure compliance with the Act. The Company may issue stop transfer
instructions to its transfer agent in connection with such restrictions.
The shares issuable upon exercise of this Warrant are entitled to the benefit
of certain registration rights as set forth in a Registration Rights Agreement
dated as of the date hereof between the Company and the initial Holder named
herein.
6. Rights as Shareholders. No holder of this Warrant, as such, shall be
entitled to vote or receive dividends or be deemed the holder of Shares or any
other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the holder of this Warrant, as such, any right to
vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to receive notice of meetings, or to
receive dividends or subscription rights or otherwise until this Warrant shall
have been exercised and the Shares purchasable upon the exercise hereof shall
have become deliverable, as provided herein.
7. Representations and Warranties. The Company represents and warrants to
the holder of this Warrant as follows:
(a) This Warrant has been duly authorized and executed by the Company and is
a valid and binding obligation of the Company enforceable in accordance with
its terms;
(b) The Shares have been duly authorized and reserved for issuance by the
Company and, when issued in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable; and
(c) The execution and delivery of this Warrant are not, and the issuance of
the Shares upon exercise of this Warrant in accordance with the terms hereof
will not be, inconsistent with the Company's charter or bylaws, as amended, or
by-laws, and do not and will not constitute a default under, any indenture,
mortgage, contract or other instrument of which the Company is a party or by
which it is bound.
8. Miscellaneous. (a) This Warrant and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by
both the Company and the holders of warrants that are outstanding at the time
to purchase a majority of the shares of Common Stock issuable upon exercise of
this Warrant remaining on the date of the action taken.
(b) Any notice, request or other document required or permitted to be given
or delivered to the holder hereof or the Company shall (i) be in writing, (ii)
be delivered personally or sent by mail or overnight courier to the intended
recipient to each such holder at its address as shown on the books of the
Company or to the Company at the address indicated therefor on the signature
page of this Warrant, unless the recipient has given notice of another
address, and (iii) be effective on receipt if delivered personally, tw
business days after dispatch if mailed, and one business day after dispatch if
sent by overnight courier service.
(c) Subject to the satisfaction of all of the provisions of this Warrant,
the holder hereof may transfer all or any portion of this Warrant at any time
to (i) an affiliate of the Holder initially namd herein and (ii) an aggregate
of five non-affiliated institutions or investment vehicles, who are accredited
investors (as that term is defined under Regulation D of the Securities Act of
1933).
(d) The Company covenants to the holder hereof that upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of a bond or indemnity reasonably satisfactory to
the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant, the Company will make and deliver a new Warrant,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant.
(e) The descriptive headings of the several sections and paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant.
(f) This Warrant shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York.
[Signature page follows]
IN WITNESS WHEREOF, Bioject Medical Technologies Inc. has executed this
Warrant as of the date set forth below.
Bioject Medical Technologies Inc.
By:/s/ James C. O'Shea
Name: James C. O'Shea
Title: President
Dated: October 15, 1997
Annex A
NOTICE OF EXERCISE
To: Bioject Medical Technologies Inc.
1.The undersigned hereby elects to purchase ____________ shares of Common
Stock of Bioject Medical Technologies Inc. pursuant to the terms of the
attached Warrant, and tenders herewith full payment of the purchase price of
such shares, in cash or other immediately available funds.
2.Please issue a certificate or certificates representing said shares in the
name of the undersigned or in such other name or names as are specified below:
_____________________________________(Name)
(Address)
3.The undersigned represents that the aforesaid shares are being acquired for
the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned
has no present intention of distributing or reselling such shares.
Signature:__________________________
Name:_____________________________
Address:___________________________
___________________________
___________________________
Social Security or taxpayer identification number:________________________
Exhibit 10.44
PROMISSORY NOTE
U.S.$12,015,000 New York, New York
October 15, 1997
FOR VALUE RECEIVED, and good and valuable consideration, the undersigned,
Bioject Medical Technologies Inc., an Oregon corporation with offices at 7620
SW Bridgeport Road, Portland, Oregon 97224 (the "Company"), unconditionally
promises to pay to Elan International Services, Ltd., a Bermuda corporation
(together with any other holder of this Note, as permitted herein, the
"Holder"), at such place as may be designated by the Holder to the Company,
the principal amount of U.S.$12,015,000, together with interest thereon from
and after the date hereof, at a rate per annum equal to the lesser of (x) 9%
and (y) the maximum rate of interest permitted by applicable law, compounded
on a semi-annual basis commencing as of the First Payment Date (as defined
below). The rate of interest payable per annum shall be adjusted to 12%
effective from and after January 1, 1998. Interest only shall be payable 180
days from and after the date hereof (the "First Payment Date"); thereafter
interest only shall be payable quarterly in arrears on each March 31, June 30,
September 30 and December 31 (or if any such date is not a business day, the
following business day).
This Note shall be non-negotiable prior to February 1, 1998 (other than to
affiliates of the Holder originally named herein) and thereafter shall be
transferrable only to (i) affiliates of the Holder or (ii) up to an aggregate
of five institutional investors that are non-affiliates of the Holder and
that are accredited investors(as defined under Regulation D of the Securities
Exchange Act of 1934, as amended).
The entire principal amount of this Note (together with any accrued and unpaid
interest hereon) shall be due and payable on October 15, 2001; however, all or
any portion of the outstanding principal amount of this Note (together with
any accrued and unpaid interest hereon) may be prepaid at any time by the
Company from and after February 1, 1998 upon at least 10 days written notice
to the Holder.
This Note (and interest hereon) shall immediately become due and payable,
without notice or demand, upon the occurrence of any of the following events:
(i) the filing by or against the Company of any petition under the United
States Bankruptcy Code or any similar state proceeding (which, in the event of
a filing against the Company, is not cured or stayed within 30 days); (ii) the
application for, or appointment of, a receiver of the Company's property;
(iii) the appointment of a committee of the Company's creditors; (iv) the
making by the Company of an assignment for benefit of creditors; or (v) the
default in payment or performance of this Note or of any of the obligations of
this Note which shall remain uncured 30 days after written notice thereof has
been given by the Holder to the Company.
The Company hereby waives grace, demand and presentment for payment, notice of
nonpayment, protest and notice of protest, diligence, filing suit, and all
other notice and promises to pay the Holder its costs of collection of all
amounts due hereunder, including reasonable attorneys' fees.
In the event of any default or breach of this Note by the Company, this Note
(and accrued and unpaid interest on this Note) shall, in addition to all other
rights and remedies of the Holder hereunder and under applicable law, be and
become immediately due and payable; this Note shall continue to bear interest
after such default or breach at the interest rate otherwise in effect
hereunder plus 3% per annum (but in any event not in excess of the maximum
rate of interest permitted by applicable law). This Note is made in connection
with a Securities Purchase Agreement dated as of the date hereof (the
"Agreement") between the Company and the Holder originally named herein. This
Note is the Promissory Note referred to in the Agreement and the Holder is
intended to be afforded the benefits thereof.
This Note may not be changed or terminated orally and shall be construed in
accordance with the internal laws of the State of New York without reference
to the principles of conflicts of laws thereof.
[Signature page to follow]
IN WITNESS WHEREOF, the Company has executed this Note on the date first
above written.
Bioject Medical Technologies Inc.
By:/s/ James C. O'Shea
Name: James C. O'Shea
Title: President
ATTEST:
By:/s/Peggy J. Miller
Name: Peggy J. Miller
EXHIBIT 10.45
NEWCO
SUBSCRIPTION AND STOCKHOLDERS AGREEMENT
SUBSCRIPTION AND STOCKHOLDERS AGREEMENT, dated as of October 15, 1997, by and
among Bioject JV Subsidiary Inc., an Oregon corporation ("Newco" or the
"Company"), Bioject Medical Technologies Inc., an Oregon corporation
("Bioject"), and Elan International Services, Ltd., a Bermuda corporation
("EIS"; together with Bioject, the "Stockholders"; each sometimes referred to
herein as a "Stockholder").
R E C I T A L S:
A. The Company desires to issue and sell to EIS and Bioject (the
"Purchasers"), and the Purchasers desire to purchase from the Company, for
aggregate consideration of $15,000,000, shares of the Company's common stock
(the "Shares"), without par value (the "Common Stock"), as set forth herein.
The Shares issuable hereunder are entitled to the benefits of a Registration
Rights Agreement between the Company and the Purchasers dated as of the date
hereof and attached hereto as Exhibit A (the "Registration Rights Agreement").
B. After consummation of the transactions contemplated hereby, EIS initially
shall own Shares representing 19.9% of the Common Stock, and Bioject initially
shall own Shares representing 80.1% of the Common Stock.
C. The Stockholders and the Company desire to set forth herein certain
provisions relating to the governance of the Company and transfer of shares of
Common Stock and/or certain securities convertible, exchangeable or
exercisable for or into shares of Common Stock.
A G R E E M E N T:
The parties agree as follows:
ARTICLE I
DEFINITIONS; AUTHORIZATIONS; CLOSINGS
1.1 Defined Terms. As used herein, the terms below shall have the following
meanings:
"Affiliate" shall have the meaning set forth in Section 12b-2 of the
Securities Exchange Act of 1934, as amended.
"Company Securities" shall mean the Common Stock and any additional share of
Common Stock issued or issuable to any Stockholder upon the conversion,
exchange or exercise of any other security or right.
"Fully Diluted Common Stock" shall mean all of the Common Stock of the
Company, assuming conversion, exercise or exchange of all outstanding
convertible, exchangeable or exercisable securities, options, warrants and
similar instruments for or into Common Stock.
"License Agreement" shall mean that agreement dated as of the date hereof by
and between Elan Corporation, plc, an Irish public limited company ("Elan")
and the Company in connection with the licensing of Glucose Monitor Technology
(as defined therein) by Elan to the Company.
"Permitted Transferee" shall mean (i) any Affiliate of EIS or Bioject, as
applicable, or (ii) any other Person who acquires Company Securities from EIS
or Bioject in a transaction that is exempt from registration under the
Securities Act of 1933, as amended, other than under Rule 144 thereunder or a
similar rule or regulation providing for the sale of securities to the public.
"Person" shall mean an individual, partnership, joint venture, corporation,
trust or unincorporated organization, a government or any department, agency
or political subdivision thereof, or any other entity.
"Restricted Securities" shall mean Company Securities issued pursuant to this
Agreement, including Common Stock and any securities convertible, exercisable
or exchangeable for or into Common Stock or any other shares of Common Stock
hereafter acquired by EIS or Bioject.
"Stockholder" means any of EIS, Bioject, any Permitted Transferee or any other
Person who subsequently becomes bound by this Agreement as a holder of Company
Securities.
1.2 Authorizations; Etc. The Company has authorized the issuance (i) to EIS
of 199,000 shares of Common Stock, and (ii) to Bioject of 801,000 shares of
Common Stock issuable as provided in Section 1.3 hereof.
1.3 Closings. (a) The closing of the transactions contemplated hereby (the
"Closing") shall occur on the date hereof, at the offices of counsel to EIS in
New York, New York, or such other place as the parties may agree.
(b) As a condition of the Closing of the transactions contemplated hereby, the
Company shall produce its certificate of incorporation and by-laws for review
and approval (which approval shall not be unreasonably withheld) by EIS.
(c) At the Closing, (x) the Company shall issue and sell to EIS, and EIS
shall purchase from the Company, upon the terms and subject to the conditions
set forth herein, for an aggregate purchase price of $2,985,000, 199,000
shares of Common Stock and (y) the Company shall issue and sell to Bioject,
and Bioject shall purchase from the Company, upon the terms and conditions set
forth herein, for an aggregate purchase price of $12,015,000, 801,000 shares
of Common Stock.
(d) At the Closing, the parties hereto shall execute and deliver to each
other, as applicable:
(1) (i) certificates in respect of the Common Stock described above; (ii) the
Registration Rights Agreement (together with this Agreement, the "Newco
Transaction Documents"); and
(2) certificates as to the incumbency of the officers executing the Newco
Transaction Documents and such other matters as shall be customary for
transactions of this type and as may be reasonably requested by each of the
parties hereto of the other.
In addition, at the Closing, the Company shall cause to be delivered to the
Purchasers an opinion of counsel, in a form reasonably satisfactory to the
Purchasers, covering the due authority of the Company and the due
authorization of the Newco Transaction Documents, the due issuance of the
Securities, no violations of law or charter documents and other customary
matters, which opinion may contain customary exceptions.
(e) The Shares will be issued under an exemption or exemptions from
registration under the Securities Act; accordingly, the certificates
evidencing the Shares shall, upon issuance, contain the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT UNDER ANY CIRCUMSTANCES BE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT.
The Common Stock is afforded the rights and benefits as described in the
Registration Rights Agreement.
1.4 Additional Funding.
(a) Each of the Stockholders agrees to provide additional funding to the
Company (the "Additional Funding") following the earlier of the date Bioject's
shareholders approve the issuance of Preferred Stock to EIS and February 1,
1998; provided, that (i) the Company's board of directors shall determine, in
good faith, that such funds are required at such time for development of the
first product or products based upon Glucose Monitor Technology (as defined in
the License Agreement, the "Products") and the Glucose Monitor Technology, and
(ii) such development of the Products is consistent with the Company's then-
current business plan, which business plan shall have been approved by the
Company's board of directors and approved by Bioject and EIS (which approval
shall not be unreasonably withheld or delayed).
(b) The Stockholders shall be obligated to provide the additional funds in
combined increments of $1 million, which shall be provided 80.1% by Bioject,
to an aggregate maximum of $4,005,000, and 19.9% by EIS, to an aggregate
maximum of $995,000. In no event shall EIS be obligated to fund an amount in
excess of 25% of the amount of Additional Funding provided by Bioject to the
Company, and in any event, EIS's obligation to provide it's portion of the
Additional Funding shall terminate at the conclusion of the 30-month period
following the earlier of the date Bioject's shareholders approve the issuance
of Preferred Stock to EIS and February 1, 1998.
(c) It shall be a condition to the Stockholders' respective obligations to
make any Additional Funding, or payments in connection with Further
Development (as defined below), that (A) there shall be no material default or
breach by the Company of any material obligations under any of the Newco
Transaction Documents (as hereinafter defined) or any other agreement between
the Company or any of its affiliates, on the one hand, and the Stockholders or
any of their affiliates, on the other hand, (B) the Company shall have
executed and delivered to each Stockholder each document or instrument that
shall be customary and appropriate for such transaction as reasonably
determined by such Stockholder and the Company, and (C) each Stockholder shall
consent to make its own portion of such Additional Funding or Further
Development payments, which consent shall not be unreasonably withheld or
delayed.
(d) At the option of the Company's Board of Directors, the Additional Funding
shall be evidenced by Common Stock or Preferred Stock of the Company, with
such price and terms as the Board of Directors shall in good faith determine.
1.5. Further Development.
After such time, if any, as Newco has expended [confidential portion omitted]
million on research and development in connection with the research,
development and commercialization of the Products resulting from Glucose
Monitor Technology (including the Additional Funding), in the event that the
Company's board of directors shall reasonably determine in good faith that the
Company shall require further funding in order to complete such research,
development and commercialization (the "Further Development"), EIS shall
undertake to provide such funding in accordance with the following limits and
conditions:
(a) the maximum contribution which must be made by EIS under this Section
shall be [confidential portion omitted] million;
(b) EIS shall have reasonably and in good faith determined that the Further
Development funding is likely to result in the [confidential portion omitted],
as contemplated by the Company's then-current business plan;
(c) such funding shall be in minimum increments of $500,000;
(d) the Company shall have a market capitalization (if publicly held), or a
valuation as determined by a financial advisory or investment firm
satisfactory to each of Bioject and EIS (if privately held) of less than
[confidential portion omitted] million at the time of the Company's request
for such funding;
(e) such Further Development funding shall constitute senior debt of the
Company, and be evidenced by a secured promissory note issued upon terms and
conditions satisfactory to each of EIS and the Company acting reasonably,
which shall be consistent with similar "arms-length" transactions then-being
consummated in the capital markets; such promissory note to bear interest at a
rate per annum equal to [confidential portion omitted] for a term of three
years.
1.6 Representations and Warranties of the Company. The Company hereby
represents and warrants to each of the Stockholders as follows, as of the date
hereof:
(a) Organization. The Company is a corporation duly organized, validly
existing and is in good standing under the laws of Oregon, and has all the
requisite corporate power and authority to own and lease its properties, to
carry on its business as presently conducted and as proposed to be conducted
and to carry out the transaction contemplated hereby. The Company is
qualified and in good standing to do business in each jurisdiction in which
the nature of the business conducted or the property owned by it requires such
qualification, except where the failure to so qualify would not reasonably be
expected to have a material adverse effect on the business of the Company.
(b) Capitalization. (i) The authorized and outstanding shares of capital stock
of the Company as of the date hereof, are set forth on Schedule 1.6(b)(i)
hereto.
(ii) All of the outstanding shares of capital stock of the Company have been
issued in accordance with applicable laws and regulations governing the sale
and purchase of securities and none of such shares carries preemptive or
similar rights.
(c) Authorization. The execution, delivery and performance by the Company of
this Agreement and each of the Transaction Documents, have been duly
authorized by all requisite corporate actions; and this Agreement and each
other of the Transaction Documents have been duly executed and delivered by
the Company and are the valid and binding obligation of the Company,
enforceable against it in accordance with their respective terms.
(d) No Conflicts. The execution, delivery and performance by the Company of
this Agreement and the other Newco Transaction Documents, the issuance, sale
and delivery of the Common Stock (and the issuance of any Common Stock
issuable upon the conversion of any convertible security, and compliance with
the provisions hereof by the Company, will not (a) violate any provision of
applicable law, statute, rule or regulation applicable to the Company or any
ruling, writ, injunction, order, judgment or decree of any court, arbitrator,
administrative agency or other governmental body applicable to the Company or
any of their respective properties or assets or (b) conflict with or result in
any breach of any of the terms, conditions or provisions of, or constitute
(with notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation
of, any Encumbrance (as defined below) upon any of the properties or assets of
the Company under, the charter or organizational documents of either or any
material contract to which the Company is a party, except where such
violation, conflict or breach would not, individually or in the aggregate,
have a material adverse effect on the Company. As used herein, "Encumbrance"
shall mean any liens, charges, encumbrances, equities, claims, options,
proxies, pledges, security interests, or other similar rights of any nature.
(e) Approvals. No permit, authorization, consent or approval of or by, or
any notification of or filing with, any person or entity (governmental or
private) is required in connection with the execution, delivery or performance
of this Agreement by the Company.
(f) Authorization of the Shares; Etc. The issuance, sale and delivery by the
Company of the Shares, as contemplated by the Newco Transactions Documents,
have been duly authorized by all requisite corporate action of the Company,
and such securities, when issued as contemplated hereby, will be validly
issued and outstanding, fully paid and nonassessable and not subject to
preemptive or any other similar rights of the stockholders of the Company or
others.
(g) Disclosure. To the best of its knowledge, this Agreement and the other
Newco Transaction Documents do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
contained herein and therein not misleading.
1.7 Representations and Warranties of the Stockholders. Each of EIS and
Bioject hereby represent and warrant to the Company as follows:
(a) Organization. Each of the Stockholders is a corporation duly organized,
validly existing and, if applicable, in good standing under the laws of its
jurisdiction of organization and has all the requisite corporate power and
authority to own and lease its properties, to carry on its business as
presently conducted and as proposed to be conducted and to carry out the
transactions contemplated hereby.
(b) Authority. Each of the Stockholders has full legal right, power and
authority to enter into this Agreement and the Newco Transaction Documents and
to perform their respective obligations hereunder and thereunder, which have
been duly authorized and by all requisite corporate action. This Agreement is
the valid and binding obligation of the Stockholders, enforceable against them
in accordance with its terms.
(c) No Conflicts. The execution, delivery and performance by each of the
Stockholders of this Agreement and the other Newco Transaction Documents,
purchase of the Common Stock (and the purchase of any Common Stock issuable
upon the conversion or exercise of any convertible or exchangeable security),
and compliance with the provisions hereof by the Stockholders will not (a)
violate any provision of applicable law, statute, rule or regulation
applicable to the Stockholders or any ruling, writ, injunction, order,
judgment or decree of any court, arbitrator, administrative agency or other
governmental body applicable to the Stockholders or any of their respective
properties or assets or (b) conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute (with notice or lapse of
time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of, any
Encumbrance (as defined below) upon any of the properties or assets of the
Stockholders under, the charter or organizational documents of either or any
material contract to which the Stockholders are a party, except where such
violation, conflict or breach would not, individually or in the aggregate,
have a material adverse effect on the Stockholders. As used herein,
"Encumbrance" shall mean any liens, charges, encumbrances, equities, claims,
options, proxies, pledges, security interests, or other similar rights of any
nature
(d) Approvals. No permit, authorization, consent or approval of or by, or any
notification of or filing with, any person or entity (governmental or private)
(collectively, "Approval") is required in connection with the execution,
delivery or performance of this Agreement by the Stockholders; nor is any
Approval required by the Stockholders in order to fulfill their respective
obligations hereunder or under any of the Newco Transaction Documents.
(e) Investment Representations. Each of the Stockholders is capable of
evaluating the merits and risks of their respective investment in the Company.
None of the Stockholders have been formed solely for the purpose of making
this investment and are acquiring the Securities and, as applicable, the
underlying Common Stock for investment for their own account, not as a nominee
or agent, and not with the view to, or for resale in connection with, any
distribution of any part thereof. The Stockholders understand that the Shares
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or applicable state and other securities laws by reason of
a specific exemption from the registration provisions of the Securities Act
and applicable state and other securities laws, the availability of which
depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of such Stockholders' representations as expressed
herein. The Stockholders understand that no public market now exists for any
of the Shares and that there is no assurance that a public market will ever
exist for the Shares.
ARTICLE II
BOARD OF DIRECTORS
2.1 Board of Directors. From and after the date hereof, and until such time
as the Company's securities are registered under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or listed on a stock exchange or
quoted on an electronic quotation system, each of EIS and Bioject and their
respective Permitted Transferees shall use its best efforts (including voting
all of their shares of Common Stock) to cause the board of directors of the
Company to consist of five directors, designated as set forth below; provided
that the parties shall make such adjustments in the arrangements required by
this Section 2.1 as the board of directors shall deem necessary and proper in
connection with obtaining material investments from unaffiliated third
parties:
(a) Designation of Directors. EIS shall be entitled to designate one
director (the "EIS Director") and Bioject shall be entitled to designate four
directors (the "Bioject Directors"). The Company's by-laws shall not provide
for a board of directors that contains staggered terms. As of the date
hereof, the Company shall have a five-member board.
(b) Committees of the Board of Directors and Subsidiaries. The rights to
designate directors provided in Section 2.1(a) shall also apply,
proportionally, to any committees of the board of directors and to any board
of directors of any Subsidiary of the Company.
2.2 Removal. In the event that (a) EIS shall request, by written notice
thereof to Bioject, that an EIS Director be removed, or (b) Bioject shall
request, by written notice thereof to EIS, that a Bioject Director be removed,
then each Stockholder shall take all actions required by Section 2.4 to effect
such result. If the majority of the Company's board of directors shall object
to the appointment of any director on a commercially reasonable basis, such
director shall be removed (or not elected) and the party that designates such
director shall designate another director.
2.3 Vacancies. In the event that a vacancy is created on the board of
directors at any time by the death, disability, retirement, resignation or
removal of any director, or otherwise there shall exist or occur any vacancy
on the board, each of EIS and Bioject and each of their respective Permitted
Transferees hereby agrees to cause the director(s) designated by it and then
serving (subject to each such person's fiduciary duties as a director) to vote
for that individual designated to fill such vacancy and serve as a director by
whichever of the Stockholders that had designated (pursuant to Section 2.1
hereof) the director whose death, disability, retirement, resignation or
removal resulted in such vacancy on the board; provided, however, that such
other individual so designated may not previously have been a director of the
Company who was removed for cause from the board.
2.4 Covenant to Vote. (a) Each of EIS and Bioject and each of their
respective Permitted Transferees hereby agrees to take or assist such other
Persons to take all actions necessary to call, or cause the Company or the
appropriate officers or directors of the Company to call, a special or annual
meeting of stockholders of the Company and to vote all shares of Common Stock
owned or held of record by such Person at any such annual or special meeting
in favor of, or to consent by written consent in lieu of any such meeting to,
the election of a board of directors consistent with, and the taking of any
other action to effect the intent of, this Article II. In addition, each of
EIS and Bioject and each of their respective Permitted Transferees agrees to
vote, or consent with respect to, the shares of Common Stock owned or held of
record by such Person, or over which such Person has voting control, upon any
other matter arising under this Agreement submitted to a vote or consent of
the Company's stockholders in a manner so as to implement the terms of this
Agreement.
(b) Approval of a majority of the board shall be required for any and all
material determinations regarding the Company, including (i) acquisition of
material assets (including without limitation, intellectual property), (ii)
incurrence of debt or liens, (iii) payment of dividends or distributions in
respect of or redemption of equity, (iv) disposition of material assets and
changes in business lines or material Company budgets, or (v) any other
transaction not in the ordinary course of business.
2.5 Termination of Voting Agreements. The covenants and agreements
contained in this Article II shall terminate upon the earlier of (i) the tenth
anniversary of the date of this Agreement and (ii) the date that either (1)
EIS and its Permitted Transferees and (2) Bioject and its Permitted
Transferees each own in the aggregate Securities representing less than 5% of
the Fully Diluted Common Stock of the Company.
ARTICLE III
TRANSFERS OF RESTRICTED SECURITIES
3.1 General. From and after the date hereof, and until such time as the
Company's securities are registered under the Exchange Act, or listed on a
stock exchange or quoted on an electronic quotation system, no Stockholder
shall, directly or indirectly, sell, assign, pledge, encumber, hypothecate or
otherwise transfer (in each case, a "Transfer") any Company Securities except
in accordance with this Agreement. The Company shall not, and shall not
permit any transfer agent or registrar for the Company Securities to, transfer
upon the books of the Company any Company Securities from any Stockholder to
any Transferee (as hereinafter defined), in any manner, except in accordance
with this Agreement, and any purported transfer not in compliance with this
Agreement shall be void.
3.2 Legends; Securities Subject to this Agreement. In the event a
Stockholder shall Transfer any Restricted Securities (including any such
Restricted Securities acquired after the date hereof) to any Person (all
Persons acquiring Restricted Securities from a Stockholder, as described in
this Article III, regardless of the method of transfer, shall be referred to
collectively as "Transferees" and individually as a "Transferee") in
accordance with this Agreement, such securities shall nonetheless bear legends
as provided in this Agreement and in Section 6.1 hereof, as the case may be;
provided, however, that the provisions of this Section 3.2 shall not apply in
respect of a sale of Restricted Securities in a registered public offering
under the Securities Act or pursuant to Rule 144, or any successor rule under
the Securities Act.
3.3 No Violations or Breach. Notwithstanding any other provision of this
Agreement, no Stockholder shall, directly or indirectly, Transfer any
Restricted Securities at any time if such action would constitute a violation
of any federal or state securities or blue sky laws or a breach of the
conditions to any exemption from registration of Restricted Securities under
any such laws or a breach of any undertaking or agreement of such Stockholder
entered into pursuant to such laws or in connection with obtaining an
exemption thereunder.
3.4 Transferee Bound. No Stockholder shall effect a Transfer of Restricted
Securities unless such Transferee shall agree to be bound by this Agreement,
and shall further agree to permit EIS or Bioject, as applicable, to act on
their behalf in accordance with the provisions of this Agreement.
ARTICLE IV
RIGHT OF FIRST OFFER
4.1 Transfers by the Stockholders. (a) Notice of Intention. If at any
time a Stockholder shall desire to Transfer any Restricted Securities owned by
it (such Stockholder desiring to Transfer such securities being referred to
herein as a "Selling Stockholder"), in any transaction or series of related
transactions, then such Selling Stockholder shall deliver prior written notice
of its desire to Transfer (a "Notice of Intention") to (i) the Company and
(ii) the party who is not the Selling Stockholder (for purposes of this
Article IV, the party who is "not the Selling Stockholder" shall mean Bioject
if the Selling Stockholder is the EIS or an EIS Transferee, and EIS if the
Selling Stockholder is Bioject or a Bioject Transferee), and (iii) any
Permitted Transferees, as applicable, setting forth such Selling Stockholder's
desire to make such Transfer, the number and class of Company Securities
proposed to be transferred (the "Offered Shares") and the proposed form of
transaction (the "Transaction Proposal"), together with any documentation
relating thereto and the price at which such Selling Stockholder proposes to
Transfer the Offered Shares (the "Offer Price"). The "Right of First Offer"
provided for in this Article IV shall be subject to any "Tag-Along Right"
benefitting a Stockholder which may be provided for by Article V, subject to
the exceptions set forth therein. The parties shall make such adjustments in
the arrangements required by this Article IV as the board of directors shall
deem necessary and proper in connection with obtaining material investments
from unaffiliated third parties.
(b) Notice of Exercise. Upon receipt of the Notice of Intention, the party
who is not the Selling Stockholder shall have the right to purchase at the
Offer Price the Offered Shares, exercisable by the delivery of notice to the
Selling Stockholder (the "Notice of Exercise"), with a copy to the Company
within 10 business days from the date of receipt of the Notice of Intention.
If no such Notice of Exercise has been delivered by the party who is not the
Selling Stockholder within such 10 business-day period, or such Notice of
Exercise does not relate to all the Offered Shares covered by the Notice of
Intention, then the Selling Stockholder shall be entitled to Transfer the
Offered Shares to the intended Transferee.
(c) Obligation to Sell. In the event that the party who is not the Selling
Stockholder exercises its right to purchase Offered Shares in accordance with
Section 4.1(b), then the Selling Stockholder must sell the Offered Shares to
such party, in the amounts set forth in the Notice of Intention, after not
less than five business and not more than 15 business days from the date of
the delivery of the Notice of Exercise.
(d) Termination. The rights and obligations of each of the Stockholders
pursuant to the Right of First Offer provided herein shall terminate with
respect to each such party on the earlier of (i) the tenth anniversary of the
date hereof and (ii) with respect to such party's rights, the first date that
EIS on the one hand, and Bioject on the other, plus, in each case, their
respective Permitted Transferees, beneficially own, in the aggregate, Company
Securities representing less than 2 1/2% of the Fully Diluted Common Stock
and, with respect to each such group's obligations, the first date that the
other group (including Permitted Transferees) beneficially own, in the
aggregate, Company Securities representing less than 2 1/2% of the Fully
Diluted Common Stock and (iii) the date the Company's common stock is
registered under the Exchange Act or listed on a stock exchange or quoted
on an electronic quotation system.
4.2 Closing. At the closing of the purchase of Offered Shares (scheduled in
accordance with Section 4.1(c)), the Selling Stockholder shall deliver
certificates evidencing the Offered Shares being sold, duly endorsed, or
accompanied by written instruments of transfer in form reasonably satisfactory
to the party who is not the Selling Stockholder, duly executed by the Selling
Stockholder, free and clear of any adverse claims, against payment of the
purchase price therefor in cash, and such other customary documents as shall
be necessary in connection therewith.
ARTICLE V
TAG-ALONG RIGHTS
5.1 Tag-Along Procedures. For purposes of this Section "Common Stock" shall
include Common Stock underlying securities convertible thereto; provided that
the parties shall make such adjustments in the arrangements required by this
Section 5.1 as the board of directors shall deem necessary and proper in
connection with obtaining material investments from unaffiliated third
parties.
(a) Tag-Along Right. Subject to Section 5.3, any one Stockholder (the
"Transferring Stockholder") shall not Transfer (either directly or
indirectly), in any one transaction or series of related transactions, to any
Person or group of Persons, Company Securities representing, in the aggregate,
more than 5% of the Common Stock unless the terms and conditions of such
Transfer shall include an offer to the other Stockholders (the "Remaining
Stockholders"), at the same price and on the same terms and conditions as the
Transferring Stockholder has agreed to sell its Company Securities.
(b) Notice. In the event a Transferring Stockholder proposes to Transfer
any Common Stock in a transaction subject to this Section 5.1, it shall
notify, or cause to be notified, the Remaining Stockholders in writing of each
such proposed Transfer. Such notice shall set forth: (i) the name of the
transferee and the number of shares of Common Stock proposed to be
transferred, (ii) the proposed amount and form of consideration and terms and
conditions of payment offered by the transferee (the "Transferee Terms") and
(iii) that the transferee has been informed of the "Tag-Along Right" provided
for in this Section 5.1, if such right is applicable, and has agreed to
purchase shares of Common Stock from the Transferring Stockholder in
accordance with the terms hereof.
(c) Exercise. The Tag-Along Right may be exercised by the Remaining
Stockholders by delivery of a written notice to the Transferring Stockholder
(the "Tag-Along Notice") within five business days following receipt of the
notice specified in the preceding subsection. The Tag-Along Notice shall
state the number of shares of Common Stock owned by the Remaining Stockholder
which the Remaining Stockholder wishes to include in such Transfer; provided,
however, that without the written consent of the Transferring Stockholder, the
number of shares belonging to the Remaining Stockholder included in such
Transfer may not be greater than such Remaining Stockholder's percentage
beneficial ownership of Common Stock (on a fully diluted basis) multiplied by
the total number of shares of common stock to be sold by both the transferring
stockholder and all remaining stockholders. Upon receipt of a Tag-Along
Notice, the Transferring Stockholder shall be obligated to transfer at least
the entire number of shares of Common Stock set forth in the Tag-Along Notice
to the Transferee on the Transferee Terms; provided, however, that the
Transferring Stockholder shall not consummate the purchase and sale of any
shares hereunder if the Transferee does not purchase all shares. If no Tag-
Along Notice has been delivered to the Transferring Stockholder prior to the
expiration of the five-day period referred to above and if the provisions of
this Section have been complied with in all respects, the Transferring
Stockholder shall have the right for a 60 day calendar day period to Transfer
Common Stock to the Transferee on the Transferee Terms without further notice
to any other party, but after such 60-day period, no such Transfer may be made
without again giving notice to the Remaining Stockholders of the proposed
Transfer and complying with the requirements of this Article V.
5.2 Closing. At the closing of any Transfer of Common Stock subject to this
Article V, the Transferring Stockholder, and the Remaining Stockholder, in the
event such Tag-Along Right is exercised, shall deliver certificates evidencing
such shares of Common Stock as have been Transferred by each, duly endorsed,
or accompanied by written instruments of transfer in form reasonably
satisfactory to the Transferee, free and clear of any adverse claim, against
payment of the purchase price therefor.
5.3 Exceptions. Notwithstanding the foregoing, this Article V shall not
apply to any sale of Common Stock pursuant to an effective registration
statement under the Securities Act in a bona fide public offering, sales made
in compliance with Rule 144, or any successor rule under the Securities Act.
5.4 Termination. This Article V shall terminate on earlier of (i) the
seventh anniversary of the date hereof or (ii) the first date that either EIS
or Bioject beneficially own shares of Common Stock representing less than 2
1/2% of the Fully Diluted Common Stock or (iii) the date the Company's common
stock is registered under the Exchange Act or listed on a stock exchange or
quoted on an electronic quotation system.
ARTICLE VI
MISCELLANEOUS
6.1 Administrative Services Agreement. In consideration of EIS's agreement
to invest in the Company, as soon as practicable after the date hereof, the
Company and Bioject shall enter into an administrative services and support
agreement (which shall be reasonably satisfactory to EIS) which shall contain
provisions to the effect that Bioject shall provide commercially reasonable
and customary support and administrative services to the Company in connection
with the performance of the Company's obligations hereunder and under the
License Agreement.
6.2 Endorsement of Stock Certificates. Each of the Stockholders hereby
agrees that, in addition to any legends required by any other agreement, each
outstanding certificate representing shares of Company Securities subject to
this Agreement shall bear an endorsement reading substantially as follows
until the restrictions (including without limitation, the transfer
restrictions) with respect to such Company Securities are no longer effective:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER
RESTRICTIONS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF OCTOBER 15,
1997, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICE, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF WITHOUT COMPLYING WITH THE TERMS AND
CONDITIONS OF SUCH AGREEMENTS.
6.3 Term. Except as otherwise provided herein, this Agreement shall
terminate upon the sale of all Company Securities now owned by EIS and Bioject
(or their respective Permitted Transferees) in compliance with the provisions
hereof to parties not bound hereby, as provided herein.
6.4 Injunctive Relief. The parties hereto hereby agree and acknowledge that
it will be impossible to measure in money the damages that would be suffered
if any party should breach any obligation, covenant or representation herein
imposed or made, and that, in the event of such breach, a non-breaching party
will be irreparably damaged and will not have an adequate remedy at law. Any
such non-breaching party shall, therefore, be entitled to injunctive relief,
including specific performance, to enforce such obligations, and if any action
should be brought in equity to enforce any of the provisions of this
Agreement, none of the other parties hereto shall raise the defense that there
is an adequate remedy at law.
6.5 Notices. All notices, other communications or documents provided for or
permitted to be given hereunder, shall be made in writing and shall be given
either personally by hand-delivery, by telex or facsimile transmission, by
mailing the same in a sealed envelope, certified first-class mail, postage
prepaid, return receipt requested, or by air courier guaranteeing overnight
delivery:
(i) if to the Company or Bioject, to:
Bioject JV Subsidiary Inc.
or
Bioject Medical Technologies Inc.
7620 S.W. Bridgeport Road
Portland, Oregon 97224
Telecopier: 503-620-6431
Attention: President
with a copy to:
Bogle & Gates P.L.L.C.
Two Union Square
601 Union Street
Seattle, Washington 98101-2346
Telecopier:206-620-2660
Attention: Christopher Barry
(ii) if to EIS, to:
Elan International Services, Ltd.
Flatts Smiths SL04
Bermuda
Telecopier: (441) 292-2224
Attention: President
with a copy to:
Brock Fensterstock Silverstein McAuliffe & Wade LLC
153 East 53rd Street
New York, New York 10022
Telecopier: (212) 371-5500
Attention: David Robbins
Each Stockholder, by written notice given to the Company in accordance with
this Section 6.5 may change the address to which notices, other communication
or documents are to be sent to such Stockholder. All notices, other
communications or documents shall be deemed to have been duly given when
received. Whenever pursuant to this Agreement any notice is required to be
given by any Stockholder to any other Stockholder or Stockholders, such
Stockholder may request from the Company a list of addresses of all
Stockholders of the Company, which list shall be promptly furnished to such
Stockholder.
6.6 Assignment. Except as expressly permitted hereunder, neither this
Agreement nor any of the rights or obligations hereunder may be assigned by
any party hereto without the prior written consent of the other parties
hereto. Subject to the foregoing, this Agreement shall inure to the benefit
of and be binding upon the parties and successors and assigns of each of the
parties. If any Stockholder shall acquire any Restricted Securities in any
manner, whether by operation of law or otherwise, such Restricted Securities
shall be held subject to all of the terms of this Agreement.
6.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon without regard to the
principles of conflicts of laws.
6.8 Headings. The headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part of this Agreement.
6.9 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability
of any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
6.10 Amendments and Waiver. No provision of this Agreement may be amended,
nor performance of any covenant or agreement waived, except by a written
instrument executed by each of the Company, EIS and Bioject. Neither a
failure nor a delay in exercising any right, power or privilege of a party
hereunder shall operate as a waiver of, or a consent to the modification of,
the terms hereof unless given by that party in writing. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any preceding or succeeding breach.
6.11 Inspection. So long as this Agreement shall be in effect, this
Agreement shall be made available for inspection by any stockholder of the
Company at the principal offices of the Company.
6.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same Agreement.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.
Bioject JV Subsidiary Inc.
By:/s/ James C. O'Shea
Name: James C. O'Shea
Title: President
Bioject Medical Technologies Inc.
By:/s/ James C. O'Shea
Name: James C. O'Shea
Title: President
Elan International Services, Ltd.
By:/s/ Kevin Insley
Name: Kevin Insley
Title: President and Chief Financial Officer
EXHIBIT 10.46
BIOJECT JV SUBSIDIARY INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of October 15, 1997, by and
among Bioject JV Subsidiary Inc., an Oregon corporation (the "Company"), and
Elan International Services, Ltd., a Bermuda corporation ("EIS").
R E C I T A L S:
A.Pursuant to a Subscription and Stockholders Agreement (the "Subscription
Agreement") dated as of the date hereof, EIS has acquired certain shares of
common stock without par value (the "Common Stock") of the Company.
B. The closing under the Subscription Agreement has occurred on the date
hereof; it being a condition to such closing that the parties execute and
deliver this Agreement.
C. The parties desire to set forth herein their agreement related to the
granting of certain registration rights to the Holders (as defined below) of
any Common Stock or securities convertible into Common Stock.
A G R E E M E N T:
The parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
"Affiliate" of any Person shall mean any other Person controlling, controlled
by or under common control with such particular Person. In the case of a
natural Person, his Affiliates include members of such Person's immediate
family, natural lineal descendants of such Person or a trust for the exclusive
benefit of such Person and his immediate family and natural lineal
descendants.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Holders", "holders" or "Holders of Registrable Securities" shall mean EIS and
any Person who shall have acquired Registrable Securities from EIS as
permitted herein pursuant to Section 9 hereof, either individually or jointly
as the case may be.
"Person" shall mean an individual, a partnership, a company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental quasi-governmental entity or any department, agency or
political subdivision thereof.
"Registrable Securities" means (i) any Common Stock issued or issuable under
the Subscription Agreement, (ii) any Common Stock issued or issuable upon
conversion of or in connection with securities convertible thereinto, and
(iii) any Common Stock issued or issuable in respect of the securities
referred to in clause (ii) above upon any stock split, stock dividend,
recapitalization or similar event; excluding in all cases, however, any
Registrable Securities sold by a Person in a transaction (including a
transaction pursuant to a registration statement under this Agreement and
transaction pursuant to Rule 144 promulgated under the Securities Act) in
which registration rights are not transferred pursuant to Section 9 hereof.
The terms "register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act, and the declaration or ordering of the effectiveness of
such registration statement.
"Registration Expenses" shall mean all expenses, other than Selling Expenses,
incurred by the Company in complying with Sections 2 or 3 hereof, including
without limitation, all registration, qualification and filing fees, exchange
listing fees, printing expenses, escrow fees, fees and disbursements of
counsel for the Company, blue sky fees and expenses, the expense of any
special audits incident to or required by any such registration and the
reasonable fees and disbursements, not to exceed $10,000 in the aggregate, of
one counsel for the Holders, such counsel to be selected by Holders holding a
majority of the Registrable Securities held by the Holders and included in
such registration.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling commissions
and stock transfer taxes applicable to the securities registered by the
Holders and the costs of any accountants, counsel or other experts retained by
the Holders.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. Demand Registrations. (a) Requests for Registration. Any Holder which
holds Registrable Securities representing at least the majority of the
Registered Securities then outstanding has the right at any time from and
after the earlier to occur of the (i) Company's Initial Public Offering of
securities (an "IPO"), if any and (ii) third anniversary of the date hereof,
to request registration under the Securities Act of all or part of their
Registrable Securities on Form S-1, S-2 or S-3 (if available) or any similar
registration (each, a "Demand Registration"), such form to be selected by the
Company, it being understood that the Company is not required to file a
registration statement with respect to common stock not deemed outstanding
within the meaning of General Instruction I.B.3. of Form S-3. Each written
request for a Demand Registration (as defined below) shall specify the
approximate number of Registrable Securities requested to be registered.
Within 10 days after receipt of any such request, the Company will give
written notice of such requested registration to all other Holders of
Registrable Securities and, if they request to be included in such
registration, the Company shall include such Holders' Registrable Securities
in such offering if they have responded affirmatively within 10 days after the
receipt of the Company's notice. The Holders in aggregate will be entitled to
request two Demand Registrations. A registration will not count as one of the
permitted Demand Registrations until it has become effective (unless such
Demand Registration has not become effective due solely to the fault of the
Holders requesting such registration, including a request by such Holders
that such registration be withdrawn). In the event that the Holders shall
exercise their right to Demand Registration under this section, and such
Demand Registration shall be underwritten, the Company and the Holders
exercising such right shall bear the costs associated with the underwritten on
an equal basis. The Company shall pay all Registration Expenses in connection
with any Demand Registrations which are not underwritten in accordance with
the terms hereof.
(b) Priority on Demand Registrations. If a Demand Registration is an
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such
offering, exceeds the number of Registrable Securities and other securities,
if any, which can be sold in such offering without adversely affecting the
marketability of the offering, the Company will include in such registration:
(i) first, the Registrable Securities requested to be included in such
registration by the Holders (or, if necessary, such Registrable Securities pro
rata among the Holders thereof based upon the number of Registrable Securities
owned by each such Holder) together with any securities held by third parties
(x) who may become Holders under this Agreement or (y) holding a similar,
previously granted right to be included in such registration; and
(ii) thereafter, other securities requested to be included in such
registration.
(c) Restrictions on Demand Registrations. The Company may postpone for up to
six months in any 12 month period, the filing or the effectiveness of a
registration statement for a Demand Registration if the Company determines in
good faith that such Demand Registration would reasonably be expected to have
a material adverse effect on any proposal or plan by the Company to engage in
any financing, acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or
similar transaction or would require disclosure of any information that the
board of directors of the Company determines in good faith the disclosure of
which would be detrimental to the Company; provided, that in such event, the
Holders initially requesting such Demand Registration will be entitled to
withdraw such request and, if such request is withdrawn, such Demand
Registration will not count as one of the permitted Demand Registrations
hereunder and the Company will pay any Registration Expenses in connection
with such withdrawn registration.
(d) Selection of Underwriters. The Holders will have the right to select the
investment banker(s) and manager(s) to administer an offering pursuant to a
Demand Registration, subject to the Company's approval, which will not be
unreasonably withheld.
(e) Other Registration Rights. Except as provided in this Agreement, so long
as any Holder owns any Registrable Securities, the Company will not grant to
any Persons the right to request the Company to register any equity securities
of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, which is in conflict with the rights granted
to the Holders hereunder, without the prior written consent of the Holders of
at least 50% of the Registrable Securities held by the Holders; it being
understood that the Company may grant rights to other Persons to (i)
participate in Piggyback Registrations so long as such rights are subordinate
or pari passu to the rights of the holders of Registrable Securities with
respect to such Piggyback Registrations and (ii) request registrations so long
as the Holders of Registrable Securities are entitled to participate in any
such registrations with such Persons pro rata on the basis of the number of
shares owned by each such Holder.
3. Piggyback Registrations. (a) Right to Piggyback. At any time the Company
shall propose to register Common Stock under the Securities Act (other than in
a registration on Form S-3 relating to sales of securities to participants in
a Company dividend reinvestment plan, S-4 or S-8 or any successor form or in
connection with an acquisition or exchange offer or an offering of securities
solely to the existing stockholders or employees of the Company) (each, a
"Piggyback Registration"), the Company will give prompt written notice to all
Holders of Registrable Securities of its intention to effect such a
registration and, subject to Section 3(b) and the other terms of this
Agreement, will include in such registration all Registrable Securities which
are permitted under applicable securities laws to be included in the Form of
registration statement selected by the Company and with respect to which the
Company has received written requests for inclusion therein within 15 days
after the receipt of the Company's notice.
(b) Priority on Piggyback Registrations. If a Piggyback Registration is an
underwritten registration of Common Stock, and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without adversely affecting the marketability of the
offering, the Company will include in such registration:
(i) the securities the Company proposes to sell;
(ii) the Registrable Securities requested to be included in such registration
by the Holders and any securities requested to be included in such
registration by any other Person, pro rata among the Holders of such
Registrable Securities and such other Persons, on the basis of the number of
shares owned by each of such Holders subject to the rights of such other
Persons under agreements existing as of the date hereof; and
(iii) thereafter, other securities requested to be included in such
registration.
The Holders of any Registrable Securities included in such a registration must
execute an underwriting agreement in form and substance satisfactory to the
managing underwriters.
(c) Right to Terminate Registration. If, at any time after giving written
notice of its intention to register any of its securities as set forth in
Section 3(a) and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for
any reason not to register such securities, the Company may, at its election,
give written notice of such determination to each Holder of Registrable
Securities and thereupon be relieved of its obligation to register any
Registrable Securities in connection with such registration (provided that the
Company shall pay the Registration Expenses in connection therewith).
(d) Selection of Underwriters. The Company will have the right to select the
investment banker(s) and manager(s) to administer an offering pursuant to a
Piggyback Registration.
4. Expenses of Registration. Subject to the final sentence of Section 2(a),
Registration Expenses incurred in connection with all registrations pursuant
to Section 2 shall be borne by the Company. All Selling Expenses relating to
securities registered on behalf of the Holders of Registrable Securities shall
be borne by such holders. Registration expenses incurred in connection with
registration pursuant to Section 3 shall be borne by the Company and the
Holders on a pro rata basis in accordance with the number of Shares sold by
each.
5. Holdback Agreements. (a) The Company agrees (i) not to effect any public
offering, sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during
the seven days prior to and during the 90-day period beginning on the
effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten registration or
pursuant to registrations on Form S-8 or any successor form), unless the
underwriters managing the registered public offering otherwise agree, and (ii)
to use reasonable efforts to cause each holder of at least 5% (on a fully-
diluted basis) of its Common Stock, or any securities convertible into or
exchangeable or exercisable for Common Stock, purchased from the Company at
any time after the date of this Agreement (other than in a registered public
offering) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any such securities during such periods (except
as part of such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree.
(b) Each holder of Registrable Securities agrees, if requested by the
managing underwriter or underwriters in an underwritten offering of securities
of the Company, not to effect any offer, sale, distribution or transfer (or
offer or agree to do so) of Registrable Securities, including a sale pursuant
to Rule 144 (or any similar provision then effect) under the Securities Act
(except as part of such underwritten registration), during the seven-day
period prior to, and during the 90-day period (or, in the case of an IPO, 180-
day period) or such shorter period as may be agreed to by the parties hereto)
following the effective date of such Registration Statement to the extent
timely notified in writing by the Company or the managing underwriter or
underwriters.
6. Registration Procedures. Whenever the Holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to this
Agreement, the Company will use its best efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of distribution thereof, and pursuant thereto the Company will as
expeditiously as possible:
(a) subject to Section 2(c) hereof, prepare and file with the Commission a
registration statement on any form for which the Company qualifies with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will (i) furnish to the counsel selected by the Holders copies of
all such documents proposed to be filed, which documents will be subject to
the review of such counsel, and (ii) notify each holder of Registrable
Securities covered by such registration of any stop order issued or threatened
by the Commission);
(b) subject to Section 2(c) hereof, prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than nine months and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of copies of
such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as such seller may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by
such seller;
(d) use its best efforts to register or qualify such Registrable Securities
under such other securities or blue sky laws of such jurisdiction as any
seller reasonably requests and do any and all other acts and things which may
be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 6(d), (ii) subject itself to taxation
in any jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Securities, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein not
misleading, and, at the request of any such seller, the Company will prepare a
supplement of amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading; provided that the
Company shall not be required to amend the registration statement or
supplement the Prospectus for a period of up to six months if the board of
director determines in good faith that to do so would reasonably be expected
to have a material adverse effect on any proposal or plan by the Company to
engage in any financing, acquisition or disposition of assets (other than in
the ordinary course of business) or any merger, consolidation, tender offer or
similar transaction or would require the disclosure of any information that
the board of directors determines in good faith the disclosure of which would
be detrimental to the Company, it being understood that the period for which
the Company is obligated to keep the Registration Statement effective shall be
extended for a number of days equal to the number of days the Company delays
amendments or supplements pursuant to this provision. Upon receipt of any
notice pursuant to this section 6(e) Holders shall suspend all offers and
sales of securities of the Company and all use of any prospectus until advised
by the Company that offers and sales may resume, and shall keep confidential
the fact and content of any notice given by the Company pursuant to this
section 6(e)
(f) cause all such Registrable Securities to be listed on each securities
exchange on which similar securities issued by the Company are then listed
and, if not so listed, to be listed on the NASD automated quotation system
and, if listed on the NASD automated quotation system, use its best efforts to
secure designation of all such Registrable Securities covered by such
registration statement as a NASDAQ National market system security within the
meaning of Rule 11Aa2-1 of the Commission or, failing that, to secure NASDAQ
authorization for such Registrable Securities and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register as such with respect to such Registrable Securities with the NASD;
(g) provide a transfer agent and registrar for all such Registrable Securities
not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting agreements in
customary form) and take all such other actions as the holders of a majority
of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including without limitation, effecting a stock split
or a combination of shares);
(i) make available for inspection by a representative of the Holders of
Registrable Securities included in the registration statement, any underwriter
participating in any disposition pursuant to such registration statement and
any attorney, accountant or other agent retained by any such seller or
underwriter all pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonable requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(j) otherwise use its reasonable efforts to comply with all applicable rules
and regulations of the Commission, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period
of at least 12 months beginning with the first day of the Company's first full
calendar quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification
of any common stock included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order; and
(l) obtain a so-called "cold comfort" letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters.
7. Indemnification. (a) The Company agrees to indemnify, to the fullest
extent permitted by applicable law, each Holder of Registrable Securities, its
officers and directors and each Person who controls such Holder (within the
meaning of the Securities Act) against all losses, claims, damages,
liabilities, expenses or any amounts paid in settlement of any litigation,
investigation or proceeding commenced or threatened (collectively, "Claims")
to which each such indemnified party may become subject under the Securities
Act insofar as such Claim arose out of (i) any untrue or alleged untrue
statement of material fact contained, on the effective date thereof, in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or (ii) 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, except insofar as the same are
caused by or contained in any information furnished in writing to the Company
by such holder expressly for use therein or by such holder's failure to
deliver a copy of the registration statement or prospectus or any amendments
or supplements thereto after the Company has furnished such holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company will indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning
of the Securities Act) to the same extent as provided above with respect to
the indemnification of the holders of Registrable Securities.
(b) In connection with any registration statements in which a holder of
Registrable Securities is participating, each such Holder will furnish to the
Company in writing such customary information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus (the "Seller's Information") and, to the fullest extent
permitted by applicable law will indemnify the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act) against any and all Claims to which each such indemnified
party may become subject under the Securities Act insofar as such Claim arose
out of (i) any untrue or alleged untrue statement of material fact contained,
on the effective date thereof, in any registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto, (ii)
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
or (iii) any violations by such Person of any federal, state or common law
rule or regulation applicable to such Person and relating to action required
of or inaction by such Person in connection with any such registration;
provided that with respect to a Claim arising pursuant to clause (i) or (ii)
above, the material misstatement or omission is contained in such Seller's
Information; provided, further, that the obligation to indemnify will be
individual to each Holder and will be limited to the net amount of proceeds
received by such Holder from the sale of Registrable Securities pursuant to
such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification (but the failure to provide such notice shall not
release the indemnifying party of its obligation under paragraphs (a) and (b),
unless and then only to the extent that, the indemnifying party has been
prejudiced by such failure to provide such notice) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one counsel
for all parties indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified party a conflict
of interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(d) The indemnifying party shall not be liable to indemnify an indemnified
party for any settlement, or consent to judgment of any such action effected
without the indemnifying party's consent (but such consent will not be
unreasonably withheld). Furthermore, the indemnifying party shall not,
except with the approval 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 each
indemnified party of a release from all liability in respect to such claim or
litigation without any payment or consideration provided by each such
indemnified party.
(e) If the indemnification provided for in this Section 7 is unavailable to an
indemnified party under clauses (a) and (b) above in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
not only the relative benefits received by the Company, the underwriters, the
sellers of Registrable Securities and any other sellers participating in the
registration statement from the sale of shares pursuant to the registered
offering of securities to which indemnity is sought but also the relative
fault of the Company, the underwriters the sellers of Registrable Securities
and any other sellers participating in the registration statement in
connection with the statement or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the
underwriters, the sellers of Registrable Securities and any other sellers
participating in the registration statement shall be deemed to be based on the
relative relationship of the total net proceeds from the offering (before
deducting expenses) to the Company, the total underwriting commissions and
fees from the offering (before deducting expenses) to the underwriters and the
total net proceeds from the offering (before deducting expenses) to the
sellers of Registrable Securities and any other sellers participating in the
registration statement. The relative fault of the Company, the underwriters,
the sellers of Registrable Securities and any other sellers participating in
the registration statement shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by registration statement and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The indemnification provided for under this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of the
indemnified party or any officer, director or controlling person of such
indemnified party and will survive the transfer of securities.
8. Participation in Underwritten Registrations. No Person may participate in
any registration hereunder which is underwritten unless such Person (a) agrees
to sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements, (b) as expeditiously as possible notifies the Company of
the occurrence of any event as a result of which such prospectus contains an
untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and (c) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. Transfer of Registration Rights. The rights granted to any Person under
this Agreement may be assigned to a transferee or assignee in connection with
any transfer or assignment of Registrable Securities by a Holder; provided,
that: (a) such transfer may otherwise be effected in accordance with
applicable securities laws, (b) if not already a party hereto, the assignee or
transferee agrees in writing prior to such transfer to be bound by the
provisions of this Agreement applicable to the transferor, (c) such transferee
shall own Registrable Securities representing at least 1,000,000 shares of
Common Stock, subject to the Anti-dilution Adjustments, and (d) EIS shall act
as agent and representative for such Holder for the giving and receiving of
notices hereunder.
10. Information by Holder. Each Holder shall furnish the Company such
written information regarding such Holder and any distribution proposed by
such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration qualification or
compliance referred to in this Agreement.
11. Exchange Act Compliance. After the IPO, the Company shall comply with
all of the reporting requirements of the Securities Exchange Act of 1934
applicable to it and shall comply with all other public information reporting
requirements of the Commission which are conditions to the availability of
Rule 144 for the sale of the Registrable Securities. The Company shall
cooperate with each Purchaser in supplying such information as may be
necessary for such Purchaser to complete and file any information reporting
forms presently or hereafter required by the Commission as a condition to the
availability of Rule 144.
12. Limitation on Registration. The Company shall not be obligated to effect
a registration of any Holder's Registrable Securities pursuant to Sections 2
or 3 hereof if all of the Registrable Securities have been sold under Rule
144, Regulation S or similar provision under the Securities Act so that there
is no further restriction on the transfer by the transferee. The Company
shall not be required to include any Registerable Securities of a Holder in a
registration if all of such Holder's Registerable Securities could be sold
within a three month period pursuant to Rule 144 or other similar rule or
regulation.
13. Miscellaneous. (a) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the Holders of Registrable
Securities in this Agreement.
(b) Remedies. Any Person having rights under any provision of this Agreement
will be entitled to enforce such rights specifically to recover damages caused
by reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions
of this Agreement and that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any bond or
other security) for specific performance and for other injunctive relief in
order to enforce or prevent violation of the provisions of this Agreement;
provided that in no event shall any Holder have the right to enjoin or
interfere with any offering of securities by the Company.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and Holders of at least 50% of the Registrable
Securities; provided, that without the prior written consent of all the
Holders, no such amendment or waiver shall reduce the foregoing percentage.
(d) Successors and Assigns. Subject to Section 9 hereof, all covenants and
agreements in this Agreement by or on behalf of any of the parties hereto will
bind and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not. In particular, no Holder of
Registrable Securities shall transfer registered securities (or securities
convertible into, exerciseable or exchangeable for Registrable Securities)
other than pursuant to Rule 144 or sale pursuant to an effective registration
statement, whether or not the transferee shall have rights under this
Agreement, without obtaining an agreement from the transferee to be bound by
the terms of this Agreement; and in addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of Holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(e) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(h) Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement and the exhibits and schedules hereto will be
governed by the internal law, and not the law of conflicts, of New York.
(i) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to
the recipient or by telecopy, one day after being sent to the recipient by
reputable overnight courier service (charges prepaid) or three days after
being mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
will be sent to the parties hereto at the addresses indicated on the signature
page hereto and to the Company at the address indicated below:
Bioject Medical Technologies Inc.
7620 S.W. Bridgeport Road
Portland, Oregon 97224
Telecopier: 503-620-6431
Attention: President
(j) Termination. This Agreement shall terminate on the date as of which each
Holder has sold all remaining Registrable Securities in a transaction or
transactions of the type described in Section 12 hereof.
(k) Additional Parties. Subsequent purchasers of Common Stock, or securities
convertible, exercisable or exchangeable into of for Common Stock, may
become party to this Agreement upon execution by the Company and such
purchaser of a counterpart hereto, whereupon such Persons may become
Holders hereunder and their Common Stock or securities may become
Registerable Securities hereunder; provided that, such Person may be
entitled to registration rights equal to, but in no event greater than, the
Holders initially named herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Elan International Services, Ltd.
By:/s/ Kevin Insley
Name: Kevin Insley
Title: President and Chief Financial Officer
Bioject JV Subsidiary Inc.
By:/s/ James C. O'Shea
Name: James C. O'Shea
Title: President
