SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 15, 1997
-----------------
BIOJECT MEDICAL TECHNOLOGIES INC.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Oregon
----------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-15360 93-1099680
------------------------ ------------------------------
(Commission File Number) (IRS Employer Identification No.)
7620 SW Bridgeport Road
Portland, Oregon 97224
- --------------------------------------- ---------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (503) 639-7221
--------------
N/A
-------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Item 7. Exhibits
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.
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: October 31, 1997 By /s/ Peggy J. Miller
----------------------------------
Peggy J. Miller
Vice President, Chief Financial
Officer, Secretary/Treasurer
EXHIBIT INDEX
The following exhibits are attached to this form 8-K
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.
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:________________________
