SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
AMENDMENT NO. 1 TO
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
Commission File No. 0-15360
BIOJECT MEDICAL TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Oregon 93-1099680
- -------------------------------------- -----------------------------
(Jurisdiction of incorporation) (I.R.S. identification no.)
7620 SW Bridgeport Road
Portland, Oregon 97224
- -------------------------------------- -----------------------------
(Address of principal executive offices) (Zip code)
(503) 639-7221
-------------------------------------------------------
(Registrant's telephone number, including areas code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
At October 31, 1999 there were 5,802,248 outstanding shares of common stock
of the registrant.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited consolidated financial statements of Bioject Medical
Technologies Inc. ("BMTI"), an Oregon corporation, and its subsidiaries have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. The Company's needle-free injector operations are conducted
by Bioject Inc. ("Bioject"), an Oregon corporation formed in February 1985,
which is a wholly owned subsidiary of BMTI and its blood glucose monitoring
system operations are conducted by Marathon Medical Technologies Inc.
("Marathon"), an Oregon corporation formed in October 1997, which is wholly
owned by BMTI.
The following 10-Q report reflects the consolidated results of operations, cash
flows and financial position for the second quarter of the year ending March 31,
2000. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the year.
- Consolidated Statements of Operations for the quarters ended September
30, 1999 and September 30, 1998
- Consolidated Statements of Operations for the six months ended
September 30, 1999 and September 30, 1998
- Consolidated Balance Sheets dated September 30, 1999 and March 31,
1999
- Consolidated Statements of Cash Flows for the six months ended
September 30, 1999 and September 30, 1998
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter Ended
September 30,
1999 1998
----------- ---------
REVENUES:
Net sales of products $ 330,702 $ 311,401
Licensing/technology fees 250,000 887,558
----------- ---------
580,702 1,198,959
----------- ---------
EXPENSES:
Manufacturing 548,355 499,314
Research and development 314,457 236,324
Selling, general and administrative 689,257 757,074
------------ ------------
Total operating expenses 1,552,069 1,492,712
----------- ------------
Operating loss (971,367) (293,753)
Other income 50,850 34,449
------------ ------------
Loss from continuing operations
before taxes (920,517) (259,304)
Provision for income -- --
------------ -----------
Loss from continuing operations
before preferred stock dividend (920,517) (259,304)
Preferred Stock dividend (264,505) (348,912)
------------ ------------
Loss from continuing operations
allocable to common shareholders (1,185,022) (608,216)
Loss from discontinued operations
allocable to common shareholders -- (927,913)
----------- ------------
Net loss allocable to
Common shareholders $(1,185,022) $(1,536,129)
=========== ============
Basic and diluted net loss per
common share $ (.20) $ (.27)
=========== ============
Shares used in per share calculation
post one-for-five reverse stock split
effective October 13, 1999) 5,802,248 5,700,134
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six-Months Ended
September 30,
1999 1998
------------ -----------
REVENUES:
Net sales of products $ 443,384 $ 453,812
Licensing/technology fees 350,000 1,025,559
----------- ----------
793,384 1,479,371
------------ ----------
EXPENSES:
Manufacturing 909,800 770,328
Research and development 568,241 480,910
Selling, general and administrative 1,290,857 1,365,694
----------- ------------
Total operating expenses 2,768,898 2,616,932
----------- ------------
Operating loss (1,975,514) (1,137,561)
Other income 67,817 57,161
----------- ------------
Loss from continuing operations
before taxes (1,907,697) (1,080,400)
Provision for income taxes -- --
----------- ------------
Loss from continuing operations
before preferred stock dividend $ (1,907,697) $(1,080,400)
Preferred Stock dividend (639,341) (695,262)
----------- ------------
Loss from continuing operations
allocable to common shareholders $ (2,547,038) $( 1,775,662)
Loss from discontinued operations
allocable to common shareholders (449,786) (1,913,562)
Gain on sale of discontinued operations 2,852,666 --
----------- ------------
Net loss allocable to
common shareholders $ (144,158) $ (3,689,224)
Basic and diluted net loss per common share $ (.02) $ (.67)
=========== ============
Shares used in per share calculation
(post one-for-five reverse stock split
effective October 13, 1999) 5,802,248 5,542,158
=========== ============
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, March 31,
1999 1999
------------ ------------
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 3,815,778 $ 1,274,311
Accounts receivable, net 216,702 305,064
Stock subscription receivable -- 2,400,000
Inventories 988,289 1,251,186
Other current assets 55,589 53,599
Current assets of discontinued operations -- 597,000
------------ ------------
Total current assets 5,076,358 5,881,160
PROPERTY AND EQUIPMENT, at cost:
Machinery and equipment 2,293,239 2,235,733
Production molds 2,055,322 2,051,697
Furniture and fixtures 179,376 170,436
Leasehold improvements 94,115 94,115
------------ ------------
4,622,052 4,551,981
Less - Accumulated depreciation (2,962,479) (2,615,536)
------------ ------------
1,659,573 1,936,445
OTHER ASSETS 544,398 535,092
NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS -- 238,583
------------ ------------
$ 7,280,329 $ 8,591,280
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 245,937 $ 190,676
Accrued payroll 101,990 135,445
Other accrued liabilities 57,446 54,388
Deferred revenue 150,000 --
Current liabilities of
discontinued operations 481,906 2,462,906
------------ ------------
Total current liabilities 1,037,279 2,843,415
SHAREHOLDERS' EQUITY:
Preferred stock, no par, 10,000,000
shares authorized; no shares issued
and outstanding
Series A Convertible- 692,694 shares,
$15 stated value 11,780,357 9,163,025
Series B Convertible - 134,333 shares,
$15 stated value -- 1,566,762
Series C Convertible - 391,830 2,400,000 2,400,000
Common stock, no par, 100,000,000 shares
authorized; issued and outstanding
5,802,248 and 5,802,248 shares
at September 30, 1999 and
March 31, 1999, respectively 50,182,884 50,594,111
Accumulated deficit (58,120,191) (57,976,033)
------------ ------------
Total shareholders' equity 6,243,050 5,747,865
------------ ------------
$ 7,280,329 $ 8,591,280
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six-Months Ended
September 30,
1999 1998
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss allocable to common shareholders $ (144,158) $ (3,689,224)
Adjustments to reconcile net loss
to net cash used in operating activities
from continuing operations:
Net loss from discontinued operations 449,786 1,913,562
Gain on sale of discontinued operations (2,852,666) --
Depreciation and amortization 366,425 365,474
Contributed capital for services -- 27,636
Preferred stock dividends 639,341 695,262
Net changes in assets and liabilities:
Accounts receivable 88,362 (339,209)
Inventories 262,897 (28,598)
Other current assets (1,990) (14,605)
Accounts payable 55,264 (186,081)
Accrued payroll (33,455) (2,361)
Other accrued liabilities 3,058 (72,871)
Deferred revenue 150,000 240,000
----------- ------------
Net cash used in operating activities
of continuing operations (1,017,136) (1,091,015)
Net cash provided by operating activities
of discontinued operations 1,588,918 (479,066)
----------- ------------
Net cash provided by operating activities 571,782 (1,570,081)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Marathon Stock (331,456) --
Capital expenditures of
continuing operations (70,071) (50,767)
Capital expenditures of
discontinued operations -- (200,297)
Other assets (28,788) (41,030)
----------- ------------
Net cash used in investing activities (430,315) (292,094)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from the sale of Series C
Preferred stock 2,400,000 --
Cash proceeds from common stock -- 2,934,049
----------- ------------
Net cash provided by financing activities 2,400,000 2,934,049
----------- ------------
CASH AND CASH EQUIVALENTS:
Net increase (decrease) in cash and
cash equivalents 2,541,467 1,071,874
Cash and cash equivalents at beginning
of period 1,274,311 1,900,839
----------- ------------
Cash and cash equivalents at end
of period $3,815,778 $ 2,972,713
=========== ============
The accompanying notes are an integral part of these consolidated financial
Statements.
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. THE COMPANY:
The consolidated financial statements of Bioject Medical Technologies Inc. (the
"Company"), include the accounts of Bioject Medical Technologies Inc. ("BMTI"),
an Oregon Corporation, and its wholly owned subsidiary, Bioject Inc., an Oregon
Corporation ("Bioject"), and its wholly owned subsidiary, Marathon Medical
Technologies, ("Marathon") (formerly Bioject JV Subsidiary Inc.), an Oregon
corporation. All significant intercompany transactions have been eliminated.
Although Bioject Inc. commenced operations in 1985, BMTI was formed in December
1992 for the purpose of acquiring all of the capital stock of Bioject Medical
Systems Ltd., a Company organized under the laws of British Columbia, Canada, in
a stock-for-stock exchange in order to establish a U.S. domestic corporation as
the publicly traded parent company for Bioject Inc. and Bioject Medical Systems
Ltd. Bioject Medical Systems Ltd. was terminated in fiscal 1997. Marathon
Medical Technologies Inc. was formed in October 1997. At that time, Marathon
acquired the license to certain continuous blood glucose monitoring technology
from Elan Corporation, plc. ("Elan") and entered into a joint venture
arrangement with Elan to develop and commercialize the blood glucose monitoring
technology. On June 30, 1999, Marathon completed the sale of its license to the
blood glucose monitoring technology. In connection with the sale of the license,
BMTI acquired Elan's 19.9% ownership of the stock of Marathon. BMTI now owns
100% of Marathon's stock. Marathon's operations are reported as "Discontinued
Operations" in the financial statements and other financial information included
as a part of this report. All references to the Company include Bioject Medical
Technologies Inc. and its subsidiaries, unless the context requires otherwise.
The Company commenced operations in 1985 for the purpose of developing,
manufacturing and distributing a new drug delivery system. Since its formation,
the Company has been engaged principally in organizational, financing, research
and development, and marketing activities. In the last quarter of fiscal 1993,
the Company launched U.S. distribution of its Biojector 2000 system primarily to
the hospital and large clinic market. The Company's products and manufacturing
operations are subject to extensive government regulation, both in the U.S. and
abroad. In the U.S., the development, manufacture, marketing and promotion of
medical devices is regulated by the Food and Drug Administration ("FDA") under
the Federal Food, Drug, and Cosmetic Act ("FFDCA"). In 1987, the Company
received clearance from the FDA under Section 510(k) of the FFDCA to market a
hand-held CO2-powered needle-free injection system. In June 1994, the Company
received clearance from the FDA under Section 510(k) to market a version of its
Biojector 2000 system in a configuration targeted at high volume injection
applications. In October 1996, the Company received 510(k) clearance for a
needle-free disposable vial access device. In March 1997, the Company received
additional 510(k) clearance for certain enhancements to its Biojector 2000
system. In January 1999, the Company received ISO9001 and EN46001 certification
and in November 1999, the Company received CE Mark certification for the
Company's jet injection systems which allows the products to be sold in the
European Union. On March 23,1998, the Company entered into a transaction with
Vitajet Corporation ("Vitajet") whereby the Company acquired, along with certain
other assets, the rights to the Vitajet(R), a spring-powered, needle-free
self-injection device which currently has regulatory clearance for administering
injections of insulin. On September 30, 1997, the Company entered into a joint
venture agreement with Elan for the development and commercialization of certain
blood glucose monitoring technology which the Company licensed from Elan. On
June 30, 1999, Marathon completed a sale of the license to the blood glucose
monitoring technology, along with certain fixed assets related to the
development of that technology.
Since its inception the Company has incurred operating losses and at September
30, 1999, has an accumulated deficit of approximately $58.1 million. The
Company's revenues to date have been derived primarily from licensing and
technology fees for the jet injection technology and from limited product sales
of the Biojector 2000 system and Biojector syringes. The product sales were
principally sales to dealers to stock their inventories. More recently, the
Company has sold its products to end-users, primarily public health clinics for
vaccinations and to nursing organizations for flu immunization. Future revenues
will depend upon acceptance and use by healthcare providers and on the Company
successfully entering into license and supply agreements with major
pharmaceutical and biotechnology companies. Uncertainties over government
regulation and competition in the healthcare industry may impact healthcare
provider expenditures and third party payer reimbursements and, accordingly, the
Company cannot predict what impact, if any, subsequent healthcare reforms and
industry trends might have on its business. In the future the Company is likely
to require substantial additional financing. Failure to obtain such financing on
favorable terms could adversely affect the Company's business.
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. ACCOUNTING POLICIES:
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined in a
manner which approximates the first-in, first out (FIFO) method. Costs utilized
for inventory valuation purposes include labor, materials and manufacturing
overhead. Net inventories consist of the following:
September 30, March 31,
1999 1999
----------- ----------
Raw Materials $ 289,191 $ 289,214
Work in Process 4,647 --
Finished Goods 694,451 961,972
----------- ----------
$ 988,289 $1,251,186
=========== ==========
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior year's expenses to conform
to the current year's presentation.
NET LOSS PER SHARE
The following post one-for-five reverse split common stock equivalents are
excluded from earnings per share calculations as their effect would have been
antidilutive:
Six Months Ended September 30, 1999 1998
--------- ---------
Warrants and stock options 2,562,912 1,709,489
Convertible preferred stock 2,377,040 1,654,054
-------------- --------------
4,939,952 3,363,543
========== ==========
3. SUBSEQUENT EVENTS
On October 19, 1999, Bioject announced a strategic alliance with AngioSense,
Inc. to jointly develop innovative delivery systems to treat cardiovascular
disease. Bioject's needle-free drug delivery systems will be modified for
delivering bio-therapeutic solutions as a surgical instrument for minimally
invasive surgical procedures with several proprietary catheters being developed
by AngioSense for catheter-based cardiology interventions.
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. SUBSEQUENT EVENTS (Continued)
The alliance grants AngioSense an exclusive license to Bioject's Biojector
2000(R) and Vitajet 3(R) jet injectors, as well as a customized version of
Bioject's Iject(TM), a single-use disposable jet injector with a self-contained,
pre-filled medication cartridge to treat or diagnose cardiac or cardiovascular
diseases. According to the terms of the agreement, Bioject will receive an
equity position of approximately 10 percent in AngioSense upon completion of
certain product development milestones. Bioject has already accomplished
milestones representing 50 percent of the scheduled equity and anticipates
completing the remaining milestones early next year. In addition to a long-term
manufacturing and supply agreement with AngioSense, Bioject will receive
royalties on future product sales, and will receive significant funding to
support the development of the disposable injector portion of the AngioSense
delivery system. See "Forward Looking Statements."
AngioSense, Inc., a private company founded in March 1999, is focused on
developing innovative and cost effective surgical and cardiology based devices
for gene therapy application. The company is currently developing catheter-based
and minimally invasive surgical devices for precision- targeted delivery of gene
therapy solutions. The company's unique system design platform reaches sites
that are inaccessible to conventional syringe-based injection methods currently
employed. The company's products can be used in any procedural setting and in
conjunction with other technologies.
4. CHANGES IN SHAREHOLDERS' EQUITY
In connection with the Company's purchase of Elan's interest in Marathon at June
30, 1999, the Company and Elan agreed to certain changes in the terms of Elan's
Series A Convertible Preferred Stock ("Series A Stock"). The modified terms
fixed the conversion price of the Series A Stock at $1.50, eliminating a prior
provision that, in certain circumstances, allowed the Series A Stock to be
converted at 80% of the then current fair market value of the Company's stock,
if such value was less than $1.50. The terms were also modified to give the
Company the right to redeem the Series A Stock for cash within ninety days of
receiving notice of the intent to redeem all or part of the Series A Stock into
common stock of the Company. The redemption price is the original issuance price
of the Series A Stock being converted plus accumulated preferred stock dividends
thereon from the date of issuance of the Series A Stock. Modifying the terms of
the Series A Stock required shareholder approval of an amendment to the
Company's Articles of Incorporation. Amended Articles of Incorporation,
reflecting the modified terms, was referred to the Company's shareholders at the
Company's annual meeting in September, 1999, and shareholders approved the
amendment to the Company's Articles of Incorporation to modify the terms to fix
the conversion price to $1.50. The one-for-five reverse stock split of the
Company's common stock, which was effected on October 13, 1999, adjusted the
fixed conversion price to $7.50.
<PAGE>
BIOJECT MEDICAL TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. CHANGES IN SHAREHOLDERS' EQUITY (Continued)
On July 9, 1999, the last sale price of the Company's common stock as reported
on the NASDAQ National Market System was ($0.50) per share. The Board of
Directors believed that the recent per share price of the Common Stock affected
the marketability of the existing shares, increased the amount and percentage of
transaction costs paid by individual stockholders, and affected the potential
ability of the Company to raise capital by issuing additional shares. As a means
of improving marketability of the Common Stock, reducing stockholders'
transaction costs, increasing the number of shares available for future
issuances, and other considerations, on July 15, 1999, the Board of Directors
approved, subject to the shareholder approval, a proposal to amend the Articles
of Incorporation to effect a reverse stock split by exchanging five outstanding
shares of the Company's common stock for one new share of the Company's common
stock. At the Company's annual meeting in September, 1999, the shareholders
approved the amendment to the Company's Articles of Incorporation to effect a
one-for-five reverse stock split. The effective date of the reverse was October
13, 1999. At July 15,1999, 29,011,236 shares of Common Stock were outstanding,
as well as options, warrants and convertible preferred stock to acquire an
additional 24,378,928 shares of Common Stock. The Reverse Stock Split, decreased
the number of outstanding shares of Common Stock to approximately 5.8 million
shares and approximately 4.8 million shares are reserved for issuance upon
exercise of outstanding options, warrants and the conversion of convertible
preferred stock, Approximately 89.3 million shares are available for future
issuances. Earnings per share reflect post split shares of common stock
outstanding.
On the effective date, the total number of shares of Common Stock held by each
stockholder converted automatically into a right to receive a number of shares
and fractions thereof of New Common Stock equal to the number of shares of
Common Stock owned immediately prior to the Reverse Stock Split divided by five.
No fractional shares or scrip were issued and, in lieu thereof, each stockholder
who would otherwise have been entitled to a fraction of a share of New Common
Stock would received a whole share of New Common Stock.
Approval of the Reverse Stock Split did not affect any stockholder's percentage
ownership interest in the Company or proportional voting power except for minor
differences resulting from fractional shares. The Reverse Stock Split did not
reduce the number of shareholders of the Company. The shares of New Common Stock
issued upon approval of the Reverse Stock Split were fully paid and
nonassessable. The voting rights and other privileges of the holders of Common
Stock was not affected substantially by adoption of the Reverse Stock Split or
the subsequent implementation thereof.
5. BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying, unaudited consolidated financial statements do not include all
information and footnote disclosures normally included in audited financial
statements. However, in the opinion of management, all adjustments (which
include only normal, recurring adjustments) necessary to present fairly the
financial position, cash flows, and results of operations have been made. It is
suggested that these statements be read in conjunction with the financial
statements included in the Company's Annual Report on Form 10-K for the year
ended March 31, 1999.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company continues to target its direct sales efforts toward: i) sales to
existing markets, specifically flu immunization providers, public health
agencies and public school systems; ii) sales in states such as California,
where the Company believes that needle-syringe safety legislation makes the
Company's products more price competitive; and iii) sales to the U.S. military.
Sales through distributors will target the home self-injection market. The
Company is also focusing its sales and marketing efforts on entering into
licensing and supply arrangements with leading pharmaceutical and biotechnology
companies for whose products the Biojector technology provides either increased
medical effectiveness or a higher degree of market acceptance. See
"Forward-Looking Statements."
The Company's revenues to date have not been sufficient to cover manufacturing
and operating expenses. However, the Company believes that if its products
attain significantly greater general market acceptance and if the Company is
able to enter into large volume supply agreements with major pharmaceutical and
biotechnology companies, the Company's product sales volume would increase.
Significantly higher product sales volume should allow the Company to realize
volume-related manufacturing cost efficiencies. This, in turn, should result in
reduced costs of goods as a percentage of sales, which could eventually allow
the Company to achieve positive gross profit. The Company believes that positive
gross profit from product sales, together with licensing and technology revenues
from agreements entered into with large pharmaceutical and biotechnology
companies would eventually allow the Company to operate profitably. The level of
revenues required to generate net income will be affected by a number of factors
including the mix of revenues between product sales and licensing and technology
fees, pricing of the Company's products, its ability to attain volume-related
and automation-related manufacturing efficiencies, and the impact of inflation
on the Company's manufacturing and other operating costs. There can be no
assurance that the Company will achieve sufficient cost reductions or sell its
products at prices or in volumes sufficient to achieve profitability or offset
increases in its costs should they occur. Further, there can be no assurance
that, in the future, the Company will be able to interest major pharmaceutical
or biotechnology companies in entering licensing or supply agreements. See
"Forward-Looking Statements."
On June 30, 1999 the Company entered into a binding letter agreement with a
major biotechnology company that provided for an evaluation of Bioject's jet
injection technology for use with certain biopharmaceutical products. Terms of
the agreement provided for up to $500,000 in licensing and technology fees based
upon meeting certain milestones. To date the Company has received $500,000 with
revenue of $100,000 recognized in the first quarter of fiscal 2000 and $250,000
in the current fiscal quarter. The balance to be recognized upon completion of
the final milestone on or before December 31, 1999. Concurrent with meeting the
final milestone, the Company is in negotiation for a long-term licensing and
supply agreement. There can be no assurance that the Company will be successful
in its negotiations for a long-term licensing and supply agreement. See "Forward
Looking Statements."
<PAGE>
On October 19, 1999, Bioject announced a strategic alliance with AngioSense,
Inc. to jointly develop innovative delivery systems to treat cardiovascular
disease. Bioject's needle-free drug delivery systems will be modified for
delivering bio-therapeutic solutions as a surgical instrument for minimally
invasive surgical procedures with several proprietary catheters being developed
by AngioSense for catheter-based cardiology interventions.
The alliance grants AngioSense an exclusive license to Bioject's Biojector
2000(R) and Vitajet 3(R) jet injectors, as well as a customized version of
Bioject's Iject(TM), a single-use disposable jet injector with a self-contained,
pre-filled medication cartridge to treat or diagnose cardiac or cardiovascular
diseases. According to the terms of the agreement, Bioject will receive an
equity position of approximately 10 percent in AngioSense upon completion of
certain product development milestones. Bioject has already accomplished
milestones representing 50 percent of the scheduled equity and anticipates
completing the remaining milestones early next year. In addition to a long-term
manufacturing and supply agreement with AngioSense, Bioject will receive
royalties on future product sales, and will receive significant funding to
support the development of the disposable injector portion of the AngioSense
delivery system. There can be no assurance that any developed product will
receive regulatory approval or market acceptance such that Bioject can expect to
receive royalties from future product sales. See "Forward Looking Statements."
AngioSense, Inc., a private company founded in March 1999, is focused on
developing innovative and cost effective surgical and cardiology-based devices
for gene therapy application. The company is currently developing catheter-based
and minimally invasive surgical devices for precision-targeted delivery of gene
therapy solutions. The company's unique system design platform reaches sites
that are inaccessible to conventional syringe-based injection methods currently
employed. The company's products can be used in any procedural setting and in
conjunction with other technologies.
The Iject(TM) will require FDA approval and clinical trials. The Company will
assist AngioSense to obtain such approval, although there can be no assurance
that such approval process can be completed on a timely basis or at all.
The Company's clinical research efforts are aimed primarily at clinical research
collaborations in the area of DNA-based vaccines and medications. Currently, the
B-2000 is being used in over 25 studies. Product development efforts are focused
primarily in three areas: i) developing low cost disposable "Iject(TM)"
jet-injector targeted for both clinical and home use markets; ii) developing
pre-filled syringes for use with the B-2000 and with other needle-free injectors
presently being developed; and iii) further developing the intradermal adapter
for the B-2000.
Revenues and results of operations have fluctuated and can be expected to
continue to fluctuate significantly from quarter to quarter and from year to
year. Various factors may affect quarterly and yearly operating results
including: i) length of time to close product sales; ii) customer budget cycles;
iii) implementing cost reduction measures; iv) uncertainties and changes in
product sales due to third party payer policies and proposals relating to
healthcare cost containment; v) timing and amount of payments under licensing
and technology development agreements; and vii) timing of new product
introductions by the Company and its competition. The Company does not expect to
report net income from operations in fiscal 2000. See "Forward-Looking
Statements."
<PAGE>
QUARTER ENDED SEPTEMBER 30, 1999 COMPARED TO QUARTER ENDED SEPTEMBER 30, 1998.
Product sales increased from $311,000 in the second quarter of fiscal 1999 to
$331,000 in the second quarter of fiscal 2000, a result of increased sales of
the vial adapter to a major pharmaceutical company. License and technology fees
decreased from $888,000 in the second quarter of fiscal 1999 to $250,000 in the
second quarter of fiscal 2000. Fiscal 1999 license and technology fees were
primarily a result of $750,000 received from Merck. Fiscal 2000 fees are the
result of fees from a major biotechnology company in connection with meeting
certain milestones.
Manufacturing expense increased from the second quarter of fiscal 1999 to the
second quarter of fiscal 2000 by $49,000. As a result of adequacy of existing
supply inventories of B-2000 devices and Biojector syringes the Company did not
manufacture material quantities to absorb current manufacturing overhead.
Research and development expenses increased from $236,000 in the second quarter
of fiscal 1999 to $314,000 in the second quarter of fiscal 2000 primarily due to
increased activity in the development of the disposable injector, pre-filled
syringes, and the intradermal spacer. Selling, general and administrative
expense decreased from $757,000 in the second quarter of fiscal 1999 compared to
$689,000 in the second quarter of fiscal 2000 in part due to decreased reliance
on outside consultants.
SIX MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30,
1998. Revenues for the six months ended September 30, 1999 consist of product
sales of $443,000 and licensing and technology revenues of $350,000. This
compares to $454,000 in product sales and $1.03 million in licensing and
technology revenues for the six months ended September 30, 1998. Product sales
remained relatively constant. The $1.03 million in licensing and technology
revenues in fiscal 1999 was primarily due to receipt of a $750,000 payment under
the agreement signed with Merck in July 1998. Licensing fees for fiscal 2000 are
from fees received from a major biotechnology company.
Manufacturing expense increased from $770,000 for the first six months of fiscal
1999 to $910,000 for the six months ended September 30, 1999. The increase was
primarily due to lower production levels in the current fiscal year, resulting
in a decrease of manufacturing overhead absorbed into inventory during the six
months ended September 30, 1999. The Company anticipates drawing primarily on
current inventories to fill most of its product orders through the end of fiscal
2000. Accordingly, the Company anticipates that production levels, and related
absorption of manufacturing overhead, for the remainder of fiscal 2000 will
remain relatively constant when compared to production levels in the
corresponding period of fiscal 1999. See "Forward-Looking Statements."
Research and development expense increased from $481,000 in the six months ended
September 30, 1998 to $568,000 in the first six months of fiscal 1999. The
increase was principally due to research and development cost relating to the
development of the disposable injector, pre-filled syringes and the intradermal
spacer. Selling, general and administrative expense decreased from $1.37 million
in the six months ended September 30, 1998 to $1.29 million in the six months
ended September 30, 1999. Selling expense for the first six months of fiscal
2000 decreased by $20,000 when compared with the same period a year ago. Savings
of $54,000 in administrative expense was a result of decreased consulting fees.
Other income consists of earnings on available cash balances and fluctuates
based on available cash balances.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Since its inception in 1985, the Company has financed its operations, working
capital needs and capital expenditures primarily from private placements of
securities, exercises of stock options and warrants, proceeds received from its
initial public offering in 1986, proceeds received from a public offering of
common stock in November 1993, licensing and technology revenues, revenues from
sales of products and proceeds from the sale of the blood glucose monitoring
technology. Net proceeds received from issuance of securities from inception
through September 30, 1999 totaled approximately $50.2 million.
Cash, cash equivalents and marketable securities totaled $3.8 million at
September 30, 1999 compared to $1.3 million at March 31, 1999. The increase
resulted primarily from cash proceeds received from issuance of the Company's
Series C Preferred Stock of $2.4 million and a minority interest capital
contribution to Marathon Medical of $597,000 and the sale of Marathon Medical
with net proceeds of approximately $2.9 million, offset by operating cash
requirements and capital asset purchases.
The Company believes that its current cash position, combined with revenues,
other cash receipts, and net proceeds from the sale of the glucose monitoring
technology will be sufficient to fund the Company's operations through the
second quarter of fiscal 2001. In addition, the Company is considering other
potential financing alternatives. Even if the Company is successful in obtaining
additional financing, unforeseen costs and expenses or lower than anticipated
cash receipts from product sales or research and development activities could
accelerate or increase the financing requirements. The Company has been
successful in raising required financing in the past and believes that
sufficient funds will be available to fund future operations. However, there can
be no assurance that the Company's efforts will be successful and there can be
no assurance that such financing will be available on terms which are not
significantly dilutive to existing shareholders. Failure to obtain needed
additional capital on terms acceptable to the Company, or at all, would
significantly restrict the Company's operations and ability to continue product
development and growth and materially adversely affect the Company's business.
The Company has no banking line of credit or other established source of
borrowing. See "Forward Looking Statements."
YEAR 2000 ISSUES. The Company has completed the assessment of and has taken
remedial action to correct any deficiency of internal systems with regard to
potential Year 2000 ("Y2K") issues. The assessment included steps to review and
obtain vendor certification of Y2K compliance for current systems, testing
system compliance and implementing corrective action where necessary. A Y2K team
composed of manager-level members from Manufacturing, Purchasing, Information
Services and Finance continues to conduct the assessment. Assessment of the
compliance of all critical systems, plans for remedial action, if any, and
estimates of the cost of such remedial action have been completed. The cost to
address the Company's Y2K issues have been estimated to be immaterial and funds
expended are expected to be derived from normal maintenance and upgrade
operating budgets. See "Forward-Looking Statements."
PRODUCTS. The Company's products do not incorporate either application or
embedded software and are therefore not subject to Y2K issues.
INFORMATION SYSTEMS. The Company utilizes packaged application software for all
critical information systems functions, which have been certified by the vendors
as being Y2K compliant. This includes financial software, operating and
networking systems, application and data servers, PC and communications hardware
and core office automation software. The company has tested the reliability of
the application software and replaced systems where necessary and reasonably
believes it to be Y2K compliant. See "Forward-Looking Statements."
<PAGE>
MANUFACTURING SYSTEMS. The Company has received manufacturer certification of
Y2K compliance for all critical automated components used in manufacturing the
Company's products.
SUPPLIER BASE. The Company implemented a Y2K audit program of suppliers critical
to the Company's operations. These suppliers have certified Y2K compliance of
systems critical to maintaining a continuing source of supply to the Company.
RISK. The Company will be at risk from external infrastructure failures that
could arise from Y2K failures, including failure of electrical power and
telecommunications. Investigation and assessment of the risk of failure of such
infrastructure is beyond the scope and resources of the Company. The Company
intends to rely on vendor certification of Y2K compliance and does not plan to
audit vendor systems to test their compliance. The Company will be at risk with
respect to vendors who certify their systems as being Y2K compliant but who are
unable to deliver potentially critical supplies and services to the Company on
account of Y2K noncompliance.
Business risks to the Company of not successfully identifying Y2K issues and
undertaking effective remedial action include the inability to ship product,
delay or loss of revenue and delay in manufacturing operations. The Company
believes that it has successfully identified critical Y2K issues and has
substantially completed required remedial action. Other than risks created by
infrastructure failures or by the Company's dealings with third parties, where
the actions of such third parties are beyond the Company's control, the Company
believes that it will have no material business risk from Y2K issues. There can
be no assurance that infrastructure failures will not occur or that third
parties, over which the Company has no control will successfully address their
own Y2K issues. See "Forward-Looking Statements."
FORWARD LOOKING STATEMENTS This report contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements concern, among other things, anticipated
revenues from product sales and licensing and technology fees, anticipated
funding from third parties for development projects, the Company's ability to
enter into long-term licensing and supply agreements, expected sufficiency of
capital resources to meet the Company's future requirements, future sources of
working capital, and Year 2000 issues. Paragraphs of this Report that include
forward-looking statements are often identified with a cross-reference to this
section. Forward-looking statements are based on expectations, assumptions,
estimates and projections about the Company and the industry in which the
Company operates that involve risks and uncertainties. These forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the Company's actual results or industry results to be materially
different from the results, performance, or achievements discussed or implied in
the forward-looking statements. These risks and uncertainties include the
uncertainty of market acceptance of the Company's jet injection products,
uncertain successful completion of research and development projects, the
Company's need to enter into additional strategic corporate licensing
arrangements, the Company's history of losses and its accumulated deficit and
need for additional financing, the Company's limited manufacturing experience,
the Company's dependence on the performance of existing and future corporate
partners and other third parties, uncertainties related to regulation by the FDA
and the need to obtain approval of new products and their application to
additional drugs, the possibility of product liability claims, dependence on key
employees and the risks related to competition.
Forward-looking statements are based on the estimates and opinions of management
on the date the statements are made. The Company assumes no obligation to update
forward-looking statements if conditions or management's estimates or opinions
should change, even if new information becomes available or other events occur
in the future. For a more detailed description and discussion of such risks,
uncertainties and other factors, readers of this report are referred to the
Company's filings with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for the year ended March 31, 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
None during the quarter ended September 30, 1999.
Item 2. Changes in Securities
In connection with the Company's purchase of Elan's interest in Marathon at June
30, 1999, the Company and Elan agreed to certain changes in the terms of Elan's
Series A Convertible Preferred Stock ("Series A Stock"). The modified terms
fixed the conversion price of the Series A Stock at $1.50, eliminating a prior
provision that, in certain circumstances, allowed the Series A Stock to be
converted at 80% of the then current fair market value of the Company's stock,
if such value was less than $1.50. The terms were also modified to give the
Company the right to redeem the Series A Stock for cash within ninety days of
receiving notice of the intent to redeem all or part of the Series A Stock into
common stock of the Company. The redemption price is the original issuance price
of the Series A Stock being converted plus accumulated preferred stock dividends
thereon from the date of issuance of the Series A Stock. Modifying the terms of
the Series A Stock required shareholder approval of an amendment to the
Company's Articles of Incorporation. Amended Articles of Incorporation,
reflecting the modified terms, was referred to the Company's shareholders at the
Company's annual meeting in September, 1999. The shareholders approved the
amendment to the Company's Articles of Incorporation to modify the terms to fix
the conversion price to $1.50. As a result of the Reverse Stock Split, the
conversion rate was adjusted to $7.50 per share.
On July 9, 1999, the last sale price of the Company's common stock as reported
on the NASDAQ National Market System was ($0.50) per share. The Board of
Directors believed that the recent per share price of the Common Stock affected
the marketability of the existing shares, increased the amount and percentage of
transaction costs paid by individual stockholders, and affected the potential
ability of the Company to raise capital by issuing additional shares. As a means
of improving marketability of the Common Stock, reducing stockholders'
transaction costs, increasing the number of shares available for future
issuances, and other considerations, on July 15, 1999, the Board of Directors
approved, subject to the shareholder approval, a proposal to amend the Articles
of Incorporation to effect a reverse stock split by exchanging five outstanding
shares of the Company's common stock for one new share of the Company's common
stock. At the Company's annual meeting in September, 1999, the shareholders
approved the amendment to the Company's Articles of Incorporation to effect a
one-for-five reverse stock split. The effective date of the reverse was October
13, 1999. At July 15,1999, 29,011,236 shares of Common Stock were outstanding,
as well as options, warrants and convertible preferred stock to acquire an
additional 24,378,928 shares of Common Stock. The Reverse Stock Split, decreased
the number of outstanding shares of Common Stock to approximately 5.8 million
shares and approximately 4.8 million shares are reserved for issuance upon
exercise of outstanding options, warrants and the conversion of convertible
preferred stock, Approximately 89.3 million shares are available for future
issuances. Earnings per share reflect post split shares of common stock
outstanding
On the effective date, the total number of shares of Common Stock held by each
stockholder converted automatically into a right to receive a number of shares
and fractions thereof of New Common Stock equal to the number of shares of
Common Stock owned immediately prior to the Reverse Stock Split divided by five.
No fractional shares or scrip were issued and, in lieu thereof, each stockholder
who would otherwise have been entitled to a fraction of a share of New Common
Stock would received a whole share of New Common Stock.
Approval of the Reverse Stock Split did not affect any stockholder's percentage
ownership interest in the Company or proportional voting power except for minor
differences resulting from fractional shares. The Reverse Stock Split did not
reduce the number of shareholders of the Company. The shares of New Common Stock
issued upon approval of the Reverse Stock Split were fully paid and
nonassessable. The voting rights and other privileges of the holders of Common
Stock was not affected substantially by adoption of the Reverse Stock Split or
the subsequent implementation thereof.
<PAGE>
Item 3. Defaults Upon Senior Securities
None during the quarter ended September 30, 1999.
Item 4. Submission of Matters to a Vote of Security Holders
At the annual general meeting of the shareholders of the Company held at 9:00 am
on September 16, 1999 in Portland, Oregon, the following matters were submitted
to a vote of the shareholders:
Election of directors. The slate of directors was approved by the Company's
shareholders with no director receiving less than 22,754,544 votes in favor and
no more than 299,578 withheld. David de Weese received 22,755,544 votes in favor
and 298,578 votes withheld; William A. Gouveia received 22,755,544 votes in
favor and 298,578 votes withheld; Edward Flynn received 22,755,544 votes in
favor and 298,578 votes withheld. Shares voted totaled 23,054,122.
Amend Articles to amend the terms of the Series A Preferred Stock. The proposal
passed receiving 11,859,655 votes in favor, 1,338,834 votes against and 333,225
votes abstaining, out of shares voted totaling 13,531,714.
Amend Articles of Incorporation and grant the Board of Directors the authority
to effect a reverse split. The proposal passed receiving 20,520,691 votes in
favor, 1,936,771 votes against and 2,877,085 votes abstaining, out of shares
voted totaling 25,334.547.
There were 29,011,236 common shares outstanding as of the date of record of July
24, 1999.
Item 5. Other Information
On October 7, 1999, Mike Sember resigned from Bioject's Board of Directors.
Item 6. Exhibits and Reports on Form 8-K
EXHIBITS
Exhibit
Number Description
- ------- -----------
3.1* Amended and Restated Articles of Incorporation of the Company
10.69*+ Letter Agreement dated June 29, 1999
10.67+ Agreement I between Bioject, Inc. and AngioSense, Inc. dated
September 21, 1999
10.68+ Agreement II between Bioject, Inc. and AngioSense, Inc. dated
September 21, 1999
27.1* Financial Data Schedule
- -------------------------
*previously filed
+ Confidential treatment has been requested with respect to certain portions
of this exhibit pursuant to an application for Confidential Treatment filed
with the Commission under Rule 24b-2(b) under the Securities Exchange Act
of 1934, as amended.
REPORTS ON FORM 8K:
On July 13, 1999, the Company filed a report on Form 8-K regarding the
sale of Marathon's technology license.
<PAGE>
SIGNATURE
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 thereunto duly authorized.
BIOJECT MEDICAL TECHNOLOGIES INC.
(Registrant)
Date: January 13, 2000 /s/ James O'Shea
---------------------------------
James O'Shea
Chairman, Chief Executive Officer
and President
/s/ Christine M. Farrell
---------------------------------
Christine M. Farrell
Controller and Secretary
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description
- ------- -----------
3.1* Amended and Restated Articles of Incorporation of the Company
10.69*+ Letter Agreement dated June 29, 1999
10.67+ Agreement I between Bioject, Inc. and AngioSense, Inc. dated
September 21, 1999
10.68+ Agreement II between Bioject, Inc. and AngioSense, Inc. dated
September 21, 1999
27.1* Financial Data Schedule
- -------------------------
*previously filed
+ Confidential treatment has been requested with respect to certain portions
of this exhibit pursuant to an application for Confidential Treatment filed
with the Commission under Rule 24b-2(b) under the Securities Exchange Act
of 1934, as amended.
EXHIBIT 10.67
AGREEMENT I
BETWEEN
BIOJECT, INC.
AND
ANGIOSENSE, INC.
DATED SEPTEMBER 21, 1999
*** Confidential portions have been omitted pursuant to an application for
confidential treatment under Rule 24b-2 under the Securities Exchange Act
of 1934, as amended. Omitted portions have been separately filed with the
Securities and Exchange Commission.
<PAGE>
<TABLE>
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE 1 DEFINITIONS.................................................................................................1
1.1 "Affiliate".........................................................................................1
1.2 "B2000 Product".....................................................................................1
1.3 "Change of Control".................................................................................2
1.4 "Combination Product"...............................................................................2
1.5 "Control"...........................................................................................2
1.6 "Extended Field"....................................................................................2
1.7 "Facility"..........................................................................................2
1.8 "Field".............................................................................................2
1.9 "Improvements"......................................................................................2
1.10 "Licensed Patents"..................................................................................2
1.11 "Licensed Technology"...............................................................................2
1.12 "Net Sales".........................................................................................3
1.13 "Product"...........................................................................................3
1.14 "Specifications"....................................................................................3
1.15 "Sublicensee".......................................................................................3
1.16 "Technical Information".............................................................................3
1.17 "Valid Claim"......................................................................................3
1.18 "Vitajet Product"...................................................................................3
ARTICLE 2 GRANT OF RIGHTS.............................................................................................4
2.1 License Grant.......................................................................................4
2.2 Right of First Refusal in the Extended Field........................................................4
2.3 Disclosure of Licensed Technologies.................................................................4
2.4 Diligence...........................................................................................4
2.5 Prohibition on Reverse Engineering..................................................................4
ARTICLE 3 EQUIPMENT...................................................................................................4
3.1 Use of Equipment....................................................................................4
3.2 Repair and Maintenance..............................................................................5
3.3 Insurance...........................................................................................5
3.4 Replacement.........................................................................................5
3.5 Ownership...........................................................................................5
3.6 Location............................................................................................5
3.7 Documents...........................................................................................6
3.8 Right of First Refusal..............................................................................6
ARTICLE 4 EQUITY 6
4.1 Equity..............................................................................................6
</TABLE>
i
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<S> <C> <C>
ARTICLE 5 SUPPLY OF PRODUCT...........................................................................................6
5.1 Terms and Conditions................................................................................6
5.2 Product Supply......................................................................................6
5.3 Forecasts...........................................................................................6
5.4 Orders..............................................................................................7
5.5 Delivery............................................................................................7
5.6 Invoicing...........................................................................................8
5.7 Shipping............................................................................................8
5.8 Product Acceptance..................................................................................8
5.9 Return of Product...................................................................................8
ARTICLE 6 TRANSFER PRICE; ROYALTIES; PAYMENTS; BOOKS AND RECORDS.....................................................8
6.1 Transfer Price......................................................................................8
6.2 Inventory...........................................................................................8
6.3 Royalties...........................................................................................9
6.4 Sublicense Fees.....................................................................................9
6.5 Payments............................................................................................9
6.6 Third Party Royalties..............................................................................10
6.7 Records; Inspection................................................................................10
ARTICLE 7 COMMERCIALIZATION..........................................................................................10
7.1 Technical Literature...............................................................................10
7.2 Product Packaging and Labeling.....................................................................11
ARTICLE 8 PRODUCT WARRANTY...........................................................................................11
8.1 Product Warranty...................................................................................11
ARTICLE 9 INTELLECTUAL PROPERTY......................................................................................11
9.2 Patent Prosecution.................................................................................12
9.3 Defense of Third Party Infringement Claims.........................................................13
9.4 Enforcement........................................................................................13
ARTICLE 10 REPRESENTATIONS AND WARRANTIES............................................................................14
10.1 Bioject Warranties.................................................................................14
10.2 AngioSense Warranties..............................................................................14
ARTICLE 11 CONFIDENTIALITY...........................................................................................14
11.1 Confidential Information...........................................................................14
11.2 Permitted Disclosures..............................................................................14
</TABLE>
ii
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<S> <C> <C>
ARTICLE 12 INDEMNIFICATION...........................................................................................15
12.1 Indemnification of Bioject.........................................................................15
12.2 Indemnification of AngioSense......................................................................15
12.3 Procedure..........................................................................................15
ARTICLE 13 TERM AND TERMINATION......................................................................................16
13.1 Term...............................................................................................16
13.2 Termination for Cause..............................................................................16
13.3 Bankruptcy Proceedings.............................................................................16
13.4 Effect of Expiration and Termination...............................................................16
13.5 Survival...........................................................................................17
ARTICLE 14 LIMITATION OF LIABILITY...................................................................................17
ARTICLE 15 MISCELLANEOUS.............................................................................................17
15.1 Governing Law......................................................................................17
15.2 Disputes...........................................................................................17
15.3 Force Majeure......................................................................................18
15.4 No Implied Waivers; Rights Cumulative..............................................................18
15.5 Independent Contractors............................................................................18
15.6 Notices............................................................................................18
15.8 Visiting Personnel.................................................................................19
15.9 Modification.......................................................................................19
15.10 Severability.......................................................................................19
15.11 Publicity..........................................................................................19
15.12 Headings...........................................................................................20
15.13 No Implied Licenses................................................................................20
15.14 Entire Agreement...................................................................................20
15.15 Counterparts.......................................................................................20
</TABLE>
iii
<PAGE>
AGREEMENT I
THIS EXCLUSIVE LICENSE AGREEMENT ("Agreement") is made and entered into
this 21st day of September , 1999 (the "Effective Date"), by and between
ANGIOSENSE, INC., a Delaware corporation ("AngioSense"), and BIOJECT, INC., an
Oregon corporation ("Bioject").
BACKGROUND
A. Bioject has developed several technologies and products related to
needle-free drug injection systems; and
B. AngioSense has developed certain intellectual property relating to the
surgical and percutaneous delivery of drugs; and
C. AngioSense desires to obtain an exclusive license under all patents and
patent applications relating to such technologies from Bioject, together with
all associated know-how, to use and sell products and combination products in
accordance with the terms and conditions contained herein and, under certain
conditions as specified herein to make and have made products; and
D. Bioject is willing to grant such an exclusive license to AngioSense in
accordance with the terms and conditions contained herein;
NOW, THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliate" shall mean any entity which controls, is controlled by or
is under common control with AngioSense or Bioject. An entity shall be regarded
as in control of another entity for purposes of this Section 1.1 if it owns or
controls more than fifty percent (50%) of the shares of the subject entity
entitled to vote in the election of directors (or, in the case of an entity that
is not a corporation, for the election of the corresponding managing authority).
1.2 "B2000 Product" shall mean the Bioject CO2 powered, needle-free
injection device utilizing the Licensed Technology
<PAGE>
1.3 "Change of Control" shall mean, with respect to any entity, (1) any
transaction or series of related transactions, other than a registered public
offering unrelated to any acquisition, as a result of which the persons owning
the outstanding voting securities of Bioject, Inc., immediately prior to such
transaction or series of related transactions, cease to own a majority of the
outstanding voting securities of the entity thereafter; (2) the consolidation or
merger of the entity with or into another person or entity, whether or not the
entity is the surviving entity of such transaction, unless immediately after
such consolidation or merger, the persons owning the outstanding voting
securities the entity prior to the transaction own a majority of the outstanding
voting securities of such new or surviving entity; or (3) the sale, assignment
or other transfer of all or substantially all of the business or assets of the
entity to a third party in a single transaction or series of related
transactions.
1.4 "Combination Product" shall mean any product that is developed and sold
by AngioSense and is comprised in part of one or more Products and of one or
more other products or services or parts which could be sold separately.
1.5 "Control" shall mean with respect to a particular intellectual property
right or other subject matter, possession of the ability to grant a license or
sublicense under such rights as provided for herein without violating the terms
of any agreement or other arrangements with any third party.
1.6 "Extended Field" shall mean the use of the cardiovascular system as a
delivery pathway for the treatment or diagnosis of a non-cardiovascular system
or environment, excluding injection through or within the skin.
1.7 "Facility" shall mean Bioject's facility located at 7620 S.W.
Bridgeport Road, Portland Oregon 97224.
1.8 "Field" shall mean all cardiovascular procedures to treat or diagnose
cardiac or cardiovascular diseases, including, without limitation percutaneous
and surgical procedures.
1.9 "Improvements" shall mean those rights and other subject matter, made,
conceived or reduced to practice by Bioject, alone or jointly with AngioSense or
a third party subcontractor comprised of improvements to the Licensed
Technology.
1.10 "Licensed Patents" means (a) the patents and patent applications
listed on Exhibit A attached hereto, (b) any and all related foreign patents and
patent applications, whether now existing or hereafter filed, (c) any
provisionals, substitutions, divisionals, reissues, renewals, continuations,
continuations-in-part, substitute applications and inventors' certificates
arising from, or based upon, any of the foregoing patents or patent
applications, and (d) any patents issuing from any of the foregoing patent
applications.
1.11 "Licensed Technology" means the Licensed Patents and Technical
Information.
-2-
<PAGE>
1.12 "Net Sales" shall mean the total amount charged to third parties by
AngioSense, its Affiliates or Sublicensees, upon the sales of Products, less the
following reasonable and customary deductions to the extent applicable to such
allowed to the buyer against such charged amounts: (i) trade, quantity and cash
discounts; (ii) rebates and chargebacks to the buyer; (iii) reasonable amounts
for actual uncollectible accounts determined in accordance with generally
acceptable accounting practices (GAAP) consistently applied to all products of
the selling party; (iv) sales and value-added taxes imposed upon the in-country
sale of a Product; (v) transportation charges, including shipping insurance, and
(vi) uncollectible amounts. For the removal of doubt, Net Sales shall not
include sales by AngioSense to its Affiliates or Sublicensees for resale,
provided that if AngioSense sells a Product to an Affiliate or Sublicensee for
resale, Net Sales shall include the amounts charged by such Affiliate or
Sublicensee to third parties on the resale of such Product. With respect to any
Combination Product, Net Sales shall be determined by multiplying the amounts
received by AngioSense attributable to Combination Products by a fraction, the
numerator of which is the fair market value of the Product included in the
Combination Product, and the denominator of which is the sum of the fair market
value of such Product and the fair market value of the products or parts which
are not Product. Whenever possible, the fair market value of the Product
included in the Combination Product will be the market price at which such
Product is sold on a stand-alone basis; provided that fair market value shall be
determined reasonably and in good faith by AngioSense and Bioject in the event
that no market price is available.
1.13 "Product" means any product, including the B2000 Product and Vitajet
Product, and the syringes related to such products, sold by AngioSense, its
Affiliates or Sublicensees, which is covered by a Valid Claim of the Licensed
Patent in the country of sale of such product.
1.14 "Specifications" shall mean the design, manufacturing, quality,
sterilization, labeling, packaging and supply requirements for a Product to be
defined and agreed upon by the parties in writing.
1.15 "Sublicensee" shall mean, with respect to a particular Product, a
third party who has obtained through AngioSense, a sublicense to the rights
granted to AngioSense hereunder.
1.16 "Technical Information" means all know-how, data, trade secrets,
processes, procedures, devices, methods, formulas, materials, compositions of
matter, protocols, information or other subject matter within the knowledge and
possession of Bioject, which is useful to or contributes in whole or in part to
the practice of the Licensed Patents in the Field.
1.17 "Valid Claim" shall mean a claim of an issued and unexpired patent,
which claim has not lapsed, been canceled, or become abandoned and which claim
has not been declared invalid by a court of competent jurisdiction, and which
has not been admitted to be invalid or unenforceable through reissue or
disclaimer.
1.18 "Vitajet Product" shall mean the Bioject spring-powered, needle-free
injection device utilizing the Licensed Technology.
-3-
<PAGE>
ARTICLE 2
GRANT OF RIGHTS
2.1 License Grant. Bioject hereby grants to AngioSense, an exclusive,
royalty-bearing, worldwide license, with the right to grant sublicenses, under
the Licensed Technology and Bioject's interest in Improvements to develop, make
and have made, as set forth in Section 5.5.2, use, distribute, sell and import
Products in the Field.
2.2 Right of First Refusal in the Extended Field. Bioject hereby grants to
AngioSense a right of first refusal to obtain an exclusive license, with the
right to grant sublicenses, under the Licensed Technology and Bioject's interest
in Improvements to develop, make or have made subject to Section 5.5.2, use,
distribute, sell and import products in the Extended Field. Upon receipt of
Bioject's notice of intent to negotiate a license for the Licensed Technology in
the Extended Field, the parties shall negotiate in good faith the terms of such
license within sixty (60) days. In the event the parties are unable to agree on
such terms, Bioject shall be free to enter into an agreement with a third party
on the same terms as offered to AngioSense.
2.3 Disclosure of Licensed Technologies. Upon the request of AngioSense,
Bioject shall provided AngioSense with access to Technical Information as
reasonably necessary for AngioSense to exploit the licenses granted in the
Agreement.
2.4 Diligence. AngioSense shall use all commercially reasonable efforts to
commercialize the Product as soon as reasonably possible. Within ninety (90)
days after the Effective Date, AngioSense shall submit to Bioject a plan
describing AngioSense's efforts to achieve commercialization of the Product.
Such schedule shall be updated and revised as reasonably acceptable to both
parties each six (6) months thereafter . In the event the parties are unable to
agree on such plan, or progress under such plan, the provisions of Section
15.2.1 shall apply.
2.5 Prohibition on Reverse Engineering. AngioSense shall not reverse
engineer the Products.
ARTICLE 3
EQUIPMENT
3.1 Use of Equipment. AngioSense shall acquire, at its own expense, and
install or have installed at the Bioject's Facility, the equipment to be listed
in Exhibit B, attached hereto, created and amended as needed throughout the term
of this Agreement ("Equipment"). Additions or changes to Exhibit B shall be
approved in writing by both parties. Bioject may utilize the Equipment for any
use other than for the manufacture of Product for AngioSense with the prior
written consent of AngioSense on terms to be negotiated in good faith by the
parties. Equipment shall also include but shall not be limited to (1) all future
purchased manufacturing equipment (e.g., tools, molds, etc.) and
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(2) all product components supplied by AngioSense to Bioject. The Equipment
shall, at all times, remain the sole and exclusive property of AngioSense.
3.2 Repair and Maintenance. Bioject, at its expense, shall make all
necessary site preparations and cause the Equipment to be operated in accordance
with any applicable operating manuals and manufacturer's instructions. Bioject
shall effect and bear the expense of all necessary repair, maintenance,
operation and replacements required to be made to maintain the Equipment in good
condition, reasonable wear and tear excepted, and to comply with all applicable
laws to which the use and operation of the Equipment may be or become subject.
All replacement Equipment and parts furnished in connection with such
maintenance or repair shall immediately become the property of AngioSense and
part of the Equipment for all purposes hereof. All such maintenance, repair and
replacement services shall be immediately paid for and discharged by Bioject
with the result that no lien under any applicable laws will attach to the
Equipment as a result of the performance of such services or the provision of
any such material.
3.3 Insurance. Bioject shall obtain and maintain for the term of this
Agreement, at its own expense, (a) "all risk" insurance against loss or damage
to the Equipment, (b) commercial general liability insurance (including
contractual liability, products liability and completed operations coverage)
reasonably satisfactory to AngioSense, and (c) such other insurance against such
other risks of loss and with such terms, as shall in each case be reasonably
satisfactory to or reasonably required by AngioSense (as to carriers, amounts
and otherwise). The amount of the "all risk" insurance shall be equal to the
replacement value of all Equipment and must otherwise be reasonably satisfactory
to AngioSense as of each anniversary date of this Agreement.
3.4 Replacement. If any items of Equipment shall become lost, stolen,
destroyed, or damaged beyond repair for any reason, or in the event of
condemnation, confiscation, seizure or requisition of title to or use of such
items (collectively, an "Event of Loss"), Bioject shall promptly pay to
AngioSense the fair market value of the Equipment subject to the Event of Loss
as determined by an objective third party evaluator agreeable to both parties.
Upon payment of such amount by Bioject, AngioSense will transfer to Bioject, "AS
IS, WHERE IS, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY," all of AngioSense's
right, title and interest, if any, in such items of Equipment.
3.5 Ownership. AngioSense and Bioject confirm their intent that title to
the Equipment shall remain in AngioSense (or its successors and assigns)
exclusively. If requested by AngioSense, Bioject will affix plates or markings
on the Equipment and on any operating manuals and manufacturer's instructions
indicating the interests of AngioSense and its assigns therein, and Bioject will
not allow any other indicia of ownership or other interest in the Equipment to
be placed on the Equipment. Bioject shall not sell, assign, grant a security
interest in, sublet, pledge, hypothecate or otherwise encumber or suffer a lien
upon or against the Equipment.
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3.6 Location. Bioject may move such Equipment from the Bioject's Facility
only if Bioject gives at least thirty (30) days prior written notice of the
relocation or provides such other documentation as AngioSense reasonably
requests to protect its interest in the Equipment.
3.7 Documents. Bioject shall keep copies of all operating manuals and
manufacturer's instructions with respect to the Equipment in good condition at
the Facility.
3.8 Right of First Refusal. In the event AngioSense should decide to sell
or otherwise dispose of any or all of the Equipment, Bioject shall have the
right of first refusal to purchase such Equipment at AngioSense's good faith
determination of the Equipment's fair market value. If Bioject elects not to
purchase the Equipment under this Section 3.8, Bioject shall, at AngioSense's
expense, return the Equipment to AngioSense in the same condition as delivered,
normal wear and tear expected, at such location as AngioSense shall designate.
ARTICLE 4
EQUITY
4.1 Equity. AngioSense shall issue to Bioject 277,222 shares of AngioSense
Common Stock upon completion of the milestones set forth on the Milestone and
Stock Payment Schedule set forth on Exhibit C and upon execution of the Stock
Purchase Agreement attached as Exhibit D.
ARTICLE 5
SUPPLY OF PRODUCT
5.1 Terms and Conditions. All supply of Product by Bioject and all
purchases of Product by AngioSense hereunder shall be subject to the terms and
conditions of this Article 5.
5.2 Product Supply. Subject to the terms and conditions of this Article 5
and, except as set forth in Section 5.5.2, Bioject shall supply AngioSense with
AngioSense's commercial requirements for Product in accordance with applicable
Good Manufacturing Practices (GMP) as established by the FDA. Except as set
forth in Section 5.5.2, AngioSense shall purchase all of its commercial
requirements for Product from Bioject. AngioSense will notify Bioject promptly
upon receipt of FDA approval to market the Product for any drug or non-drug for
any indication in the Field. At such time, Bioject and AngioSense will negotiate
in good faith, reasonable quarterly minimum purchase requirements by AngioSense.
In the event the parties are unable to agree, the provisions of Section 15.2.1
shall apply.
5.3 Forecasts. During the term of this Agreement, at least thirty (30) days
prior to the start of any calendar month, AngioSense shall provide Bioject with
a rolling written forecast of the quantities of Product (on a Product-by-Product
basis) estimated to be required on a month-by-month basis for twelve (12)
consecutive months ("M1" to "M12", respectively). Each forecast prior to the
launch of a particular Product shall also identify an anticipated launch date
for such Product. Except
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as set forth in Section 5.4 below, AngioSense will provide such forecasts as a
means of production planning only and shall not constitute a binding obligation
upon Bioject or AngioSense.
5.4 Orders.
5.4.1 Orders. Together with each forecast provided under Section 5.3
above, AngioSense shall place its firm order with Bioject for delivery of
Product for the following three (3) month period.
5.4.2 Form of Order. AngioSense's orders shall be made pursuant to a
written purchase order which is in a form mutually acceptable to the parties,
and shall provide for shipment in accordance with reasonable delivery schedules
as may be agreed upon from time to time by Bioject and AngioSense.
5.5 Delivery. Bioject shall ship forecasted quantities of Product in
accordance with orders submitted and accepted in accordance with Section 5.4
above.
5.5.1 Allocation. In the event that Bioject is unable to supply
both worldwide requirements of Product (on a Product-by-Product basis) and
quantities ordered by AngioSense under Section 5.4 above due to force majeure or
otherwise, Bioject shall allocate the quantities of Product that Bioject has in
inventory, and that Bioject is able to produce, so that AngioSense receives at
least its proportional share of available supplies as determined based on
reasonable forecasts (taking into consideration past usage and usage performance
against forecast) of AngioSense, Bioject and Bioject's other distributors.
5.5.2 Right to Manufacture. If for three (3) consecutive months
Bioject fails to adequately supply AngioSense's requirements of a particular
Product, and provided that such failure will or does result in a substantial
interruption of supply of one or more Products to the commercial market and is
not due to action or inaction of AngioSense, then AngioSense may manufacture (or
have manufactured) pursuant to this Section 5.5.2 such Product. A failure to
"adequately supply AngioSense's requirements" shall mean a failure to supply
AngioSense ninety percent (90%) of the quantities of a Product subject to a firm
order in accordance with this Agreement, in any three (3) consecutive months.
5.5.2.1 License to Manufacture. Subject to all other terms
and conditions of this Agreement, Bioject hereby grants to AngioSense, and
AngioSense hereby accepts a license (the "Bioject License") under the Licensed
Technology, with right of sublicense, to make and have made the Product (which
Bioject has failed to adequately supply as set forth above) for incorporation in
Products hereunder.
5.5.2.2 Exercise of the Bioject License. AngioSense agrees
not to exercise any of its rights under the Bioject License except to the extent
expressly permitted in this Section 5.5.2 above. In such event, Bioject shall
provide to AngioSense copies of all documentation
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within Bioject's control that are reasonably necessary for AngioSense to
manufacture (or have manufactured) Product, and shall reasonably cooperate with
AngioSense to establish alternative supply, including sources of materials.
AngioSense may exercise its right to have Product manufactured in accordance
with this Section 5.5.2 through a third party contract manufacturer.
5.5.2.3 Return of Equipment. Immediately upon AngioSense's
exercise of the Bioject License pursuant to Section 5.5.2.2, Bioject shall
immediately allow AngioSense, at AngioSense's expense, to pack and ship all
Equipment to a designation specified by AngioSense. In such event, the transfer
price of Product shall be reduced to zero.
5.6 Invoicing. Bioject shall submit an invoice to AngioSense upon shipment
of Product ordered by AngioSense. All invoices shall be sent to AngioSense's
address for notices hereunder, and each such invoice shall state AngioSense's
aggregate and Transfer Price (as defined in Section 6.1 below) for Product in a
given shipment, plus any insurance, taxes or other costs incident to the
purchase or shipment initially paid by Bioject but to be borne by AngioSense
hereunder.
5.7 Shipping. All Product delivered pursuant to the terms of this Agreement
shall be suitably packed for shipment by Bioject, marked for shipment to the
destination point indicated in AngioSense's purchase order. All Product will be
delivered FCA (Incoterms 1990) the United States shipping point designated by
Bioject. The carrier shall be selected AngioSense. All shipping and insurance
costs, as well as any special packaging expenses, shall be paid by AngioSense.
5.8 Product Acceptance. All shipments and all shipping and other charges
shall be deemed correct unless Bioject receives from AngioSense, no later than
thirty (30) days after after the shipment date, written notice specifying the
shipment, the purchase order number, and the nature of the discrepancy between
the order and the shipment or the exact nature of the discrepancy in the
shipping or other charges, as applicable. Each shipment of Product hereunder
shall be accompanied by certified quality control protocol such and other
information as may be reasonably requested by AngioSense from time to time for
each lot of Product therein as well as such customs and other documentation as
is necessary or appropriate.
5.9 Return of Product. All returns of Product shall be in accordance with a
mutually agreeable product return protocol.
ARTICLE 6
TRANSFER PRICE; ROYALTIES; PAYMENTS; BOOKS AND RECORDS
6.1 Transfer Price. Subject to the provisions of Section 5.5.2.3, the
transfer price of such a Product supplied to AngioSense hereunder shall be as
set forth in Exhibit E (the "Transfer Price"). Notwithstanding the foregoing,
the Transfer Price shall be subject to an annual increase not to exceed the
greater of *** percent (***%) or the increase in the *** for the immediately
preceding year. Bioject will give AngioSense thirty (30) days' prior written
notice
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of such increase. With respect to amount due to Bioject for Products supplied to
AngioSense hereunder, AngioSense shall pay Bioject within thirty (30) days of
invoice or date of shipment of such Product, whichever is later.
6.2 Inventory. AngioSense shall maintain a quantity of each Product at all
times during the term of this Agreement I as AngioSense deems appropriate, in
its sole discretion, necessary in order to meet the demand and service level
requirements of AngioSense's customers and potential customers.
6.3 Royalties. AngioSense agrees to pay Bioject as follows during the term
of this Agreement:
(a) a royalty equal to *** percent (***%) of *** on Vitajet Products
sold, leased, distributed or transferred in exchange for payment by AngioSense,
its Affiliates or Sublicensees covered by a Valid Claim of a Licensed Patent, or
any patent which claims Joint Inventions, in the country in which such Vitajet
Products are sold;
(b) a royalty equal to *** percent (***%) of *** on B2000 Products
sold, leased, distributed or transferred in exchange for payment by AngioSense,
its Affiliates or Sublicensees covered by a Valid Claim of Licensed Patent, or
any patent which claims Joint Inventions, in the country in which such B2000
Products are sold.
Payments shall be made under only one of (a) or (b) above, as applicable,
and on no more than one sale transaction for each Product. No multiple royalties
shall be payable regardless of the fact that the manufacture, use or sale of a
Product may be covered by more than one Valid Claim licensed hereunder. For the
removal of doubt, the royalties payable under this Section 6.3 shall continue to
apply after the manufacturing license in Section 5.5.2 becomes effective. Such
royalties shall not in any way apply to syringes sold with or to be used with
the B2000 Product and/or the Vitajet Product.
6.4 Sublicense Fees. AngioSense shall pay to Bioject *** percent (***%) of
revenue received from sublicensees for upfront license fees and milestone fees,
excluding revenue received for *** and for ***.
6.5 Payments. With respect to royalties due on sales of Product hereunder,
AngioSense shall provide to Bioject a quarterly royalty report as follows: After
the first sale of a Product hereunder, within forty-five (45) days after the end
of each calendar quarter, AngioSense shall deliver to Bioject a true and
accurate report, giving such particulars of the business conducted by
AngioSense, its Affiliates and Sublicensees, if any, during such calendar
quarter as are pertinent to account for royalties due under Sections 6.3 and 6.4
above, except upon AngioSense's exercise of the rights granted under Section
5.5.2, in which case AngioSense will make such reports and payments to Bioject
within forty-five (45) days after the end of the AngioSense's fiscal year. Such
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report shall include at least (i) the total of Net Sales of Product during such
quarter; (ii) the calculation of royalties; and (iii) the total royalties so
calculated and due Bioject. Simultaneously with the delivery of each such
report, AngioSense shall pay to Bioject the total royalties, if any, due to
Bioject for the period of such report. AngioSense shall make all payments to
Bioject under this Agreement by wire transfer in United States dollars in
immediately available funds to a bank designated by Bioject.
6.6 Third Party Royalties. If AngioSense licenses or otherwise acquires
rights from a third party necessary to use the Bioject Technology in connection
with the sale or use of any Product within the Field in the Territory, then
AngioSense shall have the right to deduct the amounts actually paid by
AngioSense to the third party against royalties payable under Section 6.3 above,
unless such technology is protected by a patent owned by AngioSense or its
Affiliates. Notwithstanding the foregoing, in no event shall the royalties due
Bioject be reduced to less than one-third of the royalties payable before the
deduction described in this Section 6.6
6.7 Records; Inspection. AngioSense shall keep, and require its Affiliates
and Sublicensees to keep, complete, true and accurate books of accounts and
records for the purpose of determining the amounts payable under this Article 6.
Such books and records shall be kept for at least three (3) years following the
end of the calendar quarter to which they pertain. Such records will be open for
inspection during such three (3) year period by an independent auditor chosen by
Bioject and reasonably acceptable to AngioSense for the purpose of verifying the
amounts payable by AngioSense under this Article 6. Such inspections may be made
no more than once each calendar year, at reasonable times and on reasonable
notice. The independent auditor shall be obligated to execute a reasonable
confidentiality agreement prior to commencing any such inspection. Inspections
conducted under this Section 6.6 shall be at the expense of Bioject, unless a
variation or error producing an underpayment in amounts payable exceeding five
percent (5%) of the amount paid for any period covered by the inspection is
established in the course of any such inspection, whereupon all costs relating
to the inspection for such period and any unpaid amounts that are discovered
shall be paid by AngioSense, together with interest on such unpaid amounts equal
to the lesser of the prime rate as reported in The Wall Street Journal (U.S.,
Eastern edition) on the last day of the calendar quarter which such unpaid
amounts applied plus one percent (1%) per month or the maximum rate permitted by
applicable law, calculated on the number of days overdue. The parties will
endeavor to minimize disruption of AngioSense's normal business activities to
the extent reasonably practicable.
ARTICLE 7
COMMERCIALIZATION
7.1 Technical Literature. Bioject shall provide to AngioSense appropriate
technical literature relating to the Products developed by Bioject hereunder
from time to time during the term of this Agreement to assist AngioSense in
developing appropriate technical literature and marketing materials to support
its sales force for the Product.
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7.2 Product Packaging and Labeling. The trade dress, style of packaging and
the like with respect to each Product will be determined by AngioSense so as to
be consistent with AngioSense's standard trade dress and style. AngioSense shall
be responsible for any increase in packaging and labeling costs over Bioject's
current standard costs.
ARTICLE 8
PRODUCT WARRANTY
8.1 Product Warranty. Bioject warrants to AngioSense that at the time of
delivery to AngioSense the Products purchased by AngioSense shall (i) have been
manufactured in compliance with Good Manufacturing Practices (GMP) as
established by the FDA and (ii) conform to the Specifications for the Products.
Bioject makes no warranty (express, implied, or statutory) for Products that are
modified or subjected to accident, misuse, neglect or improper storage. If any
Product supplied hereunder fails to conform to the applicable Specifications,
AngioSense shall notify Bioject no later than thirty (30) days after its
discovery of the nonconformity (but in no event later than one hundred and
eighty-five (185) days after delivery) and AngioSense shall present reasonable
evidence to Bioject of such nonconformity. Bioject agrees to replace, at no
additional expense to AngioSense, such nonconforming Product with a new Product
which conforms to the applicable Specifications within thirty (30) days after
receipt of AngioSense's notification under this Section 8.1. Bioject may analyze
any Product rejected by AngioSense for nonconformity and if it is objectively
established that the Product was conforming, then AngioSense shall be
responsible for payment of such Product. All returns shall be as set forth in
Section 5.9 above. Bioject's sole obligation under the warranty stated above
shall be to repair or replace at Bioject's option any nonconforming Products.
OTHER THAN AS EXPRESSLY SET FORTH HEREIN, BIOJECT MAKES NO OTHER WARRANTIES,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 9
INTELLECTUAL PROPERTY
9.1 Ownership of Inventions. Subject to the rights and licenses granted
herein, all right, title and interest in and to all inventions and other
intellectual property made solely by personnel of a party hereto in connection
with the performance of such party's obligations hereunder shall be owned solely
by such party (a "Sole Invention"). Likewise, subject to the rights and licenses
granted herein, all right, title and interest in and to all inventions and other
intellectual property made jointly by personnel of AngioSense and Bioject (a
"Joint Invention") shall be assigned to AngioSense; provided, however, that
AngioSense hereby grants to Bioject a royalty-free exclusive worldwide license
(with the right to sublicense) under such Joint Invention to develop, make, have
made, use, import, distribute, and sell products in all areas outside the Field
and outside the licensed portions of the Extended Field. Each
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party shall promptly notify the other party in writing of any Joint Inventions.
Bioject shall ensure all employees and consultants of Bioject, assist AngioSense
in accomplishing the foregoing assignment.
For any patent application covering an AngioSense Sole Invention having
claims that include or reference to technology covered by any Bioject patent
(now existing or issued during the term of this Agreement) related to jet
injection, AngioSense will (a) advise Bioject of the filing of such patent
application, and (b) if and when such patent application issues as a patent and
that patent is licensed to a third party, or the claimed subject matter thereof
is otherwise commercialized, AngioSense will advise Bioject of the licensing or
commercialization opportunity and negotiate with Bioject in good faith an
arrangement to share revenues derived from such licensing or commercialization
opportunity, based upon the relative contribution of the Bioject technology, as
defined in the claims of such AngioSense Sole Invention patent, to the revenue
opportunity.
For any patent application covering a Bioject Sole Invention having claims
that include or reference to technology covered by any AngioSense patent (now
existing or issued during the term of this Agreement) related to the delivery of
a drug or biologic agent to the cardiac or cardiovascular system via (i) a
catheter or (ii) a non-catheter based delivery method, Bioject will (a) advise
AngioSense of the filing of such patent application, and (b) if and when such
patent application issues as a patent and that patent is licensed to a third
party, or the claimed subject matter thereof is otherwise commercialized,
Bioject will advise AngioSense of the licensing or commercialization opportunity
and negotiate with AngioSense in good faith an arrangement to share revenues
derived from such licensing or commercialization opportunity, based upon the
relative contribution of the AngioSense technology, as defined in the claims of
such Bioject Sole Invention patent, to the revenue opportunity.
9.2 Patent Prosecution.
9.2.1 Sole Inventions. Each party shall, at its expense, control the
preparing, filing, prosecuting and maintaining the patent applications developed
solely by its employees during the course of this Agreement.
9.2.2 Joint Inventions. AngioSense shall have the first right to
prepare, file, prosecute and maintain patent applications and patents which
claim Joint Inventions. Without limiting the foregoing, AngioSense agrees to
first consult with Bioject as to the preparation, filing, prosecution and
maintenance of such patents and patent applications and shall furnish to Bioject
copies of documents relevant to any such preparation, filing, prosecution and
maintenance and AngioSense further agrees to incorporate all of Bioject's
reasonable comments with respect thereto. In the event that AngioSense elects
not to pay any costs and fees with respect to a particular patent or patent
application covering a Joint Invention then AngioSense shall give Bioject at
least thirty (30) days prior written notice thereof and shall assign to Bioject
all of its right, title and interest therein.
9.2.3 Cooperation. Bioject shall cooperate with AngioSense in
connection with such activities, at AngioSense's request and expense.
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9.3 Defense of Third Party Infringement Claims. If the sale or use of any
Product within the Field in the Territory pursuant to this Agreement results in
a claim, suit or proceeding brought by a third party against AngioSense or
Bioject alleging infringement of such third party's patents ("Action"), such
party shall promptly notify the other party hereto in writing. The party subject
to such Action shall have the exclusive right to defend and control the defense
of any such Action using counsel of its own choice, and the Action shall be at
such party's own expense; provided, however, that the other party may
participate in the defense and/or settlement thereof at its own expense with
counsel of its choice. The party subject to the Action agrees to keep the other
party hereto reasonably informed of all material developments in connection with
any such Action.
9.4 Enforcement. If either party determines or has a reason to believe that
any Licensed Patents or any patent covering Joint Inventions necessary for the
manufacture, use or sale of a Product are being infringed by a third party or
are subject to a declaratory judgment action arising from such infringement, in
each case with respect to the manufacture, sale or use of a product in the
Territory within the Field that competes directly with any Products (an
"Infringement"), such party shall promptly notify the other party hereto.
9.4.1 By Bioject. Bioject shall have the first right (itself or
through others), at its sole option and expense, to bring suit to enforce the
intellectual property rights within such Licensed Technology and/or to defend
any declaratory judgment action with respect thereto, in each case with respect
to an Infringement (each, for purposes of this Section 9.4, an "Enforcement
Action").
9.4.2 By AngioSense. In the event Bioject elects not to initiate an
Enforcement Action against a commercially significant Infringement, within three
(3) months of a request by AngioSense to do so, AngioSense may initiate such
Enforcement Action at its expense with Bioject's prior written consent, as the
parties mutually agree. Bioject shall have the right to participate in any such
action with counsel of its own choice at its own expense.
9.4.3 Recoveries. All recoveries from an Enforcement Action shall be
first applied to reimburse the controlling party's and then the non-controlling
party's unreimbursed expenses, including without limitation, reasonable
attorney's fees and court costs. Any remainder shall, to the extent the same
relates to the Infringement, be treated as Net Sales.
9.4.4 Cooperation. In addition, with regard to any Enforcement Action
the non-controlling party shall cooperate with the controlling party, including
without limitation, by joining as a party plaintiff, executing documents and
making available all relevant personnel, records, papers, information, samples,
specimen and other similar materials in the non-controlling party's possession,
in each case as the controlling party may reasonably request.
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ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 Bioject Warranties. Bioject warrants and represents to AngioSense that
(i) it has the full right and authority to enter into this Agreement and grant
the rights granted herein; (ii) it has not previously granted and will not grant
any rights in conflict with the rights granted herein; (iii) to Bioject's
knowledge and belief, there are no threatened or pending actions, suits or
claims against it with respect to its right to enter into and perform its
obligations under this Agreement; and (iv) Bioject's obligations hereunder and
AngioSense's rights shall not be encumbered or in any way diminished by a Change
in Control of Bioject.
10.2 AngioSense Warranties. AngioSense warrants and represents to Bioject
that (i) AngioSense has the full right and authority to enter into this
Agreement and grant the rights granted herein; (ii) AngioSense has not
previously granted and will not grant any rights in conflict with the rights
granted herein; (iii) to AngioSense's knowledge and belief, there are no
existing or threatened actions, suits or claims pending against it with respect
to its right to enter into and perform its obligations under this Agreement and
(iv) AngioSense's obligations and Bioject's rights hereunder shall not be
encumbered or in any way diminished by a Change in Control of AngioSense.
ARTICLE 11
CONFIDENTIALITY
11.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the term of this Agreement and thereafter, the receiving
party shall not publish or otherwise disclose and shall not use for any purpose
any information furnished to it by the other party hereto pursuant to this
Agreement which if disclosed in tangible form is marked "Confidential" or with
other similar designation to indicate its confidential or proprietary nature, or
if disclosed orally is confirmed as confidential or proprietary by the party
disclosing such information at the time of such disclosure ("Confidential
Information"). Notwithstanding the foregoing, it is understood and agreed that
Confidential Information shall not include information that, in each case as
demonstrated by written documentation: (a) was already known to the receiving
party, other than under an obligation of confidentiality, at the time of
disclosure; (b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party; (c) became
generally available to the public or otherwise part of the public domain after
its disclosure and other than through any act or omission of the receiving party
in breach of this Agreement; or (d) was subsequently lawfully disclosed to the
receiving party by a person other than a party hereto or developed by the
receiving party without reference to any information or materials disclosed by
the disclosing party.
11.2 Permitted Disclosures. Notwithstanding the provisions of Section 11.1
above, each party hereto may disclose the other's Confidential Information to
the extent such disclosure is reasonably necessary, in filing or prosecuting
patent applications, prosecuting or defending litigation,
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complying with applicable governmental regulations, submitting information to
tax or other governmental authorities, or conducting clinical trials or in
exercising its rights hereunder (including granting any permitted sublicenses),
provided that if a party is legally required to make any such disclosure of
another party's Confidential Information, to the extent it may legally do so, it
will give reasonable advance written notice to the latter party of such
disclosure and, save to the extent inappropriate in the case of patent
applications, will use its reasonable efforts to secure confidential treatment
of such Confidential Information prior to its disclosure (whether through
protective orders or otherwise).
ARTICLE 12
INDEMNIFICATION
12.1 Indemnification of Bioject. AngioSense shall indemnify each of Bioject
and its directors, officers, and employees and the licensors, successors and
assigns of any of the foregoing (the "Bioject Indemnitees"), and hold each
Bioject Indemnitee harmless from and against any and all liabilities, damages,
settlements, claims, actions, suits, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' fees and other expenses of
litigation) (a "Claim") incurred by any Bioject Indemnitee, arising from or
occurring as a result of product liability claim except in which such claim is
due to a breach of Bioject's warranties under Sec. 8.1.
12.2 Indemnification of AngioSense. Bioject shall indemnify each of
AngioSense and its directors, officers, and employees and the successors and
assigns of any of the foregoing (the "AngioSense Indemnitees"), and hold each
AngioSense Indemnitee harmless from and against any and all liabilities,
damages, settlements, claims, actions, suits, penalties, fines, costs or
expenses (including, without limitation, reasonable attorneys' fees and other
expenses of litigation) (a "Claim") incurred by any AngioSense Indemnitee,
arising from or occurring as a result of breach of Bioject's warranties under
Section 8.1.
12.3 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 12 shall promptly notify the other party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its directors, officers, employees,
licensors, successors or assigns intends to claim such indemnification, and the
Indemnitor shall have sole control of the defense and/or settlement thereof. The
indemnity agreement in this Article 12 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the consent of
the Indemnitor, which consent shall not be withheld unreasonably. The failure to
deliver written notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Article 12 but the omissions so to deliver written notice to the Indemnitor
shall not relieve the Indemnitor of any liability that it may have to any
Indemnitee otherwise than under this Article 12. The Indemnitee under this
Article 12 and its employees, shall cooperate fully with the Indemnitor and its
legal representatives and provide full information in the investigation of any
Claim covered by this indemnification.
-15-
<PAGE>
ARTICLE 13
TERM AND TERMINATION
13.1 Term. This Agreement shall become effective as of the Effective Date
and, unless earlier terminated pursuant to the other provisions of this Article
13, shall continue in full force and effect for the longer of (i) fifteen (15)
years after the Effective Date or (ii) expiration, revocation or invalidation of
the last patent or abandonment of the last patent application within the
Licensed Patents.
13.2 Termination for Cause Either Bioject or AngioSense may terminate this
Agreement by written notice stating each party's intent to terminate in the
event the other shall have materially breached or defaulted in the performance
of any of its material obligations hereunder, and such default shall have
continued for sixty (60) days after written notice thereof was provided to the
breaching party by the nonbreaching party.
13.3 Bankruptcy Proceedings Either party hereto may terminate this
Agreement by notice to the other party, if (i) such other party shall make an
assignment of substantially all of its assets for the benefit of creditors, file
a petition in bankruptcy, petition or apply to any tribunal for the appointment
of a custodian, receiver or any trustee for such party or substantially all of
such party's assets, or shall commence any proceeding under any dissolution or
liquidation law or statute of any jurisdiction (provided that no entity succeeds
to the business of such party following such dissolution or liquidation) whether
now or hereafter in effect which is not dismissed within sixty (60) days; or
(ii) there shall have been filed any such petition or application against such
other party, or any such proceeding shall have been commenced against such
party, in which an order for relief is entered or which remains undismissed for
a period of ninety (90) days or more; or (iii) such other party by an act or
knowing failure to act shall indicate such party's consent to, approval of or
acquiescence in, any such petition, application or proceeding or order for
relief or the appointment of a custodian, receiver or any trustee for such
party, or any substantial part of any of such party's properties, or shall
suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of ninety (90) days or more.
13.4 Effect of Expiration and Termination.
13.4.1 Accrued Obligations. Termination of this Agreement for any
reason shall not release any party hereto from any liability which, at the time
of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination, nor preclude either party
from pursuing all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.
13.4.2 Products in Inventory. AngioSense shall purchase all Product
ordered pursuant to Section 5.4.1 as of the date of termination. AngioSense and
its Affiliates and Sublicensees shall have the right to distribute Products in
their inventories or otherwise in their
-16-
<PAGE>
control as of the termination of this Agreement for a period not to exceed six
(6) months from such termination, in all cases subject to the payments under
Article 6 above.
13.4.3 No Renewal, Extension or Waiver. Acceptance by Bioject of any
order for any Product from AngioSense after the effective date of termination of
this Agreement shall not be construed as a renewal or extension hereof, or as a
waiver of termination of this Agreement.
13.4.4 Return of Equipment. Immediately upon termination or expiration
of this Agreement, Bioject shall return to AngioSense all Equipment provided to
it under this Agreement at the location specified by AngioSense.
13.5 Survival. Articles 1, 8, 9, 10, 11, 12, 14 and 15; Sections 3.5, 6.7
and 13.4 shall survive expiration or termination of this Agreement for any
reason.
ARTICLE 14
LIMITATION OF LIABILITY
EXCEPT WITH RESPECT TO ANY CLAIM UNDER ARTICLE 12, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER OR ANY THIRD PARTY FOR COSTS OF PROCUREMENT OF
SUBSTITUTE GOODS, LOST PROFITS, OR ANY OTHER SPECIAL, CONSEQUENTIAL, OR
INCIDENTAL DAMAGES, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY ARISING OUT
OF THIS AGREEMENT WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), OR
OTHERWISE. THESE LIMITATIONS SHALL APPLY WHETHER OR NOT A PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL
PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN.
ARTICLE 15
MISCELLANEOUS
15.1 Governing Law. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with, the laws of the State of California, without reference to
conflicts of laws principles.
15.2 Disputes.
15.2.1 Resolution. Except with respect to either party's actions to
seek injunctive relief, in the event that Bioject and AngioSense, are unable to
resolve any dispute between them, either Bioject or AngioSense may, by written
notice to the other, have such dispute referred to the Chief Executive Officers
(or equivalent) of Bioject and AngioSense, for attempted resolution by good
faith negotiations within twenty-one (21) days after such notice is received.
Unless otherwise mutually agreed, the negotiations between the designated
officers shall be conducted by telephone,
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<PAGE>
within three (3) days and at times within the period stated above offered by the
designated officers of AngioSense to the designated officer of Bioject for
consideration.
15.2.2 Arbitration. AngioSense and Bioject agree that any dispute or
controversy arising out of, in relation to, or in connection with this
Agreement, or the validity, enforceability, construction, performance or breach
hereof, shall be settled by binding arbitration as set forth in Exhibit F.
15.3 Force Majeure. Nonperformance of any party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, delay or failure of suppliers, or any other reason where failure
to perform is beyond the reasonable control and not caused by the gross
negligence or willful misconduct of the nonperforming party.
15.4 No Implied Waivers; Rights Cumulative. No failure on the part of
Bioject or AngioSense to exercise and no delay in exercising any right under
this Agreement, or provided by statute or at law or in equity or otherwise,
shall impair, prejudice or constitute a waiver of any such right, nor shall any
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
15.5 Independent Contractors. Nothing contained in this Agreement is
intended implicitly, or is to be construed, to constitute Bioject or AngioSense
as partners in the legal sense. No party hereto shall have any express or
implied right or authority to assume or create any obligations on behalf of or
in the name of any other party or to bind any other party to any contract,
agreement or undertaking with any third party.
15.6 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by registered or
certified mail, return receipt requested, postage prepaid, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other parties hereto:
AngioSense: AngioSense, Inc
2611 Knollwood Drive
Cameron Park, California 95682
Attn: Robert C. Glines
with a copy to: Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attn: Casey McGlynn, Esq.
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<PAGE>
Bioject: Bioject, Inc.
7620 S.W. Bridgeport Road
Portland, Oregon 97224
Attn: Chief Financial Officer
with a copy to: Stoel Rivers LLP
900 S.W. 5th Avenue, Suite 2600
Portland, Oregon 92204
Attn: Annette Mulee, Esq.
15.7 Assignment. This Agreement shall not be assignable by either party to
any third party without the written consent of the other party hereto. Any
attempted assignment in violation of this Section 15.7 shall be null and void.
Notwithstanding the foregoing, AngioSense may assign this Agreement without
Bioject's consent to an entity that acquires all or substantially all of its
business or assets whether by merger, acquisition, or otherwise; provided that
such entity does not generate ten percent (10%) or more of its revenue from the
development, manufacture distribution of jet injection technology (Jet Injection
Entity). Assignment to any Jet Injection Entity is subject to the first sentence
of this Section 15.7.
15.8 Visiting Personnel. Certain activities of the parties hereunder may
include certain one party's personnel including without limitation senior
scientists visiting and/or being stationed at the other party's facilities for
some period of time; in such case such the visiting personnel shall be bound by
all rules and regulations pertaining to such facilities during the time at the
facilities and each party shall be responsible for and assume all risk of injury
or damage done or suffered by its personnel when such personnel are at the other
party's facilities, except for injury or damage caused by the negligence or
misconduct of the other party.
15.9 Modification. No amendment or modification of any provision of this
Agreement shall be effective unless in writing signed by all parties hereto. No
provision of this Agreement shall be varied, contradicted or explained by any
oral agreement, course of dealing or performance or any other matter not set
forth in an agreement in writing and signed by all parties.
15.10 Severability. If any provision hereof should be held invalid, illegal
or unenforceable in any jurisdiction, all other provisions hereof shall remain
in full force and effect in such jurisdiction and shall be liberally construed
in order to carry out the intentions of the parties hereto as nearly as may be
possible. Such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction.
15.11 Publicity. Each of the parties hereto agrees not to disclose to any
third party the terms and conditions of this Agreement without the prior written
consent of the other party hereto, except to advisors, investors and others on a
need-to-know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law.
-19-
<PAGE>
15.12 Headings. Headings used herein are for convenience only and shall not
in any way affect the construction of or be taken into consideration in
interpreting this Agreement.
15.13 No Implied Licenses. Except as expressly provided herein, no party
hereto grants to any other party hereto any rights or licenses under such
party's patent rights, trade secrets or other intellectual property rights.
15.14 Entire Agreement. This Agreement, including the Exhibits attached
hereto, constitutes the entire agreement with respect to the subject matter
hereof, and supersedes all prior or contemporaneous understandings or
agreements, whether written or oral, between Bioject and AngioSense with respect
to such subject matter.
15.15 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together, shall constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered effective as of the Effective Date.
Bioject, Inc. AngioSense, Inc.
("Bioject") ("AngioSense")
By: ------------------------------- By: -------------------------------
Name: ---------------------------- Name: -----------------------------
Title: ---------------------------- Title: ----------------------------
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<PAGE>
<TABLE>
Exhibit A
BIOJECT PATENTS
Docket
Date Patent Number Number Country Description Area of Protection
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
May 12,1981 4,266,541 USA Omnijet Hydraulic powered device
Jun 3, 1986 4,592,742 USA Vitajet 1,2 Spring powered device and syringe
June 24, 1986 4,596,556 USA Syringe & Injector
Dec. 13, 1988 4,790,824 USA Syringe & Injector
Jul. 10, 1990 4,940,460 USA Syringe & Injector
Jul. 17, 1990 4,941,880 187/087 USA Syringe & Injector 15 Claims - first generation technology
Oct. 25, 1990 662850 189/230 Australia Syringe 7 Claims - syringe tip, foreign version of
U.S. 5,312,335
Oct 30, 1990 4,966,581 USA Vitajet Corp. Prefill Plastic prefill cartidge
Nov. 1, 1990 EPO427457 189/230 Belgium Syringe 6 Claims - syringe tip, foreign version of
U.S. 5,312,335
Nov. 1, 1990 EPO427457 189/230 France Syringe 6 Claims - syringe tip, foreign version of
U.S. 5,312,335
Nov. 1, 1990 DE69017356 189/230 Germany Syringe 6 Claims - syringe tip, foreign version of
U.S. 5,312,335
Nov. 1, 1990 EPO427457 189/230 G. Britain Syringe 6 Claims - syringe tip, foreign version of
U.S. 5,312,335
Nov. 1, 1990 EPO427457 189/230 Italy Syringe 6 Claims - syringe tip, foreign version of
U.S. 5,312,335
Nov. 1, 1990 EPO427457 189/230 Spain Syringe 6 Claims - syringe tip, foreign version of
U.S. 5,312,335
Nov. 1, 1990 EPO427457 189/230 Switz/Liech Syringe 6 Claims - syringe tip, foreign version of
U.S. 5,312,335
Nov. 12, 1991 5,064,413 186/182 USA Syringe & Injector 30 Claims - pilot valve technology
Jul. 24, 1992 2028524 199/031 G. Britain B2000 Design Ornamentation aspects of the B2000
Jan. 20, 1993 M9300555.5 199/031 Germany B2000 Design Ornamentation aspects of the B2000
Jan. 22, 1993 929398 199/031 Japan B2000 Design Ornamentation aspects of the B2000
May 17, 1994 5,312,577 196/184 USA Syringe Mfg. Method 5 Claims - Method of molding orifice
May. 17, 1994 5,312,335 194/174 USA Syringe 11 Claims - Luer and shroud
Aug. 23,1994 Des. 349,958 199/031 USA B2000 Design Ornamentation aspects of the B2000.
Jan. 24, 1995 5,383,851 195/089 USA B2000 Apparatus 23 Claims - Injector and syringe
Mar. 21, 1995 5,399,163 202/206 USA B2000 Method 29 Claims - Parameters for injection
Apr. 2, 1996 5,503,627 206/107 USA Syringe 18 Claims - Luer and shroud
May 28, 1996 5,520,639 211/208 USA B2000 Apparatus 9 Claims - Additional B2000 claims
July 10, 1997 676490 202/206 Australia B2000 Method 29 Claims - Parameters for injection
May 5, 1998 5,746,714 USA Medivax Air powered device (low pressure)
Jul 21, 1998 5,782,802 USA Vitajet 3 Spring powered device and syringe
</TABLE>
<PAGE>
BIOJECT PATENT APPLICATIONS
<TABLE>
Date Docket Number Country Description Area of Protection
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
*** *** *** *** ***
*** *** *** *** ***
*** *** *** *** ***
*** *** *** *** ***
</TABLE>
<PAGE>
EXHIBIT B
EQUIPMENT
None
<PAGE>
EXHIBIT C
Milestone and Stock Payment Schedules for Bioject stock equity payment (1999)
VitaJet
In the event that each of the following four (4) milestones (each, a
"Vitajet Milestone") is achieved by or before the due date listed across from
such Milestone (each such date, a "Vitajet Milestone Due Date"), AngioSense
shall issue to Bioject 138,611 shares of Common Stock pursuant to the terms of
the Stock Purchase Agreement by and between Bioject and AngioSense and of even
date herewith (the "Stock Purchase Agreement"), which Stock Purchase Agreement
is attached as Exhibit D to the Agreement. If any one or more of the Vitajet
Milestones is not achieved by the applicable Vitajet Milestone Due Date, then
the condition precedent to AngioSense's obligation to issue shares to Bioject
pursuant to Section 4 of the Stock Purchase Agreement in connection with the
Vitajet Product will not be met and AngioSense shall have no obligation to issue
any such shares pursuant to such Section 4.
<TABLE>
Vitajet Milestones Due Date
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Provide AngioSense with prototype intraoperative device for use in animal) ***
2. Use commercially reasonable efforts to assist AngioSense, as reasonably requested, ***
prior to the Due Date in submitting 1st regulatory filing for
intraoperative device, whether or not AngioSense submits any such filing by
the Due Date. If such assistance is not requested prior to the Due Date,
this milestone will be deemed met as of the Due Date.
3. Provide necessary information and documentation to AngioSense, as ***
reasonably requested prior to the Due Date, for filing U.S. patent
application for intraoperative device, whether or not AngioSense submits
any such filing by the Due Date. If such information or documentation is
not requested prior to the Due Date this milestone will be deemed met as of
the Due Date.
4. Have Equipment, personnel, and protocols in place in preparation for volume ***
manufacture of intraoperative devices
</TABLE>
B2000
In the event that each of the following five (5) milestones (each, a "B2000
Milestone") is achieved by or before the due date listed across from such B2000
Milestone (each such date, a "B2000 Milestone Due Date"), AngioSense shall issue
to Bioject 138,611 shares of Common Stock pursuant to the terms of the Stock
Purchase Agreement. If any one or more of the B2000 Milestones is not achieved
by the applicable B2000 Milestone Due Date, then the condition precedent to
AngioSense's obligation to issue shares to Bioject pursuant to Section 5 of the
Stock Purchase
<PAGE>
Agreement in connection with the B2000 Product will not be met and AngioSense
shall have no obligation to issue any such shares pursuant to such Section 5.
<TABLE>
B2000 Milestones Due Date
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Provide AngioSense with three devices for use with catheter systems to be tested in ***
animals
2. Use commercially reasonable efforts to assist AngioSense, as reasonably ***
requested prior to the Due Date, in submitting 1st regulatory filing for
catheter system, whether or not AngioSense submits any such filing by the
Due Date. If such assistance is not requested prior to the Due Date, this
milestone will be deemed met as of the Due Date.
3. Provide necessary information and documentation to AngioSense, as ***
reasonably requested prior to the Due Date, for filing of U.S. patent
application for catheter-based system and percutaneous application, whether
or not AngioSense submits any such filing by the Due Date. If such
information or documentation is not requested prior to the Due Date this
milestone will be deemed met as of the Due Date.
4. Provide AngioSense with device for testing of catheter system in humans ***
5. Have Equipment, personnel, and protocols in place in preparation for volume ***
manufacture of B2000
</TABLE>
<PAGE>
EXHIBIT D
STOCK PURCHASE AGREEMENT
<PAGE>
EXHIBIT E
Transfer Pricing Schedule
<TABLE>
Annual Unit Purchases
Device 5,000 10,000 20,000 50,000 75,000 100,000
- ------------------------------------ ------------ ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
B-2000 *** *** *** *** *** ***
Vitajet 3 *** *** *** *** *** ***
Disposable Syringes *** *** *** *** *** ***
</TABLE>
* ***
<PAGE>
EXHIBIT F
ARBITRATION
(a) Initiation of Arbitration. A party ("Complaining Party") which intends
to begin an arbitration to resolve a Dispute as contemplated by Section of the
Agreement ("Arbitration") shall initiate the Arbitration by providing written
notice ("Arbitration Request") of such intent by certified or registered mail or
properly documented overnight delivery to the other party ("Responding Party").
The Arbitration Request shall include a copy of the Description of Dispute, set
forth a proposed solution to the Dispute, and include a suggested time frame
within which the parties must act to effect such solution. Contemporaneously
with sending the Arbitration Request, the Complaining Party shall submit a copy
of the Arbitration Request to the American Arbitration Association in the city
in which the Arbitration is to be conducted as provided in Paragraph (d) below.
(b) Selection of Arbitration. Any and all Disputes to be resolved pursuant
to Arbitration shall be submitted to a neutral arbitrator ("Arbitrator"). The
parties shall select the Arbitrator by mutual agreement but if the parties are
unable to agree, then the Arbitrator shall be selected in accordance with the
procedures of the American Arbitration Association. The Arbitrator shall be a
former judge of a state or federal court who shall not be a current or former
employee, director or shareholder of, or otherwise have any current or previous
relationship with, either party or its respective affiliates.
(c) American Arbitration Association Rules. The Arbitration shall be
conducted in accordance with the rules of the American Arbitration Association
then in effect, subject to the time periods and other provisions of this Exhibit
or as otherwise set forth in the Agreement.
(d) Hearing. Consistent with the time schedule established pursuant to this
paragraph (d) and Paragraph (e) below, the Arbitrator shall hold a hearing
("Hearing") to resolve each of the issues identified in the Description of
Dispute. To the extent practicable taking into account the nature of the Dispute
and the availability of the Arbitrator, the Hearing shall be conducted over a
period not to exceed two (2) consecutive business days, with each party entitled
to approximately half of the allotted time unless otherwise ordered by the
Arbitrator. The Hearing shall be conducted in a location to be mutually agreed
by the parties.
(e) Discovery. Within ten (10) days of receipt by the Responding Party of
the Arbitration Request the parties shall negotiate in good faith the scope and
schedule of discovery, including depositions, document production and other
discovery devices, taking into account the nature of the Dispute submitted for
resolution. If the parties are unable to reach agreement as to the scope and
schedule of discovery, the Arbitrator may order such discovery as he or she
deems necessary. In either case, such discovery shall be completed within sixty
(60) days from the date of the selection of the Arbitrator. At the hearing,
which shall commence within twenty (20) days after the completion of discovery
unless the Arbitrator otherwise orders, the parties may present testimony
(either live witness or deposition), subject to cross-examination, and
documentary evidence.
<PAGE>
(f) Hearing Submission. At least twenty (20) business days prior to the
date set for the Hearing, each party shall submit to each other and the
Arbitrator a list of all documents on which such party intends to rely in any
oral or written presentation at the Hearing, a list of all witnesses, if any,
such party intends to call at the Hearing and a brief summary of each witness'
testimony. At least five (5) business days prior to the Hearing, each party must
submit to the Arbitrator and serve on each other party proposed findings of fact
and conclusions of law on each issue to be resolved. Within five (5) days
following the close of the Hearing, each party shall each submit such
post-Hearing briefs to the Arbitrator addressing the evidence and issues to be
resolved as may be required or permitted by the Arbitrator.
(g) Arbitrator's Duties and Authority. The Arbitrator shall preside over
and resolve any disputes between the parties in connection with the Arbitration.
The Arbitrator shall have sole discretion with regard to the admissibility of
any evidence and all other matters relating to the conduct of the Hearing. The
Arbitrator shall, in rendering its decision, apply the substantive law of the
State of California. The decision of the Arbitrator shall be final and not
appealable, except in the case of fraud or bad faith on the part of the
Arbitrator in connection with the conduct of such proceedings.
(h) Decision and Award. The Arbitrator shall render a decision and award as
expeditiously as possible but in no event more than thirty (30) days after the
close of the hearing. In making the award the Arbitrator shall rule on each
disputed issue. Nothing contained herein shall be construed to permit the
Arbitrator or any court or any other forum to award punitive, exemplary or any
similar damages. By entering into the Agreement and exercising their rights to
arbitrate, the parties expressly waive any claim for punitive, exemplary or any
similar damages. The only damages recoverable under this Agreement are
compensatory damages.
(i) Costs and Expenses. Each party shall pay its own costs (including,
without limitation, reasonable attorneys' fees) and expenses in connection with
the Arbitration; provided, however, that if the Arbitrator determines that the
action of any party was arbitrary, frivolous or in bad faith, the Arbitrator may
award such costs and expenses to the prevailing party.
(j) Confidentiality. The Arbitration shall be confidential and, except as
required by law, neither party shall make (or instruct the Arbitrator to make)
any public announcement with respect to the proceedings or decision of the
Arbitrator without the prior written consent of the other party. The existence
of any Dispute, and the award of the Arbitrator, shall be kept in confidence by
the parties and the Arbitrator, except as required in connection with the
enforcement of such award or as otherwise required by applicable law.
(k) Jurisdiction to Enforce Award. For the purposes of these arbitration
provisions, the decision may be entered in any court of competent jurisdiction.
(l) Exclusive Procedures. The procedures specified herein shall be the sole
and exclusive procedures for the resolution of Disputes between the parties
which are expressly identified for resolution in accordance with these
arbitration provisions.
<PAGE>
EXHIBIT D
ANGIOSENSE, INC.
STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made this 21st day of September, 1999,
between AngioSense, Inc., a Delaware corporation (the "Company") and Bioject,
Inc., an Oregon corporation ("Bioject").
The parties agree as follows:
1. Issuance of Stock. Upon (i) the satisfaction of certain conditions
precedent set out in Sections 3 and 4 below, or (ii) the occurrence of an event
contemplated by Section 5 hereof, the Company hereby agrees to issue to Bioject
up to an aggregate maximum of 277,222 shares of the Company's Common Stock (the
"Shares").
2. Consideration. The Shares shall be issued in consideration for the
rights granted and performance rendered under that certain Exclusive License
Agreement between the Company and Bioject of even date herewith ("Agreement I").
3. Issuance of Shares upon Vitajet Milestone Achievement. Upon execution of
this Agreement and Agreement I, and the achievement of all of the Vitajet
Milestones (as such term is defined in Exhibit C of Agreement I) by the
applicable Vitajet Milestone Due Dates (as such term is defined in Exhibit C of
Agreement I), the Company shall issue to Bioject 138,611 of the Shares and shall
issue a duly executed certificate evidencing such shares in the name of Bioject.
4. Issuance of Shares upon B2000 Milestone Achievement. Upon execution of
this Agreement and Agreement I, and the achievement of all of the B2000
Milestones (as such term is defined in Exhibit C of Agreement I) by the
applicable B2000 Milestone Due Dates (as such term is defined in Exhibit C of
Agreement I), the Company shall issue to Bioject 138,611 of the Shares and shall
issue a duly executed certificate evidencing such shares in the name of Bioject.
5. Issuance of Shares upon Change in Control. In the event of, and
immediately prior to the closing (the "Closing") of, the merger or consolidation
of the Company with or into another corporation, entity or person or the sale of
all or substantially all of the Company's assets to another corporation, entity
or person, the Company shall issue to Bioject (A) the number of the Shares that
would be issuable pursuant to Section 3 hereof if all conditions precedent to
such issuance under Section 3 were satisfied, provided that (x) the Closing date
is no later than the latest Vitajet Milestone Due Date and (y) none of the
Shares issuable pursuant to Section 3 have been issued pursuant to Section 3 as
of the Closing date and (B) the number of the Shares that would be issuable
pursuant to Section 4 hereof if all conditions precedent to such issuance under
Section 4 were satisfied, provided
-1-
<PAGE>
that (x) the Closing date is no later than the latest B2000 Milestone Due Date
and (y) none of the Shares issuable pursuant to Section 4 have been issued
pursuant to Section 4 as of the Closing date, all provided, however, that the
Company shall not be obligated to issue any shares pursuant to this Section 5 if
immediately after such merger, consolidation or sale of assets, more than 50% of
the capital stock or equity interests in such other corporation, entity or
person are owned by persons who owned in the aggregate more than 50% of the
capital stock of the corporation immediately before such merger, consolidation
or sale of assets.
6. Rights Agreement. Bioject and the Company shall enter into a Rights
Agreement, a form of which is attached hereto as Exhibit A, concurrently with
the execution of this Agreement.
7. Representations and Warranties of the Company. The Company represents
and warrants to Bioject that as of the date of this Agreement, except as
otherwise set forth on the Schedule of Exceptions attached hereto as Exhibit B
setting forth the exceptions which correspond to the numbered sections contained
in this Section 7.
7.1. Organization and Standing; Certificate and Bylaws. The Company is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets and to carry on its
business as presently conducted and as proposed to be conducted. The Company is
qualified to do business as a foreign corporation in each jurisdiction in which
such qualification is required and where failure to be so qualified would not
have a material adverse effect on the Company's business as now conducted or as
proposed to be conducted.
7.2. Corporate Power. The Company has all requisite legal and
corporate power to execute and deliver this Agreement, to sell and issue the
Shares hereunder and to carry out and perform its obligations under the terms of
this Agreement.
7.3. Capitalization. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock, $0.001 par value and 2,750,000
shares of Preferred Stock, 750,000 of which are designated Series A Preferred
Stock with a par value of $0.001 per share and 2,000,000 of which are designated
Series B Preferred Stock with a par value of $0.001 per share. The outstanding
capital stock of the Company as of the date of this Agreement is as set forth in
Section 7.3 of the Schedule of Exceptions. All issued and outstanding shares of
the Company's capital stock have been duly authorized and validly issued, are
fully paid and nonassessable, and were issued in compliance with applicable
federal and state securities laws. Except as set forth in Section 7.3 of the
Schedule of Exceptions, there are no other outstanding shares of capital stock
or outstanding rights of first refusal, preemptive rights or other rights,
options, warrants, conversion rights, or other agreements either directly or
indirectly for the purchase or acquisition from the Company of any shares of its
capital stock.
7.4. Subsidiaries. The Company has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
equity interest in any corporation, association or business entity.
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7.5. Authorization. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution, delivery and performance by the Company of this Agreement, the
authorization, issuance, sale and delivery of the Shares, and the performance of
all of the Company's obligations hereunder has been taken or will be taken prior
to the execution of this Agreement. This Agreement, when executed and delivered
by the Company, shall constitute a valid and legally binding obligation of the
Company enforceable in accordance with its respective terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies. The Shares, when issued in compliance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable, and the
Shares will be free of any liens or encumbrances created by the Company,
provided, however, that the Shares may be subject to restrictions on transfer
under applicable securities laws as set forth herein.
7.6. Title to Properties and Assets. The Company has good and
marketable title to its tangible properties and assets, and has good title to
all its leasehold interests, in each case subject to no mortgage, pledge, lien,
lease, loan, encumbrance or charge, except (i) the lien of current taxes not yet
due and payable, and (ii) possible minor liens and encumbrances which do not in
any case materially detract from the value of the property subject thereto or
materially impair the Company's operations, and which have not arisen otherwise
than in the ordinary course of business. With respect to property it leases, the
Company is in compliance with such leases in all material respects.
7.7. Compliance with Other Instruments. The Company is not in
violation of any term of its Certificate of Incorporation or Bylaws. The Company
is not in violation of, or in default in any material respect under, the terms
of any mortgage, indenture, contract, agreement, instrument, judgment or decree
applicable to it or to which it is a party, the violation of which would have a
material adverse effect on the Company as a whole, and the Company is not in
violation of any order, statute, rule or regulation applicable to the Company,
the violation of which would have a material adverse effect on the Company.
7.8. Litigation. There is no action, proceeding or investigation
pending, or to Company's knowledge threatened, against the Company or its
officers, directors or stockholders, or, to the Company's knowledge, against
employees or consultants of the Company which might result, either individually
or in the aggregate, in any material adverse change in the business, prospects,
conditions, affairs or operations of the Company. The Company is not a party to
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company currently pending or which the
Company currently intends to initiate.
7.9. Governmental Consents. No consent, approval or authorization of
or designation, declaration or filing with any governmental authority on the
part of the Company is required in connection with the valid execution and
delivery of this Agreement, or the offer, sale or issuance of the Shares except
qualification (or taking such action as may be necessary to secure an exemption
from qualification, if available) of the offer and sale of the Shares under
applicable Blue Sky laws, which filings and qualifications, if required, will be
accomplished in a timely manner.
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7.10. Brokers or Finders. The Company has not incurred, and will not
incur, directly or indirectly, as a result of any action taken by or on behalf
of the Company, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement.
7.11. Financial Statements. The Company has furnished Bioject with
copies of all financial statements of the Company available to the Company, and
the current version of the Company's business plan, as of June 21, 1999.
8. Investment Representations; Restriction on Transfer.
(a) In connection with the purchase of the Shares, Bioject represents
to the Company the following:
(i) Bioject is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the securities. Bioject is
purchasing these securities for investment for its own account only and not with
a view to, or for resale in connection with, any "distribution" thereof within
the meaning of the Securities Act of 1933 (the "Securities Act").
(ii) Bioject is an Accredited Investor, as that term is defined in
Regulation D of the Securities Act.
(iii) Bioject understands that the securities have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Bioject's
investment intent as expressed herein. In this connection, Bioject understands
that, in view of the Securities and Exchange Commission ("Commission"), the
statutory basis for such exemption may not be present if Bioject's
representations meant that its present intention was to hold these securities
for a minimum capital gains period under the tax statutes, for a deferred sale,
for a market rise, for a sale if the market does not rise, or for a year or any
other fixed period in the future.
(iv) Bioject further acknowledges and understands that the securities
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Bioject
further acknowledges and understands that the Company is under no obligation to
register the securities. Bioject understands that the certificate evidencing the
securities will be imprinted with a legend which prohibits the transfer of the
securities unless they are registered or such registration is not required in
the opinion of counsel for the Company.
(v) Bioject is aware of the adoption of Rule 144 by the Commission,
promulgated under the Securities Act, which permits limited public resale of
securities acquired in a non-public offering subject to the satisfaction of
certain conditions.
(vi) Bioject further acknowledges that in the event all of the
requirements of Rule 144 are not met, compliance with Regulation A or some other
registration exemption will be required, and that although Rule 144 is not
exclusive, the staff of the Commission has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and other than pursuant to Rule 144 will have a substantial burden of
proof in establishing that an
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<PAGE>
exemption from registration is available for such offers or sales and that such
persons and the brokers who participate in the transactions do so at their own
risk.
(b) Bioject agrees, provided that the officers and directors of the Company
agree to be bound by terms substantially identical to those contained in this
subsection 8(b), in connection with the Company's initial public offering of the
Company's securities, upon request of the Company or the underwriters managing
any underwritten offering of the Company's Securities, (i) not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any shares of Common Stock of the Company held by Bioject (other than those
shares included in the registration) without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to exceed one hundred eighty (180) days) from the effective date of such
registration as may be requested by the underwriters and (ii) further agrees to
execute any agreement reflecting (i) above as may be requested by the
underwriters at the time of the public offering.
9. Legends. The share certificate evidencing the Shares issued hereunder
shall be endorsed with the following legends:
(a) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS
THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT
SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
(b) Any legend required to be placed thereon by the California
Commissioner of Corporations or any other applicable state securities laws.
10. Adjustment for Stock Split. All references to the number of Shares and
the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
11. General Provisions.
(a) This Agreement shall be governed by the internal laws of the State
of California. This Agreement represents the entire agreement between the
parties with respect to the purchase of Common Stock by Bioject and supersedes
any prior agreement written or oral with respect to the purchase of Common Stock
by Bioject and satisfies all of the Company's obligations to Bioject with regard
to the issuance or sale of securities. This Agreement may only be modified or
amended in writing signed by both parties.
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(b) Any notice, demand or request required or permitted to be given by
either the Company or Bioject pursuant to the terms of this Agreement shall be
in writing and shall be deemed given when delivered personally or deposited in
the U.S. mail, First Class with postage prepaid, and addressed to the parties at
the addresses of the parties set forth at the end of this Agreement or such
other address as a party may request by notifying the other in writing.
(c) The rights and benefits of the Company under this Agreement shall
be transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of Bioject under
this Agreement may only be assigned with the prior written consent of the
Company.
(d) Either party's failure to enforce any provision or provisions of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions, nor prevent that party thereafter from enforcing each
and every other provision of this Agreement. The rights granted both parties
herein are cumulative and shall not constitute a waiver of either party's right
to assert all other legal remedies available to it under the circumstances.
(e) Bioject agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.
(f) Bioject understands that it (and not the Company) shall be
responsible for its own federal, state, local or foreign tax liability and any
of its other tax consequences that may arise as a result of the transactions
contemplated by this Agreement. Bioject shall rely solely on the determinations
of its tax advisors or its own determinations, and not on any statements or
representations by the Company or any of its agents, with regard to all such tax
matters.
(g) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first set forth above.
ANGIOSENSE, INC. BIOJECT, INC.
a Delaware corporation an Oregon corporation
By: ------------------------------- By: -------------------------------
Title: ---------------------------- Title: -------------------------------
- ----------------------------------- -----------------------------------
(Address) (Address)
- ----------------------------------- -----------------------------------
<PAGE>
EXHIBIT A
RIGHTS AGREEMENT
This Rights Agreement ("Agreement") is entered into as of September 21st,
1999 by and between AngioSense, Inc., a Delaware corporation (the "Company") and
Bioject, Inc., an Oregon corporation ("Bioject").
WHEREAS, Bioject and the Company are entering into (i) an Exclusive License
Agreement (referred to as "Agreement I") and, (ii) a Development and Supply
Agreement (referred to as "Agreement II"), both of even date herewith (such
agreements together, the "IP Agreements");
WHEREAS, Bioject and the Company are entering into a total of two (2) stock
purchase agreements of even date with this Agreement (the "Purchase Agreements")
in connection with and concurrently with the execution of the IP Agreements; and
WHEREAS, to induce Bioject to enter into the IP Agreements and the Purchase
Agreements, the Company and Bioject have agreed to enter into this Agreement to
provide for certain rights, privileges and preferences in favor of Bioject.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties agree as follows:
1. Certain Definitions. All terms not otherwise defined in this Agreement
shall have the meaning defined in the Stock Purchase Agreements. As used in this
Agreement, the following terms shall have the following respective meanings:
1.1 "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.2 "Holder" shall mean Bioject and any person holding Shares to whom
the rights under this Agreement have been transferred in accordance with Section
3.7 hereof.
1.3 "Registrable Securities" means Common Stock of the Company issued
pursuant to the Purchase Agreements or other securities convertible into or
exercisable for Common Stock upon any stock split, stock dividend,
recapitalization, or similar event, provided, however, that shares of Common
Stock or other securities shall only be treated as Registrable Securities for
the purposes of this Agreement (A) if and so long as they have not been sold to
or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, or (B) prior to the date such securities have
been sold or are all available for immediate sale in the opinion of counsel to
the Company in a transaction exempt from the prospectus delivery requirements of
the Securities Act so that all transfer restrictions and legends with respect
thereto are removed upon the consummation of such sale. 1.4
<PAGE>
1.4 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.
1.5 "Registration Expenses" shall mean all expenses, except as
otherwise stated below, incurred by the Company in complying with Section 3.1
hereof, including, without limitation, all registration, qualification and
filing 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 (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).
1.6 "Restricted Securities" shall mean the securities of the Company
required to bear the legend set forth in Section 2.2 hereof.
1.7 "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.
1.8 "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes and costs of special counsel to the
Holders, if any, applicable to the securities registered by the Holders.
2. Transferability.
2.1 Restrictions on Transferability. The Shares shall not be sold,
assigned, transferred or pledged except upon the conditions specified in this
Section 2, which conditions are intended to ensure compliance with the
provisions of the Securities Act. Bioject will cause any proposed purchaser,
assignee, transferee, or pledgee of the Shares held by Bioject to agree to take
and hold such securities subject to the provisions and upon the conditions
specified in this Section 2.
2.2 Restrictive Legend. Each certificate representing (i) the Shares
and (ii) any other securities issued in respect of the Shares upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar event,
shall (unless otherwise permitted by the provisions of Section 2.3 below) be
stamped or otherwise imprinted with a legend in the following form (in addition
to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS
THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT
SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
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THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION.
Bioject consents to the Company making a notation on its records and giving
instructions to any transfer agent of the Shares in order to implement the
restrictions on transfer established in this Section 2.
2.3 Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 2.3. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than (i) a
transfer not involving a change in beneficial ownership, or (ii) a transfer to
an affiliated fund, partnership or company, which is not a competitor of the
Company, subject to compliance with applicable securities laws, or (iii)
transfers in compliance with Rule 144, so long as the Company is furnished with
satisfactory evidence of compliance with such Rule), unless there is in effect a
registration statement under the Securities Act covering the proposed transfer,
the holder thereof shall give written notice to the Company of such holder's
intention to effect such transfer, sale, assignment or pledge. Each such notice
shall describe the manner and circumstances of the proposed transfer, sale,
assignment or pledge in sufficient detail, and shall be accompanied, at such
holder's expense by either (i) an unqualified written opinion of legal counsel
who shall, and whose legal opinion shall, be reasonably satisfactory to the
Company, which opinion shall be addressed to the Company and which opinion shall
be to the effect that the proposed transfer of the Restricted Securities may be
effected without registration under the Securities Act, or (ii) a "no action"
letter from the Commission to the effect that the transfer of such securities
without registration will not result in a recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the holder of
such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by the holder to
the Company. Each certificate evidencing the Restricted Securities transferred
as above provided shall bear, except if such transfer is made pursuant to Rule
144, the appropriate restrictive legend set forth in Section 2.2 above, except
that such certificate shall not bear such restrictive legend if in the opinion
of counsel for such holder and in the reasonable opinion of the Company such
legend is not required in order to establish compliance with any provision of
the Securities Act.
2.4 Removal of Restrictions on Transfer of Securities. Any legend
referred to in Section 2.2 hereof stamped on a certificate evidencing (i) the
Shares, (ii) any other securities issued in respect of the Shares upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar event
and the stock transfer instructions and record notations with respect to such
security shall be removed and the Company shall issue a certificate without such
legend to the holder of such security if such security is registered under the
Securities Act, or if such holder provides the Company with an opinion of
counsel (which may be counsel for the Company) reasonably acceptable to the
Company to the effect that a public sale or transfer of such security may be
made without registration under the Securities Act or (iii) such holder provides
the Company with reasonable assurances, which may, at the option of the Company,
include an opinion of counsel satisfactory to the Company, that such security
can be sold pursuant to Section (k) of Rule 144 under the Securities Act.
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3. Registration Rights.
3.1 Company Registration.
(a) Notice of Registration. If at any time or from time to time
the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, (ii) a registration
relating solely to a Commission Rule 145 transaction or (iii) a registration
relating to the initial underwritten public offering of the Company's securities
pursuant to a registration statement filed under the Securities Act:
(i) promptly give to each Holder written notice thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 10 days after receipt of such written notice from the
Company, by any Holder.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.1(a)(i). In such event the right of any Holder to
registration pursuant to this Section 3.1 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 3.1, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities and other securities to be distributed through such
underwriting to (i) in the case of the first underwritten public offering of the
securities of the Company, any amount or no amount, as the managing underwriter
may determine, or (ii) in the case of any registration subsequent to the first
underwritten public offering of the securities of the Company, to not less than
thirty three percent (33%) of the total securities covered by the registration.
The Company shall so advise all Holders distributing their securities through
such underwriting of such limitation and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders at the time of
filing the registration statement. To facilitate the allocation of shares in
accordance with the above provisions, the Company may round the number of shares
allocated to any Holder or holder to the nearest 100 shares. If any Holder or
holder disapproves of the terms of any such underwriting, such Holder or holder
may elect to withdraw therefrom by written notice to the Company and the
managing underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 90 days after the effective date
of the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
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(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 3.1 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 3.2 hereof.
3.2 Expenses of Registration. All Registration Expenses incurred in
connection with registrations pursuant to Section 3.1 shall be borne by the
Company. All Selling Expenses relating to securities registered on behalf of the
Holders shall be borne by the holders of securities included in such
registration pro rata with the Company and among each other on the basis of the
number of shares so registered.
3.3 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 3,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the lesser of (i) one
hundred eighty (180) days and (ii) the time required to complete the
distribution described in the registration statement;
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders participating in such registration and
to the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities.
(d) Furnish, at the request of any Holder requesting registration
of Registrable Securities that are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 3.3, (i) an opinion,
dated such date, of the counsel representing the Company for the purposes of
such registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
to the Holders requesting registration of Registrable Securities and (ii) a
letter dated such date, from the independent accountants of the Company, in form
and substance as is customarily given by independent accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
to the Holders requesting registration of Registrable Securities.
3.4 Indemnification.
(a) The Company will indemnify each Holder, each of its officers,
directors, partners and legal counsel, and each person controlling such Holder
within the meaning of
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Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Section 3, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each such Holder,
each of its officers, directors, partners, and legal counsel and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder, controlling person or underwriter and stated to be specifically for use
therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors, officers, and legal counsel, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other Holder, each of its officers, directors, partners
and legal counsel and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of each Holder under this
subsection (b) shall be limited in an amount equal to the proceeds to each such
Holder of Registrable Securities sold as contemplated herein, unless such
liability resulted from willful misconduct by such Holder. A Holder will not be
required to enter into any agreement or undertaking in connection with any
registration under this Section 3 providing for
-6-
<PAGE>
any indemnification or contribution on the part of such Holder greater than the
Holder's obligations under this Section 3.4(b).
(c) Each party entitled to indemnification under this Section 3.4
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 3 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate and
different defenses but shall bear the expense of such defense nevertheless. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.
3.5 Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 3.
3.6 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Securities Exchange Act of 1934, as
amended.
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended (at any time
after it has become subject to such reporting requirements);
(c) So long as a Purchaser owns any Restricted Securities to
furnish to the Purchaser forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public),
-7-
<PAGE>
and of the Securities Act and the Securities Exchange Act of 1934 (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as a Purchaser may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Purchaser
to sell any such securities without registration.
3.7 Transfer of Registration Rights. The rights to cause the Company
to register securities granted Holders under Section 3.1 may be assigned to a
transferee or assignee in connection with any transfer or assignment of
Registrable Securities by a Holder of not less than 138,611 shares of
Registrable Securities, or to any transferee or assignee who is a constituent
partner of a Holder or the estate of such constituent partner, provided that
such transfer may otherwise be effected in accordance with applicable securities
laws.
3.8 Standoff Agreement. Each Holder agrees, provided that the officers
and directors of the Company agree to be bound by terms substantially identical
to those contained in this Section 3.8, in connection with the Company's initial
public offering of the Company's securities, upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities, (i)
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any Registrable Securities (other than those included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days) from the effective date of such registration as may
be requested by the underwriters and (ii) further agrees to execute any
agreement reflecting (i) above as may be requested by the underwriters at the
time of the public offering.
3.9 Termination of Registration Rights. The rights granted under this
Section 3 shall terminate on the third anniversary of the consummation of the
initial underwritten public offering of the Company's securities pursuant to a
registration statement filed under the Securities Act.
4. Bioject's Right of First Refusal.
4.1 Right of First Refusal Upon Issuances of Securities by the
Company.
(a) The Company hereby grants, on the terms set forth in this
Section 4.1, to Bioject the right of first refusal to purchase all or any part
of Bioject's pro rata share of the New Securities (as defined in Section 4.1(b))
which the Company may, from time to time, propose to sell and issue. Bioject may
purchase said New Securities on the same terms and at the same price at which
the Company proposes to sell the New Securities. The pro rata share of Bioject
("Bioject's Pro Rata Share"), for purposes of this right of first refusal, is
(except as set forth in paragraph 4.1(e) below) the ratio of the total number of
shares of Common Stock held by Bioject, to the total number of shares of Common
Stock outstanding immediately prior to the issuance of the New Securities
(including any shares of Common Stock into which any outstanding shares of
Preferred Stock are convertible).
-8-
<PAGE>
(b) "New Securities" shall mean any capital stock of the Company,
whether now authorized or not, and any rights, options or warrants to purchase
said capital stock, and securities of any type whatsoever that are, or may
become, convertible into said capital stock; provided that "New Securities" does
not include (i) currently outstanding securities, (ii) securities issuable upon
conversion or exercise of or with respect to outstanding options or convertible
securities, (iii) securities offered pursuant to a registration statement filed
under the Securities Act, (iv) securities issued pursuant to the acquisition of
another corporation by the Company by merger, purchase of substantially all of
the assets or other reorganization, (v) all shares of Common Stock or other
securities hereafter issued or issuable to officers, directors, employees,
scientific advisors or consultants of the Company pursuant to any employee or
consultant stock offering, plan, arrangement or agreement approved by the Board
of Directors of the Company, (vi) all shares of Common Stock or other securities
hereafter approved for issuance by the Company's board of directors and issued
at fair market value (as determined in good faith by the Company's board of
directors) in connection with or as consideration for acquisition or licensing
of technology, (vii) all shares of Common Stock or other securities approved for
issuance by the Company's board of directors and issued at fair market value (as
determined in good faith by the Company's board of directors) in connection with
equipment leasing or equipment financing arrangements, (viii) up to 2,000,000
shares of Series B Preferred Stock which may be issued from time to time by the
Company.
(c) In the event the Company proposes to undertake an issuance of
New Securities, it shall give to Bioject written notice (the "Notice") of its
intention, describing the type of New Securities, the price, the terms upon
which the Company proposes to issue the same, and a statement as to the number
of days from receipt of such Notice within which Bioject must respond to such
Notice. Bioject shall have thirty (30) days from the date of receipt of the
Notice to purchase any or all of Bioject's Pro Rata Share of the New Securities
for the price and upon the terms specified in the Notice by giving written
notice to the Company and stating therein the quantity of New Securities to be
purchased and forwarding payment for such New Securities to the Company if
immediate payment is required by such terms, or in any event no later than
thirty (30) days after the date of receipt of the Notice.
(d) In the event Bioject fails to exercise in full the right of
first refusal within said thirty (30) day period, the Company shall have ninety
(90) days thereafter to sell or enter into an agreement (pursuant to which the
sale of New Securities covered thereby shall be closed, if at all, within thirty
(30) days from date of said agreement) to sell the New Securities and any
portion of Bioject's Pro Rata Share of New Securities respecting which Bioject's
rights were not exercised, at a price and upon general terms no more favorable
to the investors thereof than specified in the Notice. In the event the Company
has not sold the New Securities within said ninety (90) day period (or sold and
issued New Securities in accordance with the foregoing within thirty (30) days
from the date of said agreement), the Company shall not thereafter issue or sell
any New Securities without first offering such securities to Bioject in the
manner provided above.
(e) The right of first refusal granted under this Section 4.1
shall expire upon:
-9-
<PAGE>
(i) The date upon which a registration statement filed by
the Company under the Securities Act (other than a registration of securities in
a Rule 145 transaction or with respect to an employee benefit plan) in
connection with an underwritten public offering of its securities first becomes
effective and the securities registered thereunder are sold.
(ii) The date on which Bioject no longer holds a minimum of
138,611 Shares.
(f) The right of first refusal granted under this Section 4.1 is
not assignable with respect to blocks of less than 138,611 shares.
5. General Provisions.
5.1 Amendment and Waiver. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Shares. Any amendment or waiver effected in accordance with this Section 5.1
shall be binding upon each holder of any Shares at the time outstanding, each
future holder of all such securities and the Company.
5.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California.
5.3 Successors and Assigns. Except as otherwise expressly provided,
the provisions of this Agreement shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties.
5.4 Severability. In case any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be unenforceable, this
Agreement shall continue in full force and effect without said provision;
provided, however, that no such severability shall be effective if it materially
changes the economic benefit of this Agreement to any party.
5.5 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery or upon deposit with the United States Post Office, by
first class mail, postage prepaid, addressed: (a) if to Bioject, at its current
address or at such other address as Bioject shall have furnished to the Company
in writing, or (b) if to the Company, at its current address or at such other
address as the Company shall have furnished to Bioject in writing.
5.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which is an original, and all of which together shall
constitute one instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
ANGIOSENSE, INC. BIOJECT, INC.
a Delaware corporation an Oregon corporation
By: ------------------------------- By: -------------------------------
Title: ---------------------------- Title: -------------------------------
- ----------------------------------- -----------------------------------
(Address) (Address)
- ----------------------------------- -----------------------------------
<PAGE>
EXHIBIT B
SCHEDULE OF EXCEPTIONS
This Schedule of Exceptions is made and given pursuant to Section 7 of the
AngioSense, Inc. Stock Purchase Agreement dated September 21st, 1999 (the
"Agreement") by and between AngioSense, Inc., a Delaware corporation (the
"Company") and Bioject, Inc., an Oregon corporation ("Bioject"). The paragraph
numbers in this Schedule of Exceptions correspond to the paragraph numbers in
the Agreement which are modified by the disclosures made herein; however, any
information disclosed herein under any paragraph number shall be deemed to be
disclosed and incorporated into any other paragraph number under the Agreement
where such disclosure would be appropriate. Any terms used herein which are
defined in the Agreement shall have the meanings described in the Agreement
unless the context otherwise requires.
7.3 Capitalization.
As of the date of and immediately prior to the execution of the Agreement,
the number of authorized and outstanding shares of each class and series of the
Company's capital stock is as follows:
Authorized Outstanding
---------- -----------
Common Stock 20,000,000 2,990,000
Series A Preferred Stock 750,000 750,000
Series B Preferred Stock 2,000,000 107,500
The Company has adopted a 1999 Stock Plan (the "Plan") and has reserved an
aggregate of 1,000,000 shares of its Common Stock for issuance under the Plan to
employees, directors and consultants. No options or other rights to purchase
shares under the Plan are currently outstanding and all 1,000,000 shares are
available for grant under the Plan.
EXHIBIT 10.68
AGREEMENT II
BETWEEN
BIOJECT, INC.
AND
ANGIOSENSE, INC.
DATED SEPTEMBER 21, 1999
*** Confidential portions have been omitted pursuant to an application for
confidential treatment under Rule 24b-2 under the Securities Exchange Act
of 1934, as amended. Omitted portions have been separately filed with the
Securities and Exchange Commission.
<PAGE>
TABLE OF CONTENTS
<TABLE>
Page
<S> <C> <C>
ARTICLE 1 - DEFINITIONS...............................................................................................1
ARTICLE 2 - JOINT DEVELOPMENT COMMITTEE...............................................................................4
2.1 Establishment of Joint Development Committee........................................................4
2.2 Joint Development Committee Meetings................................................................5
2.3 Enumerated Functions................................................................................5
2.4 Decision Making.....................................................................................6
ARTICLE 3 - AJECT AND ANGIOSENSE PRODUCT DEVELOPMENT..................................................................6
3.1 Project Overview....................................................................................6
3.2 Aject Development...................................................................................6
3.3 AngioSense Product Development......................................................................7
3.4 Development Costs...................................................................................8
3.5 Reports 9
3.6 Records 9
3.7 Capital Equipment...................................................................................9
ARTICLE 4 - EQUIPMENT.................................................................................................9
4.1 Use of Equipment....................................................................................9
4.2 Repair and Maintenance.............................................................................10
4.3 Insurance..........................................................................................10
4.4 Replacement........................................................................................10
4.5 Ownership..........................................................................................10
4.6 Location 11
4.7 Documents..........................................................................................11
4.8 Right of First Refusal.............................................................................11
ARTICLE 5 - CLINICAL DEVELOPMENT.....................................................................................11
5.1 Clinical 11
5.2 Detail 11
5.3 Regulatory Filings.................................................................................11
ARTICLE 6 - EQUITY...................................................................................................12
6.1 Equity.............................................................................................12
ARTICLE 7 - GRANT OF RIGHTS..........................................................................................12
7.1 License Grant......................................................................................12
7.2 Right of First Refusal in the Extended Field.......................................................12
7.3 Prohibition on Reverse Engineering.................................................................12
</TABLE>
i
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<S> <C> <C>
ARTICLE 8 - SUPPLY OF THE AJECT......................................................................................12
8.1 Terms and Conditions...............................................................................12
8.2 Product Supply and Purchase........................................................................13
8.3 Minimum Purchase Requirements......................................................................13
8.4 Forecasts..........................................................................................13
8.5 Orders 13
8.6 Delivery 13
8.7 Invoicing..........................................................................................14
8.8 Shipping 15
8.9 Product Acceptance.................................................................................15
8.10 Return of Product..................................................................................15
ARTICLE 9 - TRANSFER PRICING; ROYALTIES; PAYMENTS; BOOKS AND RECORDS.................................................15
9.1 Transfer Pricing...................................................................................15
9.2 Inventory..........................................................................................16
9.3 Royalty 16
9.4 Sublicense Fees....................................................................................16
9.5 Third Party Royalties..............................................................................17
9.6 Records; Inspection................................................................................17
ARTICLE 10 - COMMERCIALIZATION.......................................................................................17
10.1 Technical Literature...............................................................................17
10.2 Product Packaging and Labeling.....................................................................17
ARTICLE 11 - PRODUCT WARRANTY........................................................................................18
11.1 Product Warranty...................................................................................18
ARTICLE 12 - INTELLECTUAL PROPERTY...................................................................................18
12.1 Bioject Field and AngioSense Field.................................................................18
12.2 Joint Inventions...................................................................................18
12.3 Joint Rights.......................................................................................19
12.4 Sole Inventivons...................................................................................19
12.5 Patent Prosecution.................................................................................20
12.6 Improvements.......................................................................................20
12.7 Defense of Third Party Infringement Claims.........................................................20
12.8 Enforcement........................................................................................20
ARTICLE 13 - REPRESENTATIONS AND WARRANTIES..........................................................................21
13.1 Bioject Warranties.................................................................................21
13.2 AngioSense Warranties..............................................................................21
</TABLE>
ii
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<S> <C> <C>
ARTICLE 14 - CONFIDENTIALITY.........................................................................................22
14.1 Confidential Information...........................................................................22
14.2 Permitted Disclosures..............................................................................22
ARTICLE 15 - INDEMNIFICATION.........................................................................................22
15.1 Indemnification of Bioject.........................................................................22
15.2 Indemnification of AngioSense......................................................................23
15.3 Procedure..........................................................................................23
ARTICLE 16 - TERM AND TERMINATION....................................................................................23
16.1 Term ..........................................................................................23
16.2 Termination for Cause..............................................................................23
16.3 Bankruptcy Proceedings.............................................................................23
16.4 Effect of Expiration and Termination...............................................................24
16.5 Survival 25
ARTICLE 17 - LIMITATION OF LIABILITY.................................................................................25
ARTICLE 18 - MISCELLANEOUS...........................................................................................25
18.1 Governing Law......................................................................................25
18.2 Disputes 25
18.3 Force Majeure......................................................................................26
18.4 No Implied Waivers; Rights Cumulative..............................................................26
18.5 Independent Contractors............................................................................26
18.6 Notices 26
18.7 Assignment.........................................................................................27
18.8 Visiting Personnel.................................................................................27
18.9 Modification.......................................................................................27
18.10 Severability.......................................................................................27
18.11 Publicity..........................................................................................27
18.12 Headings 27
18.13 No Implied Licenses................................................................................27
18.14 Entire Agreement...................................................................................28
18.15 Counterparts.......................................................................................28
</TABLE>
iii
<PAGE>
AGREEMENT II
BETWEEN
BIOJECT, INC.
AND
ANGIOSENSE, INC.
DATED SEPTEMBER 21, 1999
<PAGE>
AGREEMENT II
This Development and Supply Agreement ( "Agreement II") is made and entered
into this day of August 1999 (the "Effective Date"), by and between AngioSense,
Inc., a Delaware corporation ("AngioSense") and Bioject, Inc., an Oregon
corporation ("Bioject").
BACKGROUND
A. Bioject has developed several technologies and products related to
needle-free, jet injection drug delivery systems and is developing the "Iject",
a disposable needle-free jet injection drug delivery system; and
B. AngioSense has developed certain intellectual property relating to the
surgical and percutaneous delivery of drugs; and
C. Bioject and AngioSense desire that AngioSense fund the further
development and customization of the "Iject" for use in surgical and
percutaneous procedures and perform clinical development activities in the
"Field" (as defined below) with respect to the "AngioSense Product"; and
D. AngioSense desires to obtain an exclusive license from Bioject under the
Licensed Patents and relating to the Licensed Technology, together with
associated know-how relevant to such license, to use and sell the "Aject" in
accordance with the terms and conditions contained herein and, under certain
conditions as specified herein and
E. Bioject is willing to grant such an exclusive license to AngioSense in
accordance with the terms and conditions contained herein;
NOW THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliate" shall mean any entity which controls, is controlled by or
is under common control with AngioSense or Bioject. An entity shall be regarded
as in control of another entity for purposes of this Section 1.1 if it owns or
controls more than fifty percent (50%) of the shares of the subject entity
entitled to vote in the election of directors (or, in the case of an entity that
is not a corporation, for the election of the corresponding managing authority).
1.2 "Aject" shall mean a customized version of the current Iject device.
The Aject will be a single use, disposable, pre-fillable jet injection power
source. The Aject will be customized to
<PAGE>
the "Aject Specifications" by Bioject and incorporated into the AngioSense
Product (as defined below)
1.3 "Aject Development" shall mean the customization of the Iject into the
Aject.
1.4 "Aject Development Budget" shall mean the estimate of costs to complete
the "Aject Development Plan".
1.5 "Aject Development Costs" shall mean the budgeted expenditures
according to the approved Aject Development Budget and subject to the terms and
conditions stated in Section 3.4 of this Agreement II.
1.6 "Aject Development Plan" shall mean a reasonably detailed plan,
specifying both development objectives and work plan activities to be performed
by each of the parties for the customization and development of the Iject into
the Aject, in accordance with the Aject Specifications
1.7 "Aject Specifications" shall mean the design, performance,
manufacturing, quality, sterilization, labeling, packaging and supply
requirements for the Aject.
1.8 "AngioSense Product" shall mean the Aject in combination with an
AngioSense catheter.
1.9 "AngioSense Product Development Plan" shall mean reasonably detailed
plans, specifying both development objectives and work plan activities to be
performed by each of the parties, both initially and on an annual basis
thereafter, through which the AngioSense Product will be developed and
commercialized.
1.10 "Change of Control" shall means, with respect to any entity, (1) any
transaction or series of related transactions, other than a registered public
offering unrelated to any acquisition, as a result of which the persons owning
the outstanding voting securities of Bioject, Inc, immediately prior to such
transaction or series of related transactions, cease to own a majority of the
outstanding voting securities of the entity thereafter; (2) the consolidation or
merger of the entity with or into another person or entity, whether or not the
entity is the surviving entity of such transaction, unless immediately after
such consolidation or merger, the persons owning the outstanding voting
securities the entity prior to the transaction own a majority of the outstanding
voting securities of such new or surviving entity; or (3) the sale, assignment
or other transfer of all or substantially all of the business or assets of the
entity to a third party in a single transaction or series of related
transactions.
1.11 "Clinical Development" shall mean those preclinical studies (excluding
those preclinical studies to be completed by Bioject pursuant to the Aject
Development Plan), clinical trials and all other activities reasonably required
to obtain and maintain all governmental approvals required to market the Aject
and the AngioSense Product for use within the Field.
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<PAGE>
1.12 "Combination Product" shall mean any product that is developed and
sold by AngioSense and is comprised in part of one or more Ajects and/or one or
more AngioSense Products and of one or more other products or service or parts
which could be sold separately.
1.13 "Confidential Information" shall have the meaning as set forth in
Section 14.1 below.
1.14 "Control" shall mean with respect to a particular intellectual
property right or other subject matter, possession of the ability to grant a
license or sublicense under such rights as provided for herein without violating
the terms of any agreement or other arrangements with any third party.
1.15 "Extended Field" shall mean the use of the cardiovascular system as a
delivery pathway for the treatment or diagnosis of a non-cardiovascular system
or environment, excluding injection through or within the skin.
1.16 "Facility" shall mean Bioject's facility located at 7620 S.W.
Bridgeport Road, Portland, Oregon.
1.17 "FDA" shall mean the United States Food and Drug Administration.
1.18 "Field" shall mean all cardiovascular procedures to treat or diagnose
cardiac or cardiovascular diseases, including, without limitation percutaneous
and surgical procedures.
1.19 "Iject" shall mean a disposable jet injector as specified by the Iject
Specifications. The parties contemplate that the Iject shall be the surgical
handpiece and power source for the AngioSense Product.
1.20 "Iject Specifications" shall mean the engineering requirements,
drawings and performance criteria requisite for determining the Aject
Specifications.
1.21 "Improvements" shall mean those rights and other subject matter, made,
conceived or reduced to practice by either party, alone or jointly with the
other party or a third party subcontractor comprised of improvements to the
Licensed Technology which are reasonably related to the Aject and/or the
AngioSense Product.
1.22 "Joint Development Committee" shall have the meaning set forth in the
provisions of Article 2 below.
1.23 "Licensed Patents" means (a) the patents and patent applications
listed on Exhibit A attached hereto, (b) any and all related foreign patents and
patent applications, whether now existing or hereafter filed, (c) any
provisionals, substitutions, divisionals, reissues, renewals, continuations,
continuations-in-part, substitute applications and inventors' certificates
arising from, or based upon, any of the foregoing patents or patent
applications, and (d) any patents issuing from any of the foregoing patent
applications.
-3-
<PAGE>
1.24 "Licensed Technology" shall mean the Licensed Patents and Technical
Information.
1.25 "Marketing Approval Application" shall mean any application with a
governmental regulatory agency for authority to market the Aject and AngioSense
Product, including without limitation, a premarketing approval application,
import approval application, import license application, or other similar
application or filing.
1.26 "Net Sales" shall mean the total amount charged to third parties by
AngioSense, its Affiliates or Sublicensees, upon the sales of the Aject and/or
the AngioSense Product, less the following reasonable and customary deductions
to the extent applicable to such allowed to the buyer against such charged
amounts: (i) trade, quantity and cash discounts; (ii) rebates and chargebacks to
the buyer; (iii) reasonable amounts for actual uncollectible accounts determined
in accordance with generally acceptable accounting practices (GAAP) consistently
applied to all products of the selling party; (iv) sales and value-added taxes
imposed upon the in-country sale of the Aject and/or the AngioSense Product; (v)
transportation charges, including shipping insurance; and (vi) uncollectible
amounts. For the removal of doubt, Net Sales shall not include sales by
AngioSense to its Affiliates or Sublicensees for resale, provided that if
AngioSense sells the Aject and/or the AngioSense Product to an Affiliate or
Sublicensee for resale, Net Sales shall include the amounts charged by such
Affiliate or Sublicensee to third parties on the resale of the Aject and/or the
AngioSense Product. With respect to Combination Products, Net Sales shall be
determined by multiplying the amounts received by AngioSense attributable to
Combination Products by a fraction, the numerator of which is the fair market
value of the Aject and/or AngioSense Product, as applicable, included in the
Combination Product, and the denominator of which is the sum of the fair market
value of such Aject or AngioSenses product, as applicable, and the fair market
value of the products or parts which are not the Aject and/or the AngioSense
Product. Whenever possible, the fair market value of the Aject or the AngioSense
Product included in the Combination Product will be the market price at which
such Aject and/or AngioSense Product, as applicable, is sold on a stand alone
basis; provided that fair market value shall be determined reasonably and in
good faith by AngioSense and Bioject in the event that no market price is
available.
1.27 "Sublicensee" shall mean a third party who has obtained through
AngioSense, a sublicense to the rights granted to AngioSense hereunder.
1.28 "Technical Information" means all know-how, data, trade secrets,
processes, procedures, devices, methods, formulas, materials, compositions of
matter, protocols, information or other subject matter within the knowledge and
possession of Bioject, which is useful to or contributes in whole or in part to
the practice of the Aject and/or the AngioSense Product and/or the Licensed
Patents in the Field.
1.29 "Valid Claim" shall mean a claim of an issued and unexpired patent
which claim has not lapsed, been cancelled, or become abandoned and which claim
has not been declared invalid by a court of competent jurisdiction, and which
has not been admitted to be invalid or unenforceable through issue or
disclaimer.
-4-
<PAGE>
ARTICLE 2
JOINT DEVELOPMENT COMMITTEE.
2.1 Establishment of Joint Development Committee. AngioSense and Bioject
shall establish a Joint Development Committee ("Joint Development Committee")
comprised of three (3) representatives, to be determined later, from each of
AngioSense and Bioject. Bioject and AngioSense each may replace its Joint
Development Committee representatives at any time, with prior written notice to
the other party.
2.2 Joint Development Committee Meetings. The Joint Development Committee
shall meet in person at least monthly during the term of the Agreement II, at
such locations as the parties agree, and meet more frequently by other means as
dictated by the issues surrounding the implementation of the Agreement II. At
its meetings, the Joint Development Committee will monitor, review and discuss
the AngioSense Product Development Plan and the Aject Development Plan,
coordinate the exchange of information between the parties regarding the
commercialization, marketing and sale of the Aject and the AngioSense Products
in the Field and to undertake and/or approve such other matters as are provided
for the Joint Development Committee under this Agreement II. With the consent of
Bioject and AngioSense, other representatives of Bioject or AngioSense may
attend Joint Development Committee meetings as non-voting observers. Joint
Development Committee meetings shall be chaired on alternating
(meeting-by-meeting basis) by the lead representative from Bioject or
AngioSense, as appropriate, with AngioSense's lead representative chairing the
first meeting. The chairperson shall be responsible for preparing the meeting
agendas and minutes. Such minutes shall be deemed accepted and effective unless
an authorized representative of a party has objected to the same within fifteen
(15) days of such party's first receipt of such minutes. Each party shall bear
its own personnel and travel costs and expenses relating to Joint Development
Committee meetings.
2.3 Enumerated Functions. Without limiting Section 2.2 above, the function
of the Joint Development Committee shall include:
2.3.1 Reviewing and modifying, as needed, the Aject Development Plan
and the AngioSense Product Development Plan, provided that i) any modification
to Bioject's responsibilities thereunder shall be reasonably acceptable to
Bioject; ii) Bioject's portion of the development budget related to such
modification shall be modified to reflect any cost increase created by such
modification; and iii) any modification to AngioSense's responsibilities
thereunder shall be reasonably acceptable to AngioSense;
2.3.2 Reviewing Bioject's and AngioSense's performance, respectively,
in the course of the Aject Development and the AngioSense Product Development in
accordance with the Aject Development Plan and the AngioSense Product
Development Plan, respectively;
2.3.3 Reviewing all Clinical Development (including design and
implementation of any clinical trials) and regulatory efforts within the Field;
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2.3.4 Reviewing Aject Development Milestones, as described in Exhibit C,
and assessing Bioject's achievement of such Aject Development Milestones;
2.3.5 Considering and mediating any points of disagreement or dispute
between the parties; and
2.3.6 With respect to improvements to the Licensed Technology, determining
whether such improvements are reasonably related to the Aject and/or the
AngioSense Product so as to fall within the definition of Improvements as
defined in Section 1.21 of this Agreement II.
2.4 Decision Making. Decisions of the Joint Development Committee shall be
made by majority approval (i.e., by a majority of the total number of authorized
representatives on the Joint Development Committee, whether or not present at a
particular meeting In the case of disagreements and disputes between the parties
where the JDC is unable to resolve, the provisions of section 18.2 shall apply.
ARTICLE 3
AJECT AND ANGIOSENSE PRODUCT DEVELOPMENT
3.1 Project Overview. The table below is an overview of the various
projects referenced by this Agreement II, the tasks associated with each such
project, the task completion dates, and the party responsible for each task.
<TABLE>
PROJECT TASK RESPONSIBILITY TIMING
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
Iject Iject Spec. delivered to Bioject ***
AngioSense
Aject Aject Spec. AngioSense ***
Aject Aject Dev. Plan JDC ***
Aject Aject Budget JDC ***
Aject Aject Development AngioSense & Bioject ***
(monitored by the JDC)
AngioSense Product AngioSense Product AngioSense ***
Development Plan
AngioSense Product AngioSense Product Budget JDC ***
AngioSense Product AngioSense Product AngioSense & Bioject ***
Development (monitored by the JDC) ***
</TABLE>
3.2 Aject Development. The Aject Development comprises the creation and
implementation of the product specifications, development plan, clinical plan,
and associated
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development budget necessary for customizing the Iject, as defined above in
Section 1.19, into the Aject, as defined above in Section 1.2, to be
incorporated into the AngioSense Product, as defined above in Section 1.8.
3.2.1 Aject Specifications. The parties agree that, in order for AngioSense
to reasonably define the Aject Specification, AngioSense will need to understand
and have reference to the Iject Specification. Accordingly, within *** (***)
*** of the Effective Date ("T1"), Bioject shall deliver to AngioSense a copy of
the Iject Specification, in its then current form, and any drawings and other
materials that Bioject deems relevant or necessary to the definition of the
Aject Specification. Within *** (***) *** of T1 ("T2"), AngioSense shall have
completed and delivered to the Joint Development Committee, the Aject
Specifications in a commercially reasonable form.
3.2.2 Aject Development Plan. The Joint Development Committee shall be
responsible for defining and preparing an Aject Development Plan based on the
Aject Specification. Within *** (***) ***of T2 ("T3"), the Joint Development
Committee shall prepare and complete the Aject Development Plan. The Aject
Development Plan shall define the development activities, responsibilities of
the parties, and the timeline according to which the development of the Aject is
to be carried out. Such Aject Development Plan shall be fixed until the *** ***
of T3, unless otherwise determined by the Joint Development Committee. For each
subsequent year thereafter, the Joint Development Committee shall revise the
Aject Development Plan. Each such annual revision shall be made at least ***
(***) *** prior to ***. Bioject's development activities, responsibilities and
related timelines under the Aject Development Plan shall be reasonably
acceptable to Bioject. AngioSense's development activities, responsibilities and
related timelines under the Aject Development Plan shall be reasonably
acceptable to AngioSense.
3.2.3 Aject Development Budget. Within *** (***) *** of T3 ("T4"), the
Joint Development Committee shall prepare and complete an Aject Development
Budget associated with the Aject Development Plan. The Aject Development Budget
shall be in standard accounting format, itemizing the Aject Development Costs.
Such Aject Development Budget shall be fixed for as long as the Aject
Development Plan remains fixed, and shall be revised according to the revisions
made to the Aject Development Plan, unless otherwise determined by the Joint
Development Committee. The portion of the Aject Development Budget related to
Bioject's activities under the Aject Development Plan shall be reasonably
acceptable to Bioject. The portion of the Aject Development Budget related to
AngioSense's activities under the Aject Development Plan shall be reasonably
acceptable to AngioSense.
3.2.4 Aject Development. Bioject and AngioSense, respectively, shall be
responsible for implementing, directly or through third parties, such portions
of the Aject Development Plan for which each is responsible, and do such in
accordance with the time schedules defined therein and in accordance with the
Aject Development Budget. The Aject Development shall be overseen by the Joint
Development Committee, and each party shall keep the Joint Development Committee
reasonably informed as to its progress under the Aject Development Plan. Without
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limiting the foregoing, the parties agree to initiate implementation of the
Aject Development Plan promptly after approval of such by the Joint Development
Committee.
3.3 AngioSense Product Development. The AngioSense Product Development
comprises the creation and implementation of the product specifications,
development plan, clinical plan and associated development budget necessary for
the commercialization of the AngioSense Product, as defined above in Section
1.8. The parties agree that, at least in part, such AngioSense Product
Development is necessarily dependent upon the successful progression of the
Aject Product Development as defined in Section 3.1 of this Agreement II.
3.3.1 AngioSense Product Development Plan. Accordingly, within *** (***)
*** of T3, i.e., T4 (T3 being defined above as the date upon which the Aject
Development Plan is to be completed), AngioSense shall deliver a completed
AngioSense Product Development Plan to the Joint Development Committee. The
AngioSense Product Development Plan shall define the development activities,
responsibilities of the parties, and the timeline according to which the
development of the AngioSense Product is to be carried out. Upon approval of the
AngioSense Product Development Plan, such AngioSense Product Development Plan
shall be fixed until *** of T4, unless otherwise determined by the Joint
Development Committee. For each subsequent year thereafter, AngioSense shall
revise the AngioSense Product Development Plan for submission to and approval by
the Joint Development Committee. Each such annual revision shall be made at
least *** (***) *** prior to ***. Bioject's development activities,
responsibilities and related timelines under the AngioSense Product Development
Plan shall be reasonably acceptable to Bioject. AngioSense's development
activities, responsibilities and related timelines under the AngioSense Product
Development Plan shall be reasonably acceptable to AngioSense.
3.3.2 AngioSense Product Development Budget. Within *** (***) *** of T4
("T5"), the Joint Development Committee shall prepare and complete an AngioSense
Product Development Budget associated with the AngioSense Product Development
Plan. The AngioSense Product Development Budget shall be in standard accounting
format, itemizing the AngioSense Product Development Costs. Such AngioSense
Product Development Budget shall be fixed for as long as the AngioSense Product
Development Plan remains fixed, and shall be revised according to the revisions
made to the AngioSense Product Development Plan, unless otherwise determined by
the Joint Development Committee. The portion of the AngioSense Product
Development Budget related to Bioject's activities under the AngioSense Product
Development Plan shall be reasonably acceptable to Bioject. The portion of the
AngioSense Product Development Budget related to AngioSense's activities under
the AngioSense Product Development Plan shall be reasonably acceptable to
AngioSense.
3.3.3 AngioSense Product Development. Bioject and AngioSense, respectively,
shall be responsible for implementing, directly or through third parties, such
portions of the AngioSense Product Development Plan for which each is
responsible, and do such in accordance with the time schedules defined therein
and in accordance with the AngioSense Product
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Development Budget. The AngioSense Product Development shall be overseen by the
Joint Development Committee, and each party shall keep the Joint Development
Committee reasonably informed as to its progress under the AngioSense Product
Development Plan. Without limiting the foregoing, the parties agree to initiate
implementation of the AngioSense Product Development Plan promptly after
approval of such by the Joint Development Committee.
3.4 Development Costs. AngioSense shall pay to Bioject Aject Development
Costs and AngioSense Product Development Costs (collectively "Costs") incurred
by Bioject pursuant to the Aject Development Budget and the AngioSense Product
Development Budget or any revisions thereto (collectively, "Budgets"),
respectively; provided however, AngioSense shall not be obligated to pay Bioject
for any Costs over any Budget, unless such Costs are approved in writing by the
Joint Development Committee in advance of incurment of such Costs. Such Costs
shall be payable and due *** (***) *** in advance in an amount equal to the ***
for each such *** (***) *** period according to the respective Budget to which
such payment is related. The initial payment in each case shall be due upon ***.
3.5 Reports. Within a reasonable period after each relevant calendar month
during the term of this Agreement II, each party shall submit to the Joint
Development Committee by e-mail, or such other manner as the parties may
mutually agree upon, a written summary of each party's progress and the specific
activities performed by it under the Aject Development Plan and/or the
AngioSense Product Development Plan during the previous calendar month.
3.6 Records. Bioject shall complete true and accurate books of accounts and
records of the Aject Development Costs and AngioSense Product Development Costs
incurred for the Aject Development and AngioSense Product Development hereunder.
Such books and records shall be kept by Bioject for at least three (3) years
following each year to which they pertain. Such records will be open for
inspection during such three (3)-year period, but no later than one (1) year
after completion of the Aject Development and AngioSense Product Development,
respectively, hereunder, by an independent auditor chosen by AngioSense and
reasonably acceptable to Bioject for the purpose of verifying the reports
provided by Bioject pursuant to Section 3.4 above. Such inspections may be made
no more than twice each year, at reasonable times and on reasonable notice. The
independent auditor shall be obligated to execute a reasonable confidentiality
agreement prior to commencing any such inspection. Inspections conducted under
this Section 3.5 shall be at the expense of AngioSense, unless a variation or
error producing an overstatement exceeding five percent (5%) of the Aject
Development Costs and/or AngioSense Product Development Costs, respectively,
reported in any period covered by the inspection is established in the course of
any such inspection, whereupon all costs relating to the inspection for such
period shall be paid by Bioject. The parties will endeavor to minimize
disruption of Bioject's normal business activities to the extent reasonably
practicable.
3.7 Capital Equipment. The Aject Development Costs and AngioSense Product
Development Costs may include reasonable depreciation charges or lease expenses
allocable to the Aject Development or the AngioSense Product Development for
certain capital equipment used by
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Bioject in connection with the Aject Development or the AngioSense Product
Development. It is understood that Bioject will be the owner of all capital
equipment purchased by Bioject in connection with the Aject Development and the
AngioSense Product Development , whether or not separately identified in the
Aject Development Plan or the AngioSense Product Development Plan.
ARTICLE 4
EQUIPMENT
4.1 Use of Equipment. AngioSense shall acquire, at its own expense, and
install or have installed at the Bioject's Facility, the equipment to be listed
in Exhibit B, attached hereto, created and amended as needed throughout the term
of this Agreement ("Equipment"). Additions or changes to Exhibit B shall be
approved in writing by both parties. Bioject may utilize the Equipment for any
use other than for the manufacture of the Aject and/or AngioSense Product for
AngioSense with the prior written consent of AngioSense, which consent shall not
be unreasonably withheld, on commercially reasonable and customary terms which
AngioSense agrees to negotiate in good faith. Equipment shall also include but
shall not be limited to (1) all future purchased manufacturing equipment (e.g.,
tools, molds, etc.) and (2) Aject and AngioSense Product components supplied by
AngioSense to Bioject. The Equipment shall, at all times, remain the sole and
exclusive property of AngioSense.
4.2 Repair and Maintenance. Bioject, at its expense, shall make all
necessary site preparations and cause the Equipment to be operated in accordance
with any applicable operating manuals and manufacturer's instructions. Bioject
shall effect and bear the expense of all necessary repair, maintenance,
operation and replacements required to be made to maintain the Equipment in good
condition, reasonable wear and tear excepted, and to comply with all applicable
laws to which the use and operation of the Equipment may be or become subject.
All replacement Equipment and parts furnished in connection with such
maintenance or repair shall immediately become the property of AngioSense and
part of the Equipment for all purposes hereof. All such maintenance, repair and
replacement services shall be immediately paid for and discharged by Bioject
with the result that no lien under any applicable laws will attach to the
Equipment as a result of the performance of such services or the provision of
any such material.
4.3 Insurance. Bioject shall obtain and maintain for the term of this
Agreement, at its own expense, (a) "all risk" insurance against loss or damage
to the Equipment, (b) commercial general liability insurance (including
contractual liability, products liability and completed operations coverage)
reasonably satisfactory to AngioSense, and (c) such other insurance against such
other risks of loss and with such terms, as shall in each case be reasonably
satisfactory to or reasonably required by AngioSense (as to carriers, amounts
and otherwise). The amount of the "all risk" insurance shall be equal to the
replacement value of all Equipment and must otherwise be reasonably satisfactory
to AngioSense as of each anniversary date of this Agreement.
4.4 Replacement. If any items of Equipment shall become lost, stolen,
destroyed, or damaged beyond repair for any reason, or in the event of
condemnation, confiscation, seizure or requisition of title to or use of such
items (collectively, an "Event of Loss"), Bioject shall promptly
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pay to AngioSense the fair market value of the Equipment subject to the Event of
Loss as determined by an objective third party evaluator agreeable to both
parties. Upon payment of such amount by Bioject, AngioSense will transfer to
Bioject, "AS IS, WHERE IS, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY," all of
AngioSense's right, title and interest, if any, in such items of Equipment.
4.5 Ownership. AngioSense and Bioject confirm their intent that title to
the Equipment shall remain in AngioSense (or its successors and assigns)
exclusively. If requested by AngioSense, Bioject will affix plates or markings
on the Equipment and on any operating manuals and manufacturer's instructions
indicating the interests of AngioSense and its assigns therein, and Bioject will
not allow any other indicia of ownership or other interest in the Equipment to
be placed on the Equipment. Bioject shall not sell, assign, grant a security
interest in, sublet, pledge, hypothecate or otherwise encumber or suffer a lien
upon or against the Equipment.
4.6 Location. Bioject may move such Equipment from the Bioject's Facility
only if Bioject gives at least thirty (30) days prior written notice of the
relocation or provides such other documentation as AngioSense reasonably
requests to protect its interest in the Equipment.
4.7 Documents. Bioject shall keep copies of all operating manuals and
manufacturer's instructions with respect to the Equipment in good condition at
the Facility.
4.8 Right of First Refusal. In the event AngioSense should decide to sell
or otherwise dispose of any or all of the Equipment, Bioject shall have the
right of first refusal to purchase such Equipment at AngioSense's good faith
determination of the Equipment's fair market value. If Bioject elects not to
purchase the Equipment under this Section 4.8, Bioject shall, at AngioSense's
expense, return the Equipment to AngioSense in the same condition as delivered,
normal wear and tear expected, at such location as AngioSense shall designate.
ARTICLE 5
CLINICAL DEVELOPMENT
5.1 Clinical Development. During the term of this Agreement II and in
accordance with the decisions of the Joint Development Committee, AngioSense
shall be responsible, at its expense, for conducting, directly or through third
parties, all Clinical Development for the Aject and the AngioSense Products for
applications within the Field or, where licensed, the Extended Field, and in
accordance with the protocol and the timetable approved by the Joint Development
Committee. AngioSense agrees to keep the Joint Development Committee reasonably
informed as to the progress of Clinical Development of the Aject and the
AngioSense Products hereunder. It is understood and agreed that, except as
otherwise expressly agreed in writing, Bioject shall have no obligation to
perform pre-clinical studies or clinical trials or other portions of the
Clinical Development; provided, however, Bioject shall provide reasonable
assistance to AngioSense regarding Clinical Development of the Aject and of the
AngioSense Product and shall supply AngioSense with quantities of the Aject and
of the AngioSense Product, as dictated by the Aject Development Plan and the
AngioSense Development Plan, respectively, to be determined by the
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Joint Development Committee pursuant to Article 3, as reasonably required to
carry out clinical trials in accordance with the laws and regulations and Good
Manufacturing Practice (GMP) standards as established by the FDA and in
accordance with Article 10 below.
5.2 Data. AngioSense shall provide the Joint Development Committee with
detailed preclinical and/or clinical data acquired or produced by AngioSense
pursuant to Section 5.1 above.
5.3 Regulatory Filings. AngioSense shall prepare and file all regulatory
documents for the Aject and the AngioSense Product, including Marketing Approval
Applications for the Field, and shall use its best efforts to secure approval of
such applications and thereafter maintain such approvals. All such activities
shall be done in full consultation with the Joint Development Committee,
including without limitation, all product registration plans and applications
for marketing approvals (including Marketing Approval Applications filed with
the FDA and other regulatory agencies, and similar applications, including
applications for pricing approval and governmental reimbursement authorization)
for the Aject and the AngioSense Product shall be submitted to the Joint
Development Committee for review and approval by the Joint Development Committee
prior to filing of such registrations with any health regulatory agency. Bioject
shall provide reasonable assistance to AngioSense regarding the filing for and
maintenance of such regulatory documents for the Aject and the AngioSense
Product within the Field, including providing AngioSense with a right of
reference to any applicable materials filed by Bioject to any relevant agency.
All regulatory documents including Marketing Approval Applications for the Aject
and the AngioSense Product shall be filed in AngioSense's name, except as
otherwise required by local law.
ARTICLE 6
EQUITY
6.1 Equity. In consideration of the rights granted to AngioSense hereunder,
AngioSense shall issue to Bioject 277,222 shares of AngioSense Common Stock in
accordance with the Milestone and Stock Payment Schedule set forth on Exhibit C
and upon execution of the Stock Purchase Agreement attached as Exhibit D.
ARTICLE 7
GRANT OF RIGHTS
7.1 License Grant. Bioject hereby grants to AngioSense a worldwide,
exclusive, royalty-bearing license, with the right to grant sublicenses, under
the Licensed Technology and under Bioject's interest in Improvements to make and
have made, to the extent set forth in Section 8.5.2, use, import, distribute and
sell the Aject and AngioSense Product in the Field.
7.2 Right of First Refusal in the Extended Field. Bioject hereby grants to
AngioSense a right of first refusal to obtain an exclusive license, with the
right to grant sublicenses, under the Licensed Technology and Bioject's interest
in Improvements to develop, make or have made, subject to Section 8.5.2, use,
distribute, sell and import the Aject and the AngioSense Product in the
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Extended Field. Upon receipt of Bioject's notice of intent to negotiate a
license for the Licensed Technology and Improvements in the Extended Field, the
parties shall negotiate in good faith the terms of such license within sixty
(60) days. In the event the parties are unable to agree on such terms, Bioject
shall be free to enter into an agreement with a third party on the same terms as
offered to AngioSense. 7.3 Prohibition on Reverse Engineering. AngioSense shall
not reverse engineer the Iject, the Aject or any Improvements.
ARTICLE 8
SUPPLY OF THE AJECT
8.1 Terms and Conditions. All supply of the Aject and of the AngioSense
Product by Bioject and all purchases of the Aject (alone or as part of the
AngioSense Product) by AngioSense hereunder shall be subject to the terms and
conditions of this Article 8.
8.2 Product Supply and Purchase. Subject to the terms and conditions of
this Article 8, except as set forth in Section 8.5.2, Bioject shall supply
AngioSense with AngioSense's commercial requirements for the Aject (alone or as
part of the AngioSense Product) in accordance with applicable Good Manufacturing
Practices (GMP) as established by the FDA. Except as set forth in Section 8.5.2,
AngioSense shall purchase all of its commercial requirements for the Aject
(alone or as part of the AngioSense Product) from Bioject.
8.3 Minimum
Purchase Requirements. AngioSense will notify Bioject promptly upon receipt of
FDA approval to market the Aject and/or the AngioSense Product for any drug or
non-drug for any indication in the Field. At such time, Bioject and AngioSense
will negotiate in good faith, reasonable quarterly minimum purchase requirements
by AngioSense. In the event the parties are unable to agree, the provisions of
Section 18.2 shall apply.
8.4 Forecasts. During the term of this Agreement II, at least thirty (30)
days prior to the start of any calendar month , AngioSense shall provide Bioject
with a rolling written forecast of the quantities the Aject (alone or as part of
the AngioSense Product) (on a Product-by-Product basis) estimated to be required
on a month-by-month basis for twelve (12) consecutive months ("M1" to "M12",
respectively) (the "Forecast"). Each Forecast shall identify an anticipated
launch date for the Aject (alone or as part of the AngioSense Product). Except
as set forth in Section 8.5 below, AngioSense will provide such Forecasts as a
means of production planning only and shall not constitute a binding obligation
upon Bioject or AngioSense.
8.5 Orders.
8.5.1 Orders. Together with each forecast provided under Section 8.4
above, AngioSense shall place its firm order with Bioject for delivery of the
Aject (alone or as part of the AngioSense Product) for the next three (3) month
period ("Firm Order").
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8.5.2 Form of Order. AngioSense's orders shall be made pursuant to a
written purchase order which is in a form mutually acceptable to the parties,
and shall provide for shipment in accordance with reasonable delivery schedules
as may be agreed upon from time to time by Bioject and AngioSense.
8.6 Delivery. Bioject shall ship forecasted quantities the Aject (alone or
as part of the AngioSense Product) in accordance with orders submitted and
accepted in accordance with Section 8.5 above.
8.6.1 Allocation. In the event that Bioject is unable to meet
AngioSense's requirements for the Aject (alone or as part of the AngioSense
Product) under either Section 8.2 or Section 8.5 above due to force majeure or
otherwise, Bioject shall allocate such quantities of parts and services
necessary for supplying the Aject that Bioject has in its then current inventory
and control for the production of Ajects (alone or as part of the AngioSense
Product) so that AngioSense receives at least its proportional share (vis-a-vis
other distributors of Bioject's similar products) of available supplies as
determined based on reasonable Forecasts (taking into consideration past usage
and usage performance against forecast).
8.6.2 Right to Manufacture. If for three (3) consecutive months
Bioject fails to adequately supply AngioSense's requirements of the Aject (alone
or as part of the AngioSense Product), and provided that such failure will or
does result in a substantial interruption of supply of the Aject (alone or as
part of the AngioSense Product) to the commercial market and is not due to
action or inaction of AngioSense, then AngioSense may manufacture (or have
manufactured) pursuant to this Section 8.5.2 the quantities of the Aject that
Bioject fails to so supply. A failure to "adequately supply AngioSense's
requirements" shall mean a failure to supply AngioSense ninety percent (90%) of
the quantities of the Aject (alone or as part of the AngioSense Product) ordered
in accordance with this Agreement II, in any three (3) consecutive months. The
provisions of this paragraph 8.6.2 shall not be applicable for any month which
becomes the subject of a Firm Order and for which month said Firm Order is more
than fifteen percent (15%) greater than the Forecast last provided for such
month. Notwithstanding the foregoing, the provisions of this Section 8.6.2 shall
not become effective until the first month beginning twelve (12) months after
the first Firm Order.
8.6.2.1 License to Manufacture. Subject to all other terms and
conditions of this Agreement II, where the provisions of Section 8.6.2 are
applicable, Bioject hereby grants to AngioSense, and AngioSense hereby accepts a
license (the "Bioject License") under the Licensed Technology and Bioject's
interest in Improvements, with the right of sublicense to make and have made the
Aject (alone or as part of the AngioSense Product) (which Bioject has failed to
adequately supply as set forth above).
8.6.2.2 Exercise of the Bioject License. AngioSense agrees not to
exercise any of its rights under the Bioject License granted pursuant to Section
8.6.2.1, except to the extent expressly permitted in Section 8.6.2 above. In
such event, Bioject shall provide to AngioSense copies of all documentation
within Bioject's control that is reasonably necessary for
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AngioSense to manufacture (or have manufactured) the Aject (alone or as part of
the AngioSense Product), and shall reasonably cooperate with AngioSense to
establish alternative supply, including sources of materials. AngioSense may
exercise its right to have the Aject (alone or as part of the AngioSense
Product) manufactured in accordance with Section 8.5.2 through a third party
contract manufacturer.
8.6.2.3 Return of Equipment. Immediately upon AngioSense's
exercise of the Bioject License pursuant to Section 8.6.2.2, Bioject shall
immediately allow AngioSense, at AngioSense's expense, to pack and ship all
Equipment to a designation specified by AngioSense. In such event, the transfer
price of the Aject (alone or as part of the AngioSense Product) shall be zero.
8.7 Invoicing. Bioject shall submit an invoice to AngioSense upon each
shipment of the Aject (alone or as part of the AngioSense Product) ordered by
AngioSense. All invoices shall be sent to AngioSense's address for notices
hereunder, and each such invoice shall state AngioSense's aggregate and Transfer
Price (as defined in Section 9.1 below) for a given shipment, plus any
insurance, taxes or other costs incident to the purchase or shipment initially
paid by Bioject but to be borne by AngioSense hereunder.
8.8 Shipping. All Ajects or AngioSense Products delivered pursuant to the
terms of this Agreement II shall be suitably packed for shipment by Bioject and
marked for shipment to the destination point indicated in AngioSense's purchase
order. All such shipments will be delivered FCA (Incoterms 1990) the United
States shipping point designated by Bioject. The carrier shall be selected by
AngioSense. All shipping and insurance costs, as well as any special packaging
expenses, shall be paid by AngioSense.
8.9 Product Acceptance. All shipments and all shipping and other charges
shall be deemed correct unless Bioject receives from AngioSense, no later than
thirty (30) days after the shipment date, written notice specifying the
shipment, the purchase order number, and the nature of the discrepancy between
the order and the shipment or the exact nature of the discrepancy in the
shipping or other charges, as applicable. Each shipment of the Aject and of the
AngioSense Product hereunder shall be accompanied by certified quality control
protocol such and other information as may be reasonably requested by AngioSense
from time to time for each lot of the Aject (alone or as part of an AngioSense
Product) therein as well as such customs and other documentation as is necessary
or appropriate.
8.10 Return of Product. All returns of the Aject (alone or as part of the
AngioSense Product) shall be in accordance with a mutually agreeable product
return policy.
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ARTICLE 9
TRANSFER PRICING; ROYALTIES; PAYMENTS;
BOOKS AND RECORDS
9.1 Transfer Pricing.
9.1.1 Commercial Products. Subject to the provisions of Section 8.5.2.3,
the transfer price of the Aject (alone or as part of the AngioSense Product)
supplied to AngioSense hereunder is estimated as set forth in Exhibit E (the
"Estimated Transfer Price") based on Bioject's representation of the current
configuration of the Iject. The actual transfer price for the Aject (alone or as
part of the AngioSense Product) shall be determined by the Joint Development
Committee in the context of the Aject Development Budget and the AngioSense
Product Development Budget, respectively, shall take into account estimated
sales volumes, the cost of goods, and the anticipated average selling price of
the Aject (alone or as part of the AngioSense Product) (the "Actual Transfer
Price"); provided however, the parties contemplate that such Actual Transfer
Price shall provide Bioject with a reasonable profit margin, and considered to
be *** to Bioject from the transfer price in Exhibit E of this agreement.
Notwithstanding the foregoing, once the Actual Transfer Price is established,
such Actual Transfer Price shall be subject to an annual increase not to exceed
the greater of *** percent (***%) or the increase in the *** for the immediately
preceding year. Bioject will give AngioSense thirty (30) days' prior written
notice of such increase. With respect to amounts due to Bioject for units of the
Aject supplied to AngioSense under this Section 9.1.1, AngioSense shall pay
Bioject within thirty (30) days of invoice or date of shipment of the Aject,
whichever is later.
9.1.2 Development Products. With respect to units of the Aject to be
used for research, development, and clinical testing within the scope of the
Aject Development Plan and the AngioSense Product Development Plan and in
accordance with Article 5 of this Agreement II, Bioject agrees to transfer the
Aject (alone or to be used as part of the AngioSense Product) free of charge;
provided, however AngioSense shall be responsible for all shipping and insurance
charges for such as set forth in Section 8.7 above. Notwithstanding anything
herein to the contrary, Bioject shall be obligated to supply only those
quantities of the Aject for use within the scope of the Aject Development Plan
and the AngioSense Development Plan as reasonably determined by the Joint
Development Committee. All units of the Ajects supplied to AngioSense under this
Section 9.1.2 shall not be used for any other purpose.
9.2 Inventory. During the term of this Agreement II, AngioSense shall
maintain a quantity of the Aject as AngioSense deems appropriate, in its sole
discretion, in order to meet the product requirements of AngioSense's customers
and potential customers.
9.3 Royalty. In consideration of the rights granted to AngioSense
hereunder, AngioSense shall pay Bioject a royalty equal to *** percent (***%) of
*** of the Aject and/or the AngioSense Product by AngioSense, its Affiliates and
Sublicensees covered by a Valid Claim of a Licensed Patent, or any patent which
claims Joint Inventions, in the country in which such is sold. Payments under
this Section 9.3 shall be made on no more than one sale transaction for each
Aject
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and/or AngioSense Product. No multiple royalties shall be payable regardless of
the fact that the manufacture, use or sale of the Aject and/or the AngioSense
Product may be covered by more than one Valid Claim licensed hereunder. For the
removal of doubt, the royalties payable under this Section 9.3 shall continue to
apply after the manufacturing license in Section 8.5.2 becomes effective.
9.3.1 Royalty Payments. With respect to royalties due on sales of the
Aject this Section 9.3, AngioSense shall provide to Bioject a quarterly royalty
report as follows: After the first sale of the Aject (alone or as part of the
AngioSense Product) hereunder, within forty-five (45) days after the end of each
calendar quarter, AngioSense shall deliver to Bioject a true and accurate
report, giving such particulars of the business conducted by AngioSense, its
Affiliates and Sublicensees, if any, during such calendar quarter as are
pertinent to account for royalties due under this Article 9, except upon
AngioSense's exercise of the rights granted under Section 8.5.2, in which case
AngioSense will make such reports and payments to Bioject within forty-five (45)
days after the end of AngioSense's fiscal year. Such report shall include at
least (i) the total of *** of the Aject (alone or as part of the AngioSense
Product) during such fiscal period; and (ii) the calculation of royalties owed
to Bioject. Simultaneously with the delivery of each such report, AngioSense
shall pay to Bioject the total royalties, if any, due to Bioject for the fiscal
period of such report. AngioSense shall make all payments to Bioject under this
Agreement II by wire transfer in United States dollars in immediately available
funds to a bank designated by Bioject.
9.4 Sublicense Fees. AngioSense shall pay to Bioject *** percent (***%) of
revenue received from Sublicensees in the form of up front license fees and
milestone fees, excluding revenue received for *** and ***.
9.5 Third Party Royalties. If AngioSense takes a licenses or otherwise
acquires rights from a third party necessary for the sale or use of the Aject
(alone or as part of the AngioSense Product) within the Field, then AngioSense
shall have the right to deduct the amounts actually paid by AngioSense to the
third party against royalties payable under Section 9.3 above, unless such
technology is protected by a patent owned by AngioSense or its Affiliates.
Notwithstanding the foregoing, in no event shall the royalties due Bioject be
reduced to less than one-third of the royalties payable before the deduction
described in this Section 9.5.
9.6 Records; Inspection. AngioSense shall keep, and require its Affiliates
and Sublicensees to keep, complete, true and accurate books of accounts and
records for the purpose of determining the amounts payable under this Article 8.
Such books and records shall be kept for at least three (3) years following the
end of the calendar quarter to which they pertain. Such records will be open for
inspection during such three (3) year period by an independent auditor chosen by
Bioject and reasonably acceptable to AngioSense for the purpose of verifying the
amounts payable by AngioSense under this Article 9. Such inspections may be made
no more than once each calendar year, at reasonable times and on reasonable
notice. The independent auditor shall be obligated to execute a reasonable
confidentiality agreement prior to commencing any such inspection. Inspections
conducted under this Section 9.6 shall be at the expense of Bioject, unless a
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variation or error producing an underpayment in amounts payable exceeding five
percent (5%) of the amount paid for any period covered by the inspection is
established in the course of any such inspection, whereupon all costs relating
to the inspection for such period and any unpaid amounts that are discovered
shall be paid by AngioSense, together with interest on such unpaid amounts equal
to the lesser of the prime rate as reported in The Wall Street Journal (U.S.,
Eastern edition) on the last day of the calendar quarter which such unpaid
amounts applied plus one percent (1%) per month or the maximum rate permitted by
applicable law, calculated on the number of days overdue. The parties will
endeavor to minimize disruption of AngioSense's normal business activities to
the extent reasonably practicable.
ARTICLE 10
COMMERCIALIZATION
10.1 Technical Literature. Bioject shall provide to AngioSense appropriate
technical information relating to the Aject from time to time during the term of
this Agreement II to assist AngioSense in developing appropriate technical
literature and marketing materials to support its efforts in the
commercialization of the Aject (alone or as part of the AngioSense Product).
10.2 Product Packaging and Labeling. The trade dress, style of packaging
and the like with respect to the Aject and the AngioSense Product will be
determined by AngioSense so as to be consistent with AngioSense's standard trade
dress and style. AngioSense shall be responsible for any increase in packaging
and labeling costs over Bioject's current standard costs.
ARTICLE 11
PRODUCT WARRANTY
11.1 Product Warranty. Bioject warrants to AngioSense that at the time of
delivery to AngioSense of the Aject (alone or as part of the AngioSense Product)
purchased by AngioSense shall (i) have been manufactured in compliance with Good
Manufacturing Practices (GMP) as established by the FDA and (ii) conform to the
Aject Specification and/or AngioSense Product Specification as the case may be.
Bioject makes no warranty (express, implied, or statutory) for any Aject (alone
or as part of the AngioSense Product) that is modified or subjected to accident,
misuse, neglect or improper storage. If the Aject (alone or as part of the
AngioSense Product) supplied hereunder fails to conform to the applicable Aject
Specification and/or AngioSense Product Specification, AngioSense shall notify
Bioject no later than thirty (30) days after its discovery of the nonconformity
(but in no event later than one hundred and eighty-five (185) days after
delivery) and AngioSense shall present reasonable evidence to Bioject of such
nonconformity. Bioject agrees to replace at no additional expense to AngioSense
such a nonconfirming Aject (alone or as part of the AngioSense Product) with a
new such Aject which conforms to the applicable Aject Specification and/or
AngioSense Product Specifications within thirty (30) days after receipt of
AngioSense's notification under this Section 11.1. Bioject may analyze the Aject
rejected by AngioSense for nonconformity and if it is objectively established
that the Aject was conforming, then AngioSense shall be responsible for payment
of the Aject. All returns shall be as set forth in Section 8.9 above. Bioject's
sole obligation under the warranty stated above shall be to repair or replace at
Bioject's
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option any nonconforming Ajects. OTHER THAN EXPRESSLY SET FORTH HEREIN, BIOJECT
MAKES NO OTHER WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE.
ARTICLE 12
INTELLECTUAL PROPERTY
12.1 Bioject Field and AngioSense Field. The parties acknowledge that
Bioject has considerable knowledge and expertise in the area of jet injection
(the "Bioject Field") and that AngioSense has considerable knowledge and
expertise in the area of delivery of a drug or biologic agent to the cardiac or
cardiovascular system via (i) a catheter or (ii) a non-catheter based delivery
method ( the "AngioSense Field").
12.2 Joint Inventions. Subject to the rights and licenses granted herein,
all right, title and interest in and to all inventions and other intellectual
property made jointly by personnel of AngioSense and Bioject ("Joint
Invention"), shall be assigned to AngioSense. AngioSense shall retain the
exclusive right to practice in the AngioSense Field under the Joint Invention,
and as licensed under this Agreement II. Bioject shall retain no right to
practice in the AngioSense Field under the Joint Invention. AngioSense hereby
grants to Bioject a royalty-free exclusive worldwide license, with the right to
sublicense, under Joint Invention to develop, make, have made, use, import,
distribute, and sell products in the Bioject Field, except for those areas of
the Bioject Field licensed under this Agreement II. AngioSense shall retain no
right to practice in the Bioject Field under Joint Invention, except as licensed
under this Agreement II.
12.3 Joint Rights. The parties shall share rights to practice under the
Joint Invention in areas other than the AngioSense Field and the Bioject Field
(the "Joint Rights"), with each party required to gain the written consent of
the other in order to sublicense such Joint Rights, which consent shall not be
unreasonably withheld; and with an obligation to account to and share with the
other party revenues or royalties accrued and paid on account of the exercise of
the Joint Rights. The parties agree to negotiate in good faith revenue sharing
relating to the Joint Rights, based on the relative contribution of each party's
technology to the subject Joint Invention. Each party shall promptly notify the
other party in writing of any Joint Invention, which obligation shall be met by
disclosure at the next meeting of the Joint Development Committee. Each party
shall ensure that all employees and consultants of such party, assist the other
in accomplishing the foregoing.
12.4 Sole Inventions. Subject to the rights and licenses granted herein,
all right, title and interest in and to all inventions and other intellectual
property made solely by personnel of a party hereto in connection with the
performance of such party's obligations hereunder shall be owned solely by such
party (a "Sole Invention"). AngioSense will promptly advise Bioject of the
filing of any patent application covering an AngioSense Sole Invention having
claims that include or reference technology covered by any Bioject patent (now
existing or issued during the term of this Agreement)Bioject will promptly
advise AngioSense of the filing of any patent application covering a Bioject
Sole Invention having claims that include or reference technology covered by any
AngioSense patent (now existing or issued during the term of this Agreement).
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12.4.1 AngioSense License Grant to Bioject. AngioSense hereby grants
to Bioject a royalty-bearing, exclusive worldwide license, with the right to
sublicense, under such AngioSense Sole Inventions to develop, make, have made,
use, import, distribute, and sell products in the Bioject Field but outside the
Field and outside the licensed portions of the Extended Field. Bioject agrees to
pay AngioSense a royalty equal to *** percent (*** %) of *** on products sold,
leased, distributed or transferred by Bioject, and its Affiliates and
Sublicensees wherein such products are covered by a Valid Claim of any such
patent covering an AngioSense Sole Invention. AngioSense shall retain no right
to practice in the Bioject Field under such AngioSense Sole Invention, except as
licensed under this Agreement II.
12.4.2 Bioject License Grant to AngioSense. Bioject hereby grants to
AngioSense a royalty-bearing, exclusive worldwide license, with the right to
sublicense, under such Bioject Sole Invention to develop, make, have made, use,
import, distribute, and sell products in the AngioSense Field. AngioSense agrees
to pay Bioject a royalty equal to *** percent (***%) of *** on products sold,
leased, distributed or transferred by Bioject, and its Affiliates and
Sublicensees wherein such products are covered by a Valid Claim of any such
patent covering an Bioject Sole Invention. Bioject shall retain no right to
practice in the AngioSense Field under such Bioject Sole Invention, except
pursuant to the provisions of this Agreement II. 12.4.3 Payment; Sublicenses;
Third Party Licenses. All provisions of Article 8 of this Agreement II relating
to payment of royalties, sublicense fee, and third party licenses shall apply to
the licenses granted under Section 12.4 hereunder.
12.5 Patent Prosecution.
12.5.1 Sole Inventions. Each party shall, at its expense, control the
preparing, filing, prosecuting and maintaining the patent applications developed
solely by its employees during the course of this Agreement. In the event a
party elects not to maintain a patent, that party shall notify the other party,
in writing, at least thirty (30) days prior to the due date of a maintenance
fee, and that other party shall have the option of paying the fee to maintain
the patent. In that event, the patent shall be assigned to the party paying the
maintenance fee.
12.5.2 Joint Inventions. AngioSense shall have the first right to
prepare, file, prosecute and maintain patent applications and patents which
claim Joint Inventions. Without limiting the foregoing, AngioSense agrees to
first consult with Bioject as to the preparation, filing, prosecution and
maintenance of such patents and patent applications and shall furnish to Bioject
copies of documents relevant to any such preparation, filing, prosecution and
maintenance and AngioSense further agrees to incorporate all of Bioject's
reasonable comments with respect thereto. In the event that AngioSense elects
not to pay any costs and fees with respect to a particular patent or patent
application covering a Joint Invention or elects not to pursue patent protection
for any Joint Invention, then AngioSense shall give Bioject at least thirty (30)
days prior written notice thereof and shall assign to Bioject all of its right,
title and interest therein.
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12.5.3 Cooperation. Bioject shall cooperate with AngioSense in
connection with such activities under Section 12.5.2, at AngioSense's request
and expense.
12.6 Improvements. Upon conceiving of an Improvement, the conceiving party
shall promptly disclose to the other party the inventions, patent rights and
other subject matter within the Improvement so conceived. This prompt disclosure
requirement shall be met if disclosure is made at the next meeting of the Joint
Development Committee. Upon AngioSense's request Bioject shall provide
AngioSense with access to Technical Information as reasonably necessary for
AngioSense to exploit the licenses granted in this Agreement II.
12.7 Defense of Third Party Infringement Claims. If the sale or use of the
Aject within the Field pursuant to this Agreement II results in a claim, suit or
proceeding brought by a third party against AngioSense or Bioject alleging
infringement of such third party's patents ("Action"), such party shall promptly
notify the other party hereto in writing. The party subject to such Action shall
have the exclusive right to defend and control the defense of any such Action
using counsel of its own choice, and the Action shall be at such party's own
expense; provided, however, that the other party may participate in the defense
and/or settlement thereof at its own expense with counsel of its choice. The
party subject to the Action agrees to keep the other party hereto reasonably
informed of all material developments in connection with any such Action. If
both parties are named as defendants or are the subject of a claim, they agree
to jointly defend the action. In the event of such joint defense, the parties
shall agree to equal finding as well as equal say in the determination of
counsel, control of the litigation and the settlement thereof.
12.8 Enforcement. If either party determines or has a reason to believe
that any Licensed Patent or any patent covering Joint Inventions, which is
necessary for the manufacture, use or sale of the Aject, is being infringed by a
third party or is subject to a declaratory judgment action arising from such
infringement, (an "Infringement"), such party shall promptly notify the other
party hereto.
12.8.1 By Bioject. Bioject shall have the first right (itself or
through others), at its sole option and expense, to bring suit to enforce the
intellectual property rights within such Licensed Technology and/or to defend
any declaratory judgment action with respect thereto, in each case with respect
to an Infringement (each, for purposes of Section 12.8, an "Enforcement
Action").
12.8.2 By AngioSense. In the event Bioject elects not to initiate an
Enforcement Action against a commercially significant Infringement, within three
(3) months of a request by AngioSense to do so, AngioSense may initiate such
Enforcement Action at its expense with Bioject's prior written consent, as the
parties mutually agree. Bioject shall have the right to participate in any such
action with counsel of its own choice at its own expense.
12.8.3 Recoveries. All recoveries from an Enforcement Action shall be
first applied to reimburse the controlling party's and then the non-controlling
party's unreimbursed expenses, including without limitation, reasonable
attorney's fees and court costs. Any remainder shall, to the extent the same
relates to the Infringement, be treated as Net Sales.
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12.8.4 Cooperation. In addition, with regard to any Enforcement Action
the non-controlling party shall cooperate with the controlling party, including
without limitation, by joining as a party plaintiff, executing documents and
making available all relevant personnel, records, papers, information, samples,
specimen and other similar materials in the non-controlling party's possession,
in each case as the controlling party may reasonably request
ARTICLE 13
REPRESENTATIONS AND WARRANTIES
13.1 Bioject Warranties. Bioject warrants and represents to AngioSense that
(i) it has the full right and authority to enter into this Agreement II and
grant the rights granted herein; (ii) it has not previously granted and will not
grant any rights in conflict with the rights granted herein; (iii) to Bioject's
knowledge and belief, there are no threatened or pending actions, suits or
claims against it with respect to its right to enter into and perform its
obligations under this Agreement II; and (iv) Bioject's obligations and
AngioSense's rights hereunder shall not be encumbered or in any way diminished
by a Change in Control of Bioject.
13.2 AngioSense Warranties. AngioSense warrants and represents to Bioject
that (i) AngioSense has the full right and authority to enter into this
Agreement and grant the rights granted herein; (ii) AngioSense has not
previously granted and will not grant any rights in conflict with the rights
granted herein; (iii) to AngioSense's knowledge and belief, there are no
existing or threatened actions, suits or claims pending against it with respect
to its right to enter into and perform its obligations under this Agreement; and
(iv) AngioSense's obligations and Bioject's rights hereunder shall not be
encumbered or in any way diminished by a Change in Control of AngioSense.
ARTICLE 14
CONFIDENTIALITY
14.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the term of this Agreement II and thereafter, the
receiving party shall not publish or otherwise disclose and shall not use for
any purpose any information furnished to it by the other party hereto pursuant
to this Agreement II which if disclosed in tangible form is marked
"Confidential" or with other similar designation to indicate its confidential or
proprietary nature, or if disclosed orally is confirmed as confidential or
proprietary by the party disclosing such information at the time of such
disclosure ("Confidential Information"). Notwithstanding the foregoing, it is
understood and agreed that Confidential Information shall not include
information that, in each case as demonstrated by written documentation: (a) was
already known to the receiving party, other than under an obligation of
confidentiality, at the time of disclosure; (b) was generally available to the
public or otherwise part of the public domain at the time of its disclosure to
the receiving party; (c) became generally available to the public or otherwise
part of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement II; or (d) was
subsequently lawfully disclosed to the receiving party by a person other than a
party hereto or developed by the receiving party without reference to any
information or materials disclosed by the disclosing party.
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14.2 Permitted Disclosures. Notwithstanding the provisions of Section 14.1
above, each party hereto may disclose the other's Confidential Information to
the extent such disclosure is reasonably necessary, in filing or prosecuting
patent applications, prosecuting or defending litigation, complying with
applicable governmental regulations, submitting information to tax or other
governmental authorities, or conducting clinical trials or in exercising its
rights hereunder (including granting any permitted sublicenses), provided that
if a party is legally required to make any such disclosure of another party's
Confidential Information, to the extent it may legally do so, it will give
reasonable advance written notice to the latter party of such disclosure and,
save to the extent inappropriate in the case of patent applications, will use
its reasonable efforts to secure confidential treatment of such Confidential
Information prior to its disclosure (whether through protective orders or
otherwise).
ARTICLE 15
INDEMNIFICATION
15.1 Indemnification of Bioject. AngioSense shall indemnify each of Bioject
and its directors, officers, and employees and the licensors, successors and
assigns of any of the foregoing (the "Bioject Indemnitees"), and hold each
Bioject Indemnitee harmless from and against any and all liabilities, damages,
settlements, claims, actions, suits, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' fees and other expenses of
litigation) (a "Claim") incurred by any Bioject Indemnitee, arising from or
occurring as a result of a product liability claim for the Aject (alone or as
part of the AngioSense Product) except in which such claim is due to a breach of
Bioject's warranties under Section 13.1.
15.2 Indemnification of AngioSense. Bioject shall indemnify each of
AngioSense and its directors, officers, and employees and the successors and
assigns of any of the foregoing (the "AngioSense Indemnitees"), and hold each
AngioSense Indemnitee harmless from and against any and all liabilities,
damages, settlements, claims, actions, suits, penalties, fines, costs or
expenses (including, without limitation, reasonable attorneys' fees and other
expenses of litigation) (a "Claim") incurred by any AngioSense Indemnitee,
arising from or occurring as a result of breach of Bioject's warranties under
Section 13.1.
15.3 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 14 shall promptly notify the other party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its directors, officers, employees,
licensors, successors or assigns intends to claim such indemnification, the
Indemnitor shall have sole control of the defense and/or settlement thereof. The
indemnity agreement in this Article 15 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the consent of
the Indemnitor, which consent shall not be withheld unreasonably. The failure to
deliver written notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Article 15 but the omissions so to deliver written notice to the Indemnitor
shall not relieve the Indemnitor of any liability that it may have to any
Indemnitee otherwise than under this Article 15. The Indemnitee under this
Article 15 and its employees, shall
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cooperate fully with the Indemnitor and its legal representatives and provide
full information in the investigation of any Claim covered by this
indemnification.
ARTICLE 16
TERM AND TERMINATION
16.1 Term. This Agreement II shall become effective as of the Effective
Date and, unless earlier terminated pursuant to the other provisions of this
Article 16, shall continue in full force and effect for the longer of (i)
fifteen (15) years after the Effective Date or (ii) expiration, revocation or
invalidation of the last patent or abandonment of the last patent application
within the Licensed Patents.
16.2 Termination for Cause. Either Bioject or AngioSense may terminate this
Agreement II by written notice stating each party's intent to terminate in the
event the other shall have materially breached or defaulted in the performance
of any of its material obligations hereunder, and such default shall have
continued for sixty (60) days after written notice thereof was provided to the
breaching party by the non-breaching party.
16.3 Bankruptcy Proceedings. Either party hereto may terminate this
Agreement II by notice to the other party, if (i) such other party shall make an
assignment of substantially all of its assets for the benefit of creditors, file
a petition in bankruptcy, petition or apply to any tribunal for the appointment
of a custodian, receiver or any trustee for such party or substantially all of
such party's assets, or shall commence any proceeding under any dissolution or
liquidation law or statute of any jurisdiction (provided that no entity succeeds
to the business of such party following such dissolution or liquidation) whether
now or hereafter in effect which is not dismissed within sixty (60) days; or
(ii) there shall have been filed any such petition or application against such
other party, or any such proceeding shall have been commenced against such
party, in which an order for relief is entered or which remains undismissed for
a period of ninety (90) days or more; or (iii) such other party by an act or
knowing failure to act shall indicate such party's consent to, approval of or
acquiescence in, any such petition, application or proceeding or order for
relief or the appointment of a custodian, receiver or any trustee for such
party, or any substantial part of any of such party's properties, or shall
suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of ninety (90) days or more.
16.4 Effect of Expiration and Termination.
16.4.1 Accrued Obligations. Termination of this Agreement II for any
reason shall not release any party hereto from any liability which, at the time
of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination, nor preclude either party
from pursuing all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement II.
16.4.2 Refund of Aject Development Funding. In the event that
AngioSense terminates this Agreement II for cause pursuant to Section 16.2
above, Bioject shall refund within
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thirty (30) days of the effective date of such termination all Costs, as defined
in Section 3.3, paid to Bioject pursuant to Article 3 for the three (3) month
period to which the most recent Cost payment applies in excess of the Aject
Development Costs and the AngioSense Product Development Costs incurred by
Bioject during such three month period and prior to the effective date of such
termination. Bioject will provide AngioSense a financial statement setting forth
the Costs incurred for such three (3) month period prior to the effective date
of such termination; provided, however in the event Bioject disputes in good
faith AngioSense's right to terminate the Agreement II for cause, then Bioject
shall place any disputed amounts into an interest bearing escrow and AngioSense
shall not be entitled to such refund until it is determined in accordance with
Section 18.2 below that Bioject was in material breach or default in the
performance of any of its material obligations hereunder and failed to correct
such breach or default, within sixty (60) days after receipt of notice from
AngioSense under Section 16.2, in which case the disputed amounts plus interest
shall be refunded to AngioSense, or in the case that it is determined that
AngioSense did not have the right to terminate this Agreement II for cause,
Bioject shall have the right to retain such disputed amounts plus interest.
16.4.3 Products in Inventory. AngioSense shall purchase all units of
the Aject (alone or as part of the AngioSense Product) ordered pursuant to
Section 8.5.1 as of the date of termination. AngioSense and its Affiliates and
Sublicensees shall have the right to distribute any units of the Aject (alone or
as part of the AngioSense Product) in their inventories or otherwise in their
control as of the termination of this Agreement II for a period not to exceed
six (6) months from such termination, in all cases, subject to the payments
under Article 9 above.
16.4.4 No Renewal, Extension or Waiver. Acceptance by Bioject of any
order for the Aject (alone or as part of the AngioSense Product) from AngioSense
after the effective date of termination of this Agreement II shall not be
construed as a renewal or extension hereof, or as a waiver of termination of
this Agreement II.
16.4.5 Return of Equipment. Immediately upon termination or expiration
of this Agreement II, Bioject shall return to AngioSense all Equipment provided
to it under this Agreement II.
16.5 Survival. Articles 1, 11, 12, 13, 14, 15, 16, 17 and 18, and Sections
3.6 and 9.6 shall survive expiration or termination of this Agreement II for any
reason.
ARTICLE 17
LIMITATION OF LIABILITY
EXCEPT WITH RESPECT TO A BREACH OF ARTICLE 15, IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER OR ANY THIRD PARTY FOR COSTS OF PROCUREMENT OF SUBSTITUTE
GOODS, LOST PROFITS, OR ANY OTHER SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES,
HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY ARISING OUT OF THIS AGREEMENT
WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE. THESE
LIMITATIONS
-25-
<PAGE>
SHALL APPLY WHETHER OR NOT A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY PROVIDED HEREIN.
ARTICLE 18
MISCELLANEOUS
18.1 Governing Law. This Agreement II and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with, the laws of the State of California, without reference to
conflicts of laws principles.
18.2 Disputes.
18.2.1 Resolution. In the event that the Joint Development Committee,
or Bioject and AngioSense, are unable to resolve any dispute between them,
either Bioject or AngioSense may, by written notice to the other, have such
dispute referred to the Chief Executive Officers (or equivalent) of Bioject and
AngioSense, for attempted resolution by good faith negotiations within
twenty-one (21) days after such notice is received. Unless otherwise mutually
agreed, the negotiations between the designated officers shall be conducted by
telephone, within three (3) days and at times within the period stated above
offered by the designated officers of AngioSense to the designated officer of
Bioject for consideration.
18.2.2 Arbitration. AngioSense and Bioject agree that any dispute or
controversy arising out of, in relation to, or in connection with this Agreement
II, or the validity, enforceability, construction, performance or breach hereof,
and not settled pursuant to Section 18.2.1 above shall be settled by binding
arbitration as set forth in Exhibit F.
18.3 Force Majeure. Nonperformance of any party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, delay or failure of suppliers, or any other reason where failure
to perform is beyond the reasonable control and not caused by the gross
negligence or willful misconduct of the nonperforming party.
18.4 No Implied Waivers; Rights Cumulative. No failure on the part of
Bioject or AngioSense to exercise and no delay in exercising any right under
this Agreement II, or provided by statute or at law or in equity or otherwise,
shall impair, prejudice or constitute a waiver of any such right, nor shall any
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
18.5 Independent Contractors. Nothing contained in this Agreement II is
intended implicitly, or is to be construed, to constitute Bioject or AngioSense
as partners in the legal sense. No party hereto shall have any express or
implied right or authority to assume or create any obligations on behalf of or
in the name of any other party or to bind any other party to any contract,
agreement or undertaking with any third party.
-26-
<PAGE>
18.6 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by registered or
certified mail, return receipt requested, postage prepaid, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other parties hereto:
AngioSense: AngioSense, Inc
2611 Knollwood Drive
Cameron Park, California 95682
Attn: Robert C. Glines
with a copy to: Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attn: Casey McGlynn, Esq.
Bioject: Bioject, Inc.
7620 S.W. Bridgeport Road
Portland, Oregon 97224
Attn: Chief Financial Officer
with a copy to: Stoel Rivers LLP
900 S.W. Fifth Avenue, Suite 2600
Portland, Oregon 97204
Attn: Annette Mulee, Esq.
18.7 Assignment. This Agreement shall not be assignable by either party to
any third party without the written consent of the other party hereto any
attempted assignment in violation of this Section 17.7 shall be null and void.
Notwithstanding the foregoing, AngioSense may assign this Agreement without
Bioject's consent to an entity that acquires all or substantially all of its
business or assets whether by merger, acquisition, or otherwise; provided that
such entity does not generate ten percent (10%) or more of its revenue from the
development, manufacture or distribution of jet injection technology (a "Jet
Injection Entity"). Assignment to any Jet Injection Entity is subject to the
first sentence of this Section 18.7.
18.8 Visiting Personnel. Certain activities of the parties hereunder may
include certain one party's personnel including without limitation senior
scientists visiting and/or being stationed at the other party's facilities for
some period of time; in such case such the visiting personnel shall be bound by
all rules and regulations pertaining to such facilities during the time at the
facilities and each party shall be responsible for and assume all risk of injury
or damage done or suffered by its personnel when such personnel are at the other
party's facilities, except for injury or damage caused by the negligence or
misconduct of the other party.
-27-
<PAGE>
18.9 Modification. No amendment or modification of any provision of this
Agreement II shall be effective unless in writing signed by all parties hereto.
No provision of this Agreement II shall be varied, contradicted or explained by
any oral agreement, course of dealing or performance or any other matter not set
forth in an agreement in writing and signed by all parties.
18.10 Severability. If any provision hereof should be held invalid, illegal
or unenforceable in any jurisdiction, all other provisions hereof shall remain
in full force and effect in such jurisdiction and shall be liberally construed
in order to carry out the intentions of the parties hereto as nearly as may be
possible. Such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction.
18.11 Publicity. Each of the parties hereto agrees not to disclose to any
third party the terms and conditions of this Agreement II without the prior
written consent of the other party hereto, except to advisors, investors and
others on a need-to-know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law.
18.12 Headings. Headings used herein are for convenience only and shall not
in any way affect the construction of or be taken into consideration in
interpreting this Agreement II.
18.13 No Implied Licenses. Except as expressly provided herein, no party
hereto grants to any other party hereto any rights or licenses under such
party's patent rights, trade secrets or other intellectual property rights.
18.14 Entire Agreement. This Agreement II, including the Exhibits attached
hereto, constitutes the entire agreement with respect to the subject matter
hereof, and supersedes all prior or contemporaneous understandings or
agreements, whether written or oral, between Bioject and AngioSense with respect
to such subject matter.
18.15 Counterparts. This Agreement II may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together, shall constitute one and the same instrument.
-28-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement II to
be duly executed and delivered effective as of the Effective Date.
Bioject, Inc. AngioSense, Inc.
("Bioject") ("AngioSense")
By: ------------------------------- By: -------------------------------
Name: ---------------------------- Name: -----------------------------
Title: ---------------------------- Title: ----------------------------
-29-
<PAGE>
List of Exhibits:
-----------------
Exhibit A--Licensed Patents
Exhibit B--Aject Development Plan
Exhibit C--Milestone and Stock Purchase Schedule
Exhibit D--Form of Stock Purchase Agreement
Exhibit E--Transfer Pricing Schedule
Exhibit F--Arbitration Procedures
<PAGE>
EXHIBIT A
LICENSED PATENTS
<TABLE>
Patent Docket
Date Number Number Country Description Area of Protection
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jan 30, 1997 5782802 15466-011 USA Multiple use needle-less Apparatus
hypodermic injection
device for individual users
Aug 5, 1998 4966581 98019 USA
</TABLE>
<PAGE>
LICENSED PATENT APPLICATIONS
<TABLE>
Date Docket Number Country Description Area of Protection
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
*** *** *** *** ***
*** *** *** *** ***
*** *** *** *** ***
</TABLE>
<PAGE>
EXHIBIT B
EQUIPMENT
1. All tooling and molds necessary for developing and manufacturing the Iject
and the Aject (alone or as part of the AngioSense Product) quantities
sufficient to meet AngioSense's requirements.
<PAGE>
EXHIBIT C
Milestone Schedule
In the event that each of the following three (3) milestones (each, an
"Iject/Aject Milestone") is achieved by or before the due date listed across
from such Milestone (each such date, an "Iject/AjectMilestone Due Date"),
AngioSense shall issue to Bioject 277,222 shares of Common Stock pursuant to the
terms of the Stock Purchase Agreement by and between Bioject and AngioSense and
of even date herewith (the "Stock Purchase Agreement"), which Stock Purchase
Agreement is attached as Exhibit D to the Agreement. If any one or more of the
Iject/Aject Milestones is not achieved by the applicable Iject/Aject Milestone
Due Date, then the condition precedent to AngioSense's obligation to issue
shares to Bioject pursuant to Section 3 of the Stock Purchase Agreement in
connection with the Iject Product will not be met and AngioSense shall have no
obligation to issue any such shares pursuant to such Section 3. Should the
milestones not be achieved on a timely basis, Angiosense shall issue 277,222
shares when the milestones are completed, or decide to cancel the project, and
Bioject's entire obligation under Agreement II will be cancelled.
<TABLE>
Iject/Aject Milestones Due Date
- --------------------------------------------------------------------------------------------------------
<S> <C>
1. Provide AngioSense with three intraoperative prototype devices for use in ***
animal studies
2. Use commercially reasonable efforts to assist AngioSense, as reasonably ***
requested, prior to the Due Date in submitting 1st regulatory filing for
the Aject device, whether or not AngioSense submits any such filing by the
Due Date. Bioject shall not be held responsible for filing of AngioSense's
regulatory submissions.
3. Provide necessary information and documentation to AngioSense, as ***
reasonably requested prior to the Due Date, for filing U.S. patent
application for the Aject device, whether or not AngioSense submits any
such filing by the Due Date. Bioject shall not be held responsible for
filing of AngioSense's U.S. patent application.
</TABLE>
<PAGE>
EXHIBIT E
Estimated Transfer Price Schedule
Annual Unit Purchases
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Device 5,000 10,000 20,000 50,000 75,000 100,000
- ---------------------------------------------------------------------------------------------------------------------
Aject (preliminary estimate based on current *** *** *** *** *** ***
configuration of Iject)
</TABLE>
* ***
<PAGE>
EXHIBIT F
ARBITRATION
(a) Initiation of Arbitration. A party ("Complaining Party") which intends
to begin an arbitration to resolve a Dispute as contemplated by Section of the
Agreement ("Arbitration") shall initiate the Arbitration by providing written
notice ("Arbitration Request") of such intent by certified or registered mail or
properly documented overnight delivery to the other party ("Responding Party").
The Arbitration Request shall include a copy of the Description of Dispute, set
forth a proposed solution to the Dispute, and include a suggested time frame
within which the parties must act to effect such solution. Contemporaneously
with sending the Arbitration Request, the Complaining Party shall submit a copy
of the Arbitration Request to the American Arbitration Association in the city
in which the Arbitration is to be conducted as provided in Paragraph (d) below.
(b) Selection of Arbitration. Any and all Disputes to be resolved pursuant
to Arbitration shall be submitted to a neutral arbitrator ("Arbitrator"). The
parties shall select the Arbitrator by mutual agreement but if the parties are
unable to agree, then the Arbitrator shall be selected in accordance with the
procedures of the American Arbitration Association. The Arbitrator shall be a
former judge of a state or federal court who shall not be a current or former
employee, director or shareholder of, or otherwise have any current or previous
relationship with, either party or its respective affiliates.
(c) American Arbitration Association Rules. The Arbitration shall be
conducted in accordance with the rules of the American Arbitration Association
then in effect, subject to the time periods and other provisions of this Exhibit
or as otherwise set forth in the Agreement.
(d) Hearing. Consistent with the time schedule established pursuant to this
paragraph (d) and Paragraph (e) below, the Arbitrator shall hold a hearing
("Hearing") to resolve each of the issues identified in the Description of
Dispute. To the extent practicable taking into account the nature of the Dispute
and the availability of the Arbitrator, the Hearing shall be conducted over a
period not to exceed two (2) consecutive business days, with each party entitled
to approximately half of the allotted time unless otherwise ordered by the
Arbitrator. The Hearing shall be conducted in a location to be mutually agreed
by the parties.
(e) Discovery. Within ten (10) days of receipt by the Responding Party of
the Arbitration Request the parties shall negotiate in good faith the scope and
schedule of discovery, including depositions, document production and other
discovery devices, taking into account the nature of the Dispute submitted for
resolution. If the parties are unable to reach agreement as to the scope and
schedule of discovery, the Arbitrator may order such discovery as he or she
deems necessary. In either case, such discovery shall be completed within sixty
(60) days from the date of the selection of the Arbitrator. At the hearing,
which shall commence within twenty (20) days after the completion of discovery
unless the Arbitrator otherwise orders, the parties may present testimony
(either live witness or deposition), subject to cross-examination, and
documentary evidence.
<PAGE>
(f) Hearing Submission. At least twenty (20) business days prior to the
date set for the Hearing, each party shall submit to each other and the
Arbitrator a list of all documents on which such party intends to rely in any
oral or written presentation at the Hearing, a list of all witnesses, if any,
such party intends to call at the Hearing and a brief summary of each witness'
testimony. At least five (5) business days prior to the Hearing, each party must
submit to the Arbitrator and serve on each other party proposed findings of fact
and conclusions of law on each issue to be resolved. Within five (5) days
following the close of the Hearing, each party shall each submit such
post-Hearing briefs to the Arbitrator addressing the evidence and issues to be
resolved as may be required or permitted by the Arbitrator.
(g) Arbitrator's Duties and Authority. The Arbitrator shall preside over
and resolve any disputes between the parties in connection with the Arbitration.
The Arbitrator shall have sole discretion with regard to the admissibility of
any evidence and all other matters relating to the conduct of the Hearing. The
Arbitrator shall, in rendering its decision, apply the substantive law of the
State of California. The decision of the Arbitrator shall be final and not
appealable, except in the case of fraud or bad faith on the part of the
Arbitrator in connection with the conduct of such proceedings.
(h) Decision and Award. The Arbitrator shall render a decision and award as
expeditiously as possible but in no event more than thirty (30) days after the
close of the hearing. In making the award the Arbitrator shall rule on each
disputed issue. Nothing contained herein shall be construed to permit the
Arbitrator or any court or any other forum to award punitive, exemplary or any
similar damages. By entering into the Agreement and exercising their rights to
arbitrate, the parties expressly waive any claim for punitive, exemplary or any
similar damages. The only damages recoverable under this Agreement are
compensatory damages.
(i) Costs and Expenses. Each party shall pay its own costs (including,
without limitation, reasonable attorneys' fees) and expenses in connection with
the Arbitration; provided, however, that if the Arbitrator determines that the
action of any party was arbitrary, frivolous or in bad faith, the Arbitrator may
award such costs and expenses to the prevailing party.
(j) Confidentiality. The Arbitration shall be confidential and, except as
required by law, neither party shall make (or instruct the Arbitrator to make)
any public announcement with respect to the proceedings or decision of the
Arbitrator without the prior written consent of the other party. The existence
of any Dispute, and the award of the Arbitrator, shall be kept in confidence by
the parties and the Arbitrator, except as required in connection with the
enforcement of such award or as otherwise required by applicable law.
(k) Jurisdiction to Enforce Award. For the purposes of these arbitration
provisions, the decision may be entered in any court of competent jurisdiction.
(l) Exclusive Procedures. The procedures specified herein shall be the sole
and exclusive procedures for the resolution of Disputes between the parties
which are expressly identified for resolution in accordance with these
arbitration provisions.
<PAGE>
EXHIBIT D
ANGIOSENSE, INC.
STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made this 21st day of September, 1999,
between AngioSense, Inc., a Delaware corporation (the "Company") and Bioject,
Inc., an Oregon corporation ("Bioject").
The parties agree as follows:
1. Issuance of Stock. Upon (i) the satisfaction of certain conditions
precedent set out in Section 3 below, or (ii) the occurrence of an event
contemplated by Section 4 hereof, the Company hereby agrees to issue to Bioject
up to an aggregate maximum of 277,222 shares of the Company's Common Stock (the
"Shares").
2. Consideration. The Shares shall be issued in consideration for the
rights granted and performance rendered under that certain Development and
Supply Agreement between the Company and Bioject of even date herewith
("Agreement II").
3. Issuance of Shares upon Iject Milestone Achievement. Upon execution of
this Agreement and Agreement II, and the achievement of all of the Iject
Milestones (as such term is defined in Exhibit C of Agreement II) by the
applicable Iject Milestone Due Dates (as such term is defined in Exhibit C of
Agreement II), the Company shall issue to Bioject all 277,222 of the Shares and
shall issue a duly executed certificate evidencing such shares in the name of
Bioject.
4. Issuance of Shares upon Change in Control. In the event of, and
immediately prior to the closing (the "Closing") of, the merger or consolidation
of the Company with or into another corporation, entity or person or the sale of
all or substantially all of the Company's assets to another corporation, entity
or person, the Company shall issue to Bioject (A) the number of the Shares that
would be issuable pursuant to Section 3 hereof if all conditions precedent to
such issuance under Section 3 were satisfied, provided that (x) the Closing date
is no later than the latest Iject Milestone Due Date and (y) none of the Shares
issuable pursuant to Section 3 have been issued pursuant to Section 3 as of the
Closing date, all provided, however, that the Company shall not be obligated to
issue any shares pursuant to this Section 4 if immediately after such merger,
consolidation or sale of assets, more than 50% of the capital stock or equity
interests in such other corporation, entity or person are owned by persons who
owned in the aggregate more than 50% of the capital stock of the corporation
immediately before such merger, consolidation or sale of assets.
5. Rights Agreement. Bioject and the Company shall enter into a Rights
Agreement, a form of which is attached hereto as Exhibit A, concurrently with
the execution of this Agreement.
<PAGE>
6. Representations and Warranties of the Company. The Company represents
and warrants to Bioject that as of the date of this Agreement, except as
otherwise set forth on the Schedule of Exceptions attached hereto as Exhibit B
setting forth the exceptions which correspond to the numbered sections contained
in this Section 6.
6.1. Organization and Standing; Certificate and Bylaws. The Company is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets and to carry on its
business as presently conducted and as proposed to be conducted. The Company is
qualified to do business as a foreign corporation in each jurisdiction in which
such qualification is required and where failure to be so qualified would not
have a material adverse effect on the Company's business as now conducted or as
proposed to be conducted.
6.2. Corporate Power. The Company has all requisite legal and
corporate power to execute and deliver this Agreement, to sell and issue the
Shares hereunder and to carry out and perform its obligations under the terms of
this Agreement.
6.3. Capitalization. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock, $0.001 par value and 2,750,000
shares of Preferred Stock, 750,000 of which are designated Series A Preferred
Stock with a par value of $0.001 per share and 2,000,000 of which are designated
Series B Preferred Stock with a par value of $0.001 per share. The outstanding
capital stock of the Company as of the date of this Agreement is as set forth in
Section 6.3 of the Schedule of Exceptions. All issued and outstanding shares of
the Company's capital stock have been duly authorized and validly issued, are
fully paid and nonassessable, and were issued in compliance with applicable
federal and state securities laws. Except as set forth in Section 6.3 of the
Schedule of Exceptions, there are no other outstanding shares of capital stock
or outstanding rights of first refusal, preemptive rights or other rights,
options, warrants, conversion rights, or other agreements either directly or
indirectly for the purchase or acquisition from the Company of any shares of its
capital stock.
6.4. Subsidiaries. The Company has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
equity interest in any corporation, association or business entity.
6.5. Authorization. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution, delivery and performance by the Company of this Agreement, the
authorization, issuance, sale and delivery of the Shares, and the performance of
all of the Company's obligations hereunder has been taken or will be taken prior
to the execution of this Agreement. This Agreement, when executed and delivered
by the Company, shall constitute a valid and legally binding obligation of the
Company enforceable in accordance with its respective terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules of law governing specific performance, injunctive relief or other
equitable remedies. The Shares, when issued in compliance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable, and the
Shares will be free of any liens or encumbrances created by the Company,
provided, however, that the Shares may be subject to restrictions on transfer
under applicable securities laws as set forth herein.
-2-
<PAGE>
6.6. Title to Properties and Assets. The Company has good and
marketable title to its tangible properties and assets, and has good title to
all its leasehold interests, in each case subject to no mortgage, pledge, lien,
lease, loan, encumbrance or charge, except (i) the lien of current taxes not yet
due and payable, and (ii) possible minor liens and encumbrances which do not in
any case materially detract from the value of the property subject thereto or
materially impair the Company's operations, and which have not arisen otherwise
than in the ordinary course of business. With respect to property it leases, the
Company is in compliance with such leases in all material respects.
6.7. Compliance with Other Instruments. The Company is not in
violation of any term of its Certificate of Incorporation or Bylaws. The Company
is not in violation of, or in default in any material respect under, the terms
of any mortgage, indenture, contract, agreement, instrument, judgment or decree
applicable to it or to which it is a party, the violation of which would have a
material adverse effect on the Company as a whole, and the Company is not in
violation of any order, statute, rule or regulation applicable to the Company,
the violation of which would have a material adverse effect on the Company.
6.8. Litigation. There is no action, proceeding or investigation
pending, or to Company's knowledge threatened, against the Company or its
officers, directors or stockholders, or, to the Company's knowledge, against
employees or consultants of the Company which might result, either individually
or in the aggregate, in any material adverse change in the business, prospects,
conditions, affairs or operations of the Company. The Company is not a party to
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company currently pending or which the
Company currently intends to initiate.
6.9. Governmental Consents. No consent, approval or authorization of
or designation, declaration or filing with any governmental authority on the
part of the Company is required in connection with the valid execution and
delivery of this Agreement, or the offer, sale or issuance of the Shares except
qualification (or taking such action as may be necessary to secure an exemption
from qualification, if available) of the offer and sale of the Shares under
applicable Blue Sky laws, which filings and qualifications, if required, will be
accomplished in a timely manner.
6.10. Brokers or Finders. The Company has not incurred, and will not
incur, directly or indirectly, as a result of any action taken by or on behalf
of the Company, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement.
6.11. Financial Statements. The Company has furnished Bioject with
copies of all financial statements of the Company available to the Company, and
the current version of the Company's business plan, as of June 21, 1999.
7. Investment Representations; Restriction on Transfer.
(a) In connection with the purchase of the Shares, Bioject represents
to the Company the following:
-3-
<PAGE>
(i) Bioject is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the securities. Bioject
is purchasing these securities for investment for its own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933 (the "Securities Act").
(ii) Bioject is an Accredited Investor, as that term is defined
in Regulation D of the Securities Act.
(iii) Bioject understands that the securities have not been
registered under the Securities Act by reason of a specific exemption therefrom,
which exemption depends upon, among other things, the bona fide nature of
Bioject's investment intent as expressed herein. In this connection, Bioject
understands that, in view of the Securities and Exchange Commission
("Commission"), the statutory basis for such exemption may not be present if
Bioject's representations meant that its present intention was to hold these
securities for a minimum capital gains period under the tax statutes, for a
deferred sale, for a market rise, for a sale if the market does not rise, or for
a year or any other fixed period in the future.
(iv) Bioject further acknowledges and understands that the
securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
Bioject further acknowledges and understands that the Company is under no
obligation to register the securities. Bioject understands that the certificate
evidencing the securities will be imprinted with a legend which prohibits the
transfer of the securities unless they are registered or such registration is
not required in the opinion of counsel for the Company.
(v) Bioject is aware of the adoption of Rule 144 by the
Commission, promulgated under the Securities Act, which permits limited public
resale of securities acquired in a non-public offering subject to the
satisfaction of certain conditions.
(vi) Bioject further acknowledges that in the event all of the
requirements of Rule 144 are not met, compliance with Regulation A or some other
registration exemption will be required, and that although Rule 144 is not
exclusive, the staff of the Commission has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and other than pursuant to Rule 144 will have a substantial burden of
proof in establishing that an exemption from registration is available for such
offers or sales and that such persons and the brokers who participate in the
transactions do so at their own risk.
(b) Bioject agrees, provided that the officers and directors of the
Company agree to be bound by terms substantially identical to those contained in
this subsection 7(b), in connection with the Company's initial public offering
of the Company's securities, upon request of the Company or the underwriters
managing any underwritten offering of the Company's Securities, (i) not to sell,
make any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any shares of Common Stock of the Company held by Bioject (other than
those shares included in the registration) without the prior written consent of
the Company or such underwriters, as the case may be, for such period of time
(not to exceed one hundred eighty (180) days) from the effective date of such
-4-
<PAGE>
registration as may be requested by the underwriters and (ii) further agrees to
execute any agreement reflecting (i) above as may be requested by the
underwriters at the time of the public offering.
8. Legends. The share certificate evidencing the Shares issued hereunder
shall be endorsed with the following legends:
(a) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS
THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT
SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
(b) Any legend required to be placed thereon by the California
Commissioner of Corporations or any other applicable state securities laws.
9. Adjustment for Stock Split. All references to the number of Shares and
the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
10. General Provisions.
(a) This Agreement shall be governed by the internal laws of the State
of California. This Agreement represents the entire agreement between the
parties with respect to the purchase of Common Stock by Bioject and supersedes
any prior agreement written or oral with respect to the purchase of Common Stock
by Bioject and satisfies all of the Company's obligations to Bioject with regard
to the issuance or sale of securities. This Agreement may only be modified or
amended in writing signed by both parties.
(b) Any notice, demand or request required or permitted to be given by
either the Company or Bioject pursuant to the terms of this Agreement shall be
in writing and shall be deemed given when delivered personally or deposited in
the U.S. mail, First Class with postage prepaid, and addressed to the parties at
the addresses of the parties set forth at the end of this Agreement or such
other address as a party may request by notifying the other in writing.
(c) The rights and benefits of the Company under this Agreement shall
be transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and
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obligations of Bioject under this Agreement may only be assigned with the prior
written consent of the Company.
(d) Either party's failure to enforce any provision or provisions of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions, nor prevent that party thereafter from enforcing each
and every other provision of this Agreement. The rights granted both parties
herein are cumulative and shall not constitute a waiver of either party's right
to assert all other legal remedies available to it under the circumstances.
(e) Bioject agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.
(f) Bioject understands that it (and not the Company) shall be
responsible for its own federal, state, local or foreign tax liability and any
of its other tax consequences that may arise as a result of the transactions
contemplated by this Agreement. Bioject shall rely solely on the determinations
of its tax advisors or its own determinations, and not on any statements or
representations by the Company or any of its agents, with regard to all such tax
matters.
(g) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first set forth above.
ANGIOSENSE, INC. BIOJECT, INC.
a Delaware corporation an Oregon corporation
By: ------------------------------- By: -------------------------------
Title: ---------------------------- Title: -------------------------------
- ----------------------------------- -----------------------------------
(Address) (Address)
- ----------------------------------- -----------------------------------
<PAGE>
EXHIBIT A
RIGHTS AGREEMENT
This Rights Agreement ("Agreement") is entered into as of September 21st,
1999 by and between AngioSense, Inc., a Delaware corporation (the "Company") and
Bioject, Inc., an Oregon corporation ("Bioject").
WHEREAS, Bioject and the Company are entering into (i) an Exclusive License
Agreement (referred to as "Agreement I") and, (ii) a Development and Supply
Agreement (referred to as "Agreement II"), both of even date herewith (such
agreements together, the "IP Agreements");
WHEREAS, Bioject and the Company are entering into a total of two (2) stock
purchase agreements of even date with this Agreement (the "Purchase Agreements")
in connection with and concurrently with the execution of the IP Agreements; and
WHEREAS, to induce Bioject to enter into the IP Agreements and the Purchase
Agreements, the Company and Bioject have agreed to enter into this Agreement to
provide for certain rights, privileges and preferences in favor of Bioject.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties agree as follows:
1. Certain Definitions. All terms not otherwise defined in this Agreement
shall have the meaning defined in the Stock Purchase Agreements. As used in this
Agreement, the following terms shall have the following respective meanings:
1.1 "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.2 "Holder" shall mean Bioject and any person holding Shares to whom
the rights under this Agreement have been transferred in accordance with Section
3.7 hereof.
1.3 "Registrable Securities" means Common Stock of the Company issued
pursuant to the Purchase Agreements or other securities convertible into or
exercisable for Common Stock upon any stock split, stock dividend,
recapitalization, or similar event, provided, however, that shares of Common
Stock or other securities shall only be treated as Registrable Securities for
the purposes of this Agreement (A) if and so long as they have not been sold to
or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, or (B) prior to the date such securities have
been sold or are all available for immediate sale in the opinion of counsel to
the Company in a transaction exempt from the prospectus delivery requirements of
the Securities Act so that all transfer restrictions and legends with respect
thereto are removed upon the consummation of such sale. 1.4
<PAGE>
1.4 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.
1.5 "Registration Expenses" shall mean all expenses, except as
otherwise stated below, incurred by the Company in complying with Section 3.1
hereof, including, without limitation, all registration, qualification and
filing 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 (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).
1.6 "Restricted Securities" shall mean the securities of the Company
required to bear the legend set forth in Section 2.2 hereof.
1.7 "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.
1.8 "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes and costs of special counsel to the
Holders, if any, applicable to the securities registered by the Holders.
2. Transferability.
2.1 Restrictions on Transferability. The Shares shall not be sold,
assigned, transferred or pledged except upon the conditions specified in this
Section 2, which conditions are intended to ensure compliance with the
provisions of the Securities Act. Bioject will cause any proposed purchaser,
assignee, transferee, or pledgee of the Shares held by Bioject to agree to take
and hold such securities subject to the provisions and upon the conditions
specified in this Section 2.
2.2 Restrictive Legend. Each certificate representing (i) the Shares
and (ii) any other securities issued in respect of the Shares upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar event,
shall (unless otherwise permitted by the provisions of Section 2.3 below) be
stamped or otherwise imprinted with a legend in the following form (in addition
to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS
THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT
SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO
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THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION.
Bioject consents to the Company making a notation on its records and giving
instructions to any transfer agent of the Shares in order to implement the
restrictions on transfer established in this Section 2.
2.3 Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 2.3. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than (i) a
transfer not involving a change in beneficial ownership, or (ii) a transfer to
an affiliated fund, partnership or company, which is not a competitor of the
Company, subject to compliance with applicable securities laws, or (iii)
transfers in compliance with Rule 144, so long as the Company is furnished with
satisfactory evidence of compliance with such Rule), unless there is in effect a
registration statement under the Securities Act covering the proposed transfer,
the holder thereof shall give written notice to the Company of such holder's
intention to effect such transfer, sale, assignment or pledge. Each such notice
shall describe the manner and circumstances of the proposed transfer, sale,
assignment or pledge in sufficient detail, and shall be accompanied, at such
holder's expense by either (i) an unqualified written opinion of legal counsel
who shall, and whose legal opinion shall, be reasonably satisfactory to the
Company, which opinion shall be addressed to the Company and which opinion shall
be to the effect that the proposed transfer of the Restricted Securities may be
effected without registration under the Securities Act, or (ii) a "no action"
letter from the Commission to the effect that the transfer of such securities
without registration will not result in a recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the holder of
such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by the holder to
the Company. Each certificate evidencing the Restricted Securities transferred
as above provided shall bear, except if such transfer is made pursuant to Rule
144, the appropriate restrictive legend set forth in Section 2.2 above, except
that such certificate shall not bear such restrictive legend if in the opinion
of counsel for such holder and in the reasonable opinion of the Company such
legend is not required in order to establish compliance with any provision of
the Securities Act.
2.4 Removal of Restrictions on Transfer of Securities. Any legend
referred to in Section 2.2 hereof stamped on a certificate evidencing (i) the
Shares, (ii) any other securities issued in respect of the Shares upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar event
and the stock transfer instructions and record notations with respect to such
security shall be removed and the Company shall issue a certificate without such
legend to the holder of such security if such security is registered under the
Securities Act, or if such holder provides the Company with an opinion of
counsel (which may be counsel for the Company) reasonably acceptable to the
Company to the effect that a public sale or transfer of such security may be
made without registration under the Securities Act or (iii) such holder provides
the Company with reasonable assurances, which may, at the option of the Company,
include an opinion of counsel satisfactory to the Company, that such security
can be sold pursuant to Section (k) of Rule 144 under the Securities Act.
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<PAGE>
3. Registration Rights.
3.1 Company Registration.
(a) Notice of Registration. If at any time or from time to time
the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, (ii) a registration
relating solely to a Commission Rule 145 transaction or (iii) a registration
relating to the initial underwritten public offering of the Company's securities
pursuant to a registration statement filed under the Securities Act:
(i) promptly give to each Holder written notice thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 10 days after receipt of such written notice from the
Company, by any Holder.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.1(a)(i). In such event the right of any Holder to
registration pursuant to this Section 3.1 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 3.1, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities and other securities to be distributed through such
underwriting to (i) in the case of the first underwritten public offering of the
securities of the Company, any amount or no amount, as the managing underwriter
may determine, or (ii) in the case of any registration subsequent to the first
underwritten public offering of the securities of the Company, to not less than
thirty three percent (33%) of the total securities covered by the registration.
The Company shall so advise all Holders distributing their securities through
such underwriting of such limitation and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders at the time of
filing the registration statement. To facilitate the allocation of shares in
accordance with the above provisions, the Company may round the number of shares
allocated to any Holder or holder to the nearest 100 shares. If any Holder or
holder disapproves of the terms of any such underwriting, such Holder or holder
may elect to withdraw therefrom by written notice to the Company and the
managing underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 90 days after the effective date
of the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
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(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 3.1 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 3.2 hereof.
3.2 Expenses of Registration. All Registration Expenses incurred in
connection with registrations pursuant to Section 3.1 shall be borne by the
Company. All Selling Expenses relating to securities registered on behalf of the
Holders shall be borne by the holders of securities included in such
registration pro rata with the Company and among each other on the basis of the
number of shares so registered.
3.3 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 3,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the lesser of (i) one
hundred eighty (180) days and (ii) the time required to complete the
distribution described in the registration statement;
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders participating in such registration and
to the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities.
(d) Furnish, at the request of any Holder requesting registration
of Registrable Securities that are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 3.3, (i) an opinion,
dated such date, of the counsel representing the Company for the purposes of
such registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
to the Holders requesting registration of Registrable Securities and (ii) a
letter dated such date, from the independent accountants of the Company, in form
and substance as is customarily given by independent accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
to the Holders requesting registration of Registrable Securities.
3.4 Indemnification.
(a) The Company will indemnify each Holder, each of its officers,
directors, partners and legal counsel, and each person controlling such Holder
within the meaning of
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Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Section 3, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each such Holder,
each of its officers, directors, partners, and legal counsel and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder, controlling person or underwriter and stated to be specifically for use
therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors, officers, and legal counsel, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other Holder, each of its officers, directors, partners
and legal counsel and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of each Holder under this
subsection (b) shall be limited in an amount equal to the proceeds to each such
Holder of Registrable Securities sold as contemplated herein, unless such
liability resulted from willful misconduct by such Holder. A Holder will not be
required to enter into any agreement or undertaking in connection with any
registration under this Section 3 providing for
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any indemnification or contribution on the part of such Holder greater than the
Holder's obligations under this Section 3.4(b).
(c) Each party entitled to indemnification under this Section 3.4
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 3 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate and
different defenses but shall bear the expense of such defense nevertheless. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.
3.5 Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 3.
3.6 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Securities Exchange Act of 1934, as
amended.
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended (at any time
after it has become subject to such reporting requirements);
(c) So long as a Purchaser owns any Restricted Securities to
furnish to the Purchaser forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public),
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and of the Securities Act and the Securities Exchange Act of 1934 (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as a Purchaser may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Purchaser
to sell any such securities without registration.
3.7 Transfer of Registration Rights. The rights to cause the Company
to register securities granted Holders under Section 3.1 may be assigned to a
transferee or assignee in connection with any transfer or assignment of
Registrable Securities by a Holder of not less than 138,611 shares of
Registrable Securities, or to any transferee or assignee who is a constituent
partner of a Holder or the estate of such constituent partner, provided that
such transfer may otherwise be effected in accordance with applicable securities
laws.
3.8 Standoff Agreement. Each Holder agrees, provided that the officers
and directors of the Company agree to be bound by terms substantially identical
to those contained in this Section 3.8, in connection with the Company's initial
public offering of the Company's securities, upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities, (i)
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any Registrable Securities (other than those included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days) from the effective date of such registration as may
be requested by the underwriters and (ii) further agrees to execute any
agreement reflecting (i) above as may be requested by the underwriters at the
time of the public offering.
3.9 Termination of Registration Rights. The rights granted under this
Section 3 shall terminate on the third anniversary of the consummation of the
initial underwritten public offering of the Company's securities pursuant to a
registration statement filed under the Securities Act.
4. Bioject's Right of First Refusal.
4.1 Right of First Refusal Upon Issuances of Securities by the
Company.
(a) The Company hereby grants, on the terms set forth in this
Section 4.1, to Bioject the right of first refusal to purchase all or any part
of Bioject's pro rata share of the New Securities (as defined in Section 4.1(b))
which the Company may, from time to time, propose to sell and issue. Bioject may
purchase said New Securities on the same terms and at the same price at which
the Company proposes to sell the New Securities. The pro rata share of Bioject
("Bioject's Pro Rata Share"), for purposes of this right of first refusal, is
(except as set forth in paragraph 4.1(e) below) the ratio of the total number of
shares of Common Stock held by Bioject, to the total number of shares of Common
Stock outstanding immediately prior to the issuance of the New Securities
(including any shares of Common Stock into which any outstanding shares of
Preferred Stock are convertible).
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(b) "New Securities" shall mean any capital stock of the Company,
whether now authorized or not, and any rights, options or warrants to purchase
said capital stock, and securities of any type whatsoever that are, or may
become, convertible into said capital stock; provided that "New Securities" does
not include (i) currently outstanding securities, (ii) securities issuable upon
conversion or exercise of or with respect to outstanding options or convertible
securities, (iii) securities offered pursuant to a registration statement filed
under the Securities Act, (iv) securities issued pursuant to the acquisition of
another corporation by the Company by merger, purchase of substantially all of
the assets or other reorganization, (v) all shares of Common Stock or other
securities hereafter issued or issuable to officers, directors, employees,
scientific advisors or consultants of the Company pursuant to any employee or
consultant stock offering, plan, arrangement or agreement approved by the Board
of Directors of the Company, (vi) all shares of Common Stock or other securities
hereafter approved for issuance by the Company's board of directors and issued
at fair market value (as determined in good faith by the Company's board of
directors) in connection with or as consideration for acquisition or licensing
of technology, (vii) all shares of Common Stock or other securities approved for
issuance by the Company's board of directors and issued at fair market value (as
determined in good faith by the Company's board of directors) in connection with
equipment leasing or equipment financing arrangements, (viii) up to 2,000,000
shares of Series B Preferred Stock which may be issued from time to time by the
Company.
(c) In the event the Company proposes to undertake an issuance of
New Securities, it shall give to Bioject written notice (the "Notice") of its
intention, describing the type of New Securities, the price, the terms upon
which the Company proposes to issue the same, and a statement as to the number
of days from receipt of such Notice within which Bioject must respond to such
Notice. Bioject shall have thirty (30) days from the date of receipt of the
Notice to purchase any or all of Bioject's Pro Rata Share of the New Securities
for the price and upon the terms specified in the Notice by giving written
notice to the Company and stating therein the quantity of New Securities to be
purchased and forwarding payment for such New Securities to the Company if
immediate payment is required by such terms, or in any event no later than
thirty (30) days after the date of receipt of the Notice.
(d) In the event Bioject fails to exercise in full the right of
first refusal within said thirty (30) day period, the Company shall have ninety
(90) days thereafter to sell or enter into an agreement (pursuant to which the
sale of New Securities covered thereby shall be closed, if at all, within thirty
(30) days from date of said agreement) to sell the New Securities and any
portion of Bioject's Pro Rata Share of New Securities respecting which Bioject's
rights were not exercised, at a price and upon general terms no more favorable
to the investors thereof than specified in the Notice. In the event the Company
has not sold the New Securities within said ninety (90) day period (or sold and
issued New Securities in accordance with the foregoing within thirty (30) days
from the date of said agreement), the Company shall not thereafter issue or sell
any New Securities without first offering such securities to Bioject in the
manner provided above.
(e) The right of first refusal granted under this Section 4.1
shall expire upon:
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(i) The date upon which a registration statement filed by
the Company under the Securities Act (other than a registration of securities in
a Rule 145 transaction or with respect to an employee benefit plan) in
connection with an underwritten public offering of its securities first becomes
effective and the securities registered thereunder are sold.
(ii) The date on which Bioject no longer holds a minimum of
138,611 Shares.
(f) The right of first refusal granted under this Section 4.1 is
not assignable with respect to blocks of less than 138,611 shares.
5. General Provisions.
5.1 Amendment and Waiver. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Shares. Any amendment or waiver effected in accordance with this Section 5.1
shall be binding upon each holder of any Shares at the time outstanding, each
future holder of all such securities and the Company.
5.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California.
5.3 Successors and Assigns. Except as otherwise expressly provided,
the provisions of this Agreement shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties.
5.4 Severability. In case any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be unenforceable, this
Agreement shall continue in full force and effect without said provision;
provided, however, that no such severability shall be effective if it materially
changes the economic benefit of this Agreement to any party.
5.5 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery or upon deposit with the United States Post Office, by
first class mail, postage prepaid, addressed: (a) if to Bioject, at its current
address or at such other address as Bioject shall have furnished to the Company
in writing, or (b) if to the Company, at its current address or at such other
address as the Company shall have furnished to Bioject in writing.
5.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which is an original, and all of which together shall
constitute one instrument.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
ANGIOSENSE, INC. BIOJECT, INC.
a Delaware corporation an Oregon corporation
By: ------------------------------- By: -------------------------------
Title: ---------------------------- Title: -------------------------------
- ----------------------------------- -----------------------------------
(Address) (Address)
- ----------------------------------- -----------------------------------
<PAGE>
EXHIBIT B
SCHEDULE OF EXCEPTIONS
This Schedule of Exceptions is made and given pursuant to Section 6 of the
AngioSense, Inc. Stock Purchase Agreement dated September 21st, 1999 (the
"Agreement") by and between AngioSense, Inc., a Delaware corporation (the
"Company") and Bioject, Inc., an Oregon corporation ("Bioject"). The paragraph
numbers in this Schedule of Exceptions correspond to the paragraph numbers in
the Agreement which are modified by the disclosures made herein; however, any
information disclosed herein under any paragraph number shall be deemed to be
disclosed and incorporated into any other paragraph number under the Agreement
where such disclosure would be appropriate. Any terms used herein which are
defined in the Agreement shall have the meanings described in the Agreement
unless the context otherwise requires.
6.3 Capitalization.
As of the date of and immediately prior to the execution of the Agreement,
the number of authorized and outstanding shares of each class and series of the
Company's capital stock is as follows:
<TABLE>
Authorized Outstanding
---------- -----------
<S> <C> <C>
Common Stock 20,000,000 2,990,000
Series A Preferred Stock 750,000 750,000
Series B Preferred Stock 2,000,000 107,500
</TABLE>
The Company has adopted a 1999 Stock Plan (the "Plan") and has reserved an
aggregate of 1,000,000 shares of its Common Stock for issuance under the Plan to
employees, directors and consultants. No options or other rights to purchase
shares under the Plan are currently outstanding and all 1,000,000 shares are
available for grant under the Plan.
