As filed with the Securities and Exchange
Commission on March 20, 2000 Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BIOJECT MEDICAL TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Oregon 93-1099680
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation)
7620 SW Bridgeport Road
Portland, Oregon 97224
(503) 639-7221
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
James C. O'Shea
Chief Executive Officer
Bioject Medical Technologies Inc.
7620 SW Bridgeport Road
Portland, Oregon 97224
(503) 639-7221
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With Copies to:
Christopher J. Barry
Dorsey & Whitney LLP
1420 Fifth Avenue
Seattle, Washington 98006
(206) 903-8800
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<TABLE>
CALCULATION OF REGISTRATION FEE
Title of securities Amount to be Proposed maximum offering Proposed maximum aggregate Amount of
to be registered registered(1) price per share(2) offering price(2) registration fee
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<S> <C> <C> <C> <C>
Common Stock, no par value 65,796 $12.375 $814,226 $215
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
registration statement also covers such indeterminate number of shares of common
stock as may be required to prevent dilution resulting from stock splits, stock
dividends or similar events, or changes in the exercise price of the warrants.
(2) Estimated solely for purposes of computing the registration fee and based
upon the average of the high and low sale prices for the common stock on March
17, 2000, as reported on the Nasdaq SmallCap Market.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
Subject to completion, dated March 20, 2000
PROSPECTUS
65,796 Shares
BIOJECT MEDICAL TECHNOLGIES INC.
Common Stock
Shares of common stock of Bioject Medical Technologies Inc. are being
offered by this Prospectus. The shares will be sold from time to time by the
selling Shareholders named in this Prospectus. We will not receive any of the
proceeds from the sale of the shares.
Our common stock is traded on the Nasdaq SmallCap Market under the symbol
"BJCT." On March 17, 2000, the last sale price of our common stock as reported
on the Nasdaq SmallCap Market was $12.8125 per share.
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Investment in the common stock involves a high degree of risk. See section
titled "Risk Factors" beginning on page 7 to read about certain factors you
should consider before buying shares of common stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The information in this Prospectus is not complete and may be changed. The
Selling Shareholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is declared
effective. This Prospectus is not an offer to sell these securities, and it is
not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
The date of this Prospectus is _______________, 2000.
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TABLE OF CONTENTS
About This Prospectus.................................................2
Where You Can Find More Information...................................3
About Bioject Medical Technologies Inc. ..............................4
Forward-Looking Statements............................................7
Risk Factors..........................................................7
Use of Proceeds......................................................13
Selling Shareholders.................................................13
Plan of Distribution.................................................14
Legal Matters........................................................14
Experts..............................................................14
ABOUT THIS PROSPECTUS
This Prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "SEC"). The Prospectus relates to 65,796
shares (the "Shares") of our common stock which the Selling Shareholders named
in this Prospectus (the "Selling Shareholders") may sell from time to time. We
will not receive any of the proceeds from these sales. We have agreed to pay the
expenses incurred in registering the Shares, including legal and accounting
fees.
The Shares have not been registered under the securities laws of any state
or other jurisdiction as of the date of this Prospectus. Brokers or dealers
should confirm the existence of an exemption from registration or effectuate
such registration in connection with any offer and sale of the Shares.
This Prospectus describes certain risk factors that you should consider
before purchasing the Shares. See "Risk Factors" beginning on page 7. You should
read this Prospectus together with the additional information described under
the heading "Where You Can Find More Information."
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WHERE YOU CAN FIND MORE INFORMATION
Federal securities law requires us to file information with the SEC
concerning our business and operations. We file annual, quarterly and special
reports, proxy statements and other information with the SEC. You can read and
copy these documents at the public reference facility maintained by the SEC at
Judiciary Plaza, 450 Fifth Street, NW, Room 1024, Washington, DC 20549. You can
also copy and inspect such reports, proxy statements and other information at
the following regional offices of the SEC:
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New York Regional Office Chicago Regional Office
Seven World Trade Center Citicorp Center
Suite 1300 500 West Madison Street, Suite 1400
New York, NY 10048 Chicago, Illinois 60661
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Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public on the SEC's
web site at http://www.sec.gov. You can also inspect our reports, proxy
statements and other information at the offices of the Nasdaq Stock Market.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information that we incorporate by
reference is considered to be part of this Prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"):
1. Our Annual Report on Form 10-K for the year ended March 31, 1999.
2. Our Quarterly Reports on Form 10-Q for the periods ended June 30, 1999,
September 30, 1999 (and as amended on January 14, 2000 and March 15, 2000)
and December 31, 1999 (as amended on March 15, 2000 and March 17, 2000).
3. The Definitive Proxy Statement for the Annual Meeting of Bioject on
Schedule 14A, dated August 12, 1999.
4. Our Current Reports on Form 8-K filed on April 20, 1999, June 29, 1999,
July 13, 1999 and March 3, 2000.
5. The description of our Common Stock contained in our registration statement
under Section 12 of the Exchange Act, dated January 29, 1987, and any
amendment or report updating such description, including without
limitation, Amendment No. 1 thereto dated October 5, 1987, Amendment No. 2
thereto dated October 26, 1987, Amendment No. 3 thereto dated December 23,
1987, Amendment No. 4 thereto dated January 27, 1988 and Amendment No. 5
thereto dated February 9, 1988, our Current Reports on Form 8-K dated
December 17, 1992, November 29, 1995 and December 14, 1995.
This Prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-______). You may request a free copy of any of the above
filings by writing or calling:
Chris Farrell
Secretary
7620 SW Bridgeport Road
Portland, Oregon 97224
(503) 639-7221
You should rely only on the information incorporated by reference or
provided in this Prospectus or any supplement to this Prospectus. We have not
authorized anyone else to provide you with different information. The Selling
Shareholders should not make an offer of these Shares in any state where the
offer is not permitted. You should not assume that the information in this
Prospectus or any supplement to this Prospectus is accurate as of any date other
than the date on the cover page of this Prospectus or any supplement.
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ABOUT BIOJECT MEDICAL TECHNOLOGIES INC.
We develop, manufacture and market jet injection systems for needle-free drug
delivery. We sell our products directly to healthcare providers. We also license
our technology to leading pharmaceutical and biotechnology companies for whose
products our technology provides increased medical efficacy or enhanced market
acceptance.
Our needle-free operations are conducted by Bioject Inc., an Oregon corporation,
which is our wholly owned subsidiary. Bioject Inc. commenced operations in 1985.
Bioject Medical Technologies Inc. was formed in December 1992 for the sole
purpose of acquiring all the capital stock of Bioject Medical Systems Ltd., a
company organized under the laws of British Columbia, Canada, in a
stock-for-stock exchange. This stock acquisition established Bioject Medical
Technologies Inc., a U.S. domestic corporation, as the publicly-traded parent
company of Bioject Inc. and Bioject Medical Systems Ltd. Bioject Medical Systems
Ltd. was then terminated in fiscal 1997. Our blood glucose monitoring
development operations were conducted by Marathon Medical Technologies Inc.
("Marathon Medical") (formerly Bioject JV Subsidiary Inc.), an Oregon
corporation, which is our wholly owned subsidiary. The blood glucose monitoring
development operation was discontinued in June 1999. All references to Bioject
are to Bioject Medical Technologies Inc. and its subsidiaries, unless the
context requires otherwise. Bioject's executive offices and operations are
located at 7620 SW Bridgeport Road, Portland, Oregon 97224, and our telephone
number is (503) 639-7221.
We manufacture and market a professional needle-free injection system, the
Biojector(R) 2000, which allows healthcare professionals to inject medications
through the skin, both intramuscularly and subcutaneously, without a needle.
Using this technology to administer injections virtually eliminates the risk of
contaminated needlestick injuries and the resulting blood-borne pathogen
transmission, which is a major concern throughout the healthcare industry. The
Biojector 2000 system consists of two components: a handheld, reusable
jet-injector (the "Biojector 2000" or "B-2000") and a sterile, single-use
disposable syringe (the "Biojector syringe"). We also manufacture and market a
device that allows the Biojector syringe to be filled without a needle (the
"Vial Adapter"). The Vial Adapter may be purchased either separately or as a
pre-packaged component of the B-2000 system. The B-2000 system is capable of
delivering needle-free injections in varying doses up to 1 ml. We has also
developed the B-2020 and B-4000 jet-injection systems. The B-2020 system is
similar in design and intended use to the B-2000 system except that it is
designed to deliver injections in varying doses up to 1.5 ml. The B-4000 system
is intended to be used by non-professionals to self-administer injections of
various medications in varying doses up to 1 ml. We have not yet received
regulatory clearance to begin selling either the B-2020 or the B-4000 systems.
We are also developing a single-use disposable and multi-use disposable
injector, the "Iject" intended to be used by both professionals and
non-professionals to either administer or self-administer medications up to 1
ml. We have not yet applied for regulatory clearance for this product.
We also market the Vitajet 3 (R) ("Vitajet"), a spring-powered, needle-free
self-injection device, the rights to which were acquired in a transaction with
Vitajet Corporation in March 1998. The Vitajet currently has regulatory
clearance for administering injections of insulin.
Our long-term goal is to establish our needle-free injection systems as the
preferred drug delivery method for all medications administered by intramuscular
or subcutaneous injection. Bioject focuses its current product sales efforts for
the Biojector 2000 system on: i) flu immunization clinics and providers; ii)
healthcare providers in states such as California, where legislation is in place
that favors alternatives to needle-syringes; iii) potentially high volume,
national accounts that will use or distribute Bioject's products across a large
region; and iv) the U.S. military. We are also focusing efforts to sell the
B-2000 to multiple sclerosis patients through a distributor.
We have established manufacturing capability for the Vitajet at our
manufacturing facility in Portland, Oregon, and plans to enter into agreements
with distributors to sell the Vitajet to insulin users. We are also developing
various marketing strategies to sell the Vitajet directly to end-users.
We are actively pursuing strategic partnering relationships with a number of
pharmaceutical and biotechnology companies under which we plan to grant
specified rights or licenses to some or all of our products. The strategy
anticipates that the rights or licenses will allow strategic partners to i) use
the licensed products for specific applications or purposes or ii) market the
licensed products in conjunction with certain of their products.
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Under a January 1995, agreement with Hoffman LaRoche Inc. ("Roche") Bioject
agreed to develop a needle-free injection system for Roche to use with certain
of its products. The B-2020 system was designed as a result of this agreement.
Bioject and Roche intended that Roche would be granted worldwide rights to
distribute the B-2020 for a specific class of medications. In June 1999, Roche
advised us that because of the additional time and cost required to gain
regulatory clearance to use the B-2020 in conjunction with the Roche drugs and
because of an overall change in its marketing strategy for the drugs in
question, it did not intend to pursue distributing the B-2020 and is
relinquishing its exclusive rights to the product.
In September 1997, we entered into a joint venture agreement with Elan
Corporation plc. for the development and commercialization of certain blood
glucose monitoring technology which we licensed from Elan. In May 1999, rather
than continue to fund the cost of its development, we entered into negotiations
to sell Marathon's blood glucose monitoring technology, and certain fixed assets
related to developing the technology, to a third party. The sale was completed
on June 30, 1999. The gross proceeds from the sale were $4 million. The gain
realized on the sale was approximately $2.9 million, net of associated expenses
of the transaction and a $500,000 provision for expenses to wind-up Marathon's
operations.
The terms of the sale of the blood glucose monitoring technology also provide
for Bioject to receive a royalty on net sales of future products, if any, which
may be developed in the future from the licensed technology. The agreement calls
for a royalty of three percent of net sales until Bioject has received total
royalty payments of $10 million. The agreement then calls for royalty payments
of one percent of net sales thereafter. There can be no assurance that future
products will be successfully developed from the blood glucose monitoring
technology or that such products, if developed, will be commercially successful.
In connection with the sale of the blood glucose monitoring technology, we
entered into an agreement with Elan to purchase its 19.9% common stock interest
in Marathon. We now own 100% of Marathon's stock.
In July 1998, we entered into an agreement with Merck & Co. which provided Merck
limited-term rights to use the B-2000 needle-free injection system with selected
Merck vaccines. As part of the agreement, Bioject also granted Merck exclusive
rights to negotiate a long-term license to the B-2000 for certain medical
indications. We received $1.5 million in non-refundable fees under this
agreement in the fiscal year ended March 31, 1999. In February 1999, citing a
refinement in its vaccine development strategy, Merck advised us that it would
not continue discussions to seek long-term license rights to our technology. No
further fees are due to us from Merck pursuant to the agreement.
In June 1999, we entered into a binding letter agreement with Amgen Inc. 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.
On February 29, 2000, we entered into a development and clinical supply
agreement with Amgen for the delivery of an Amgen product with our Iject(TM)
needle-free injection system. In connection with the agreement, Amgen made a
$1.5 million investment in Bioject's common stock.
In October 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 received an equity position of approximately
10 percent in AngioSense upon completion of certain product development
milestones. 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.
In December 1999, Bioject and Serono Laboratories, Inc., the U.S. affiliate of
Ares-Serono, S.A., a leading biotechnology company headquartered in Geneva,
Switzerland, announced an exclusive license agreement in the U.S. and Canada to
deliver Serono's Saizen(R) recombinant human growth hormone with a customized
version of Bioject's Vitajet(TM)3 needle-free delivery system. In connection
with the agreement, Serono paid an undisclosed license fee to Bioject and signed
a definitive supply agreement that commences upon FDA clearance. Clinical
studies evaluating the
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bioequivalence of Saizen(R)when delivered with the Bioject needle-free delivery
system have been completed. A 510(k) pre-market notification has been submitted
to the U.S. Food and Drug Administration (FDA).
A primary focus of our research efforts is on clinical research in the area of
DNA-based vaccines and medications. To the best of our knowledge, our jet
injection device is being used in two clinical studies relating to development
of DNA-based medications. Currently, to the best of our knowledge, our devices
are being used in more than twenty DNA-related clinical research projects both
within and outside of the United States. These research projects are being
conducted by companies leading the development of DNA-based medications as well
as by the leading universities and governmental institutions conducting research
in this area. Included in these studies are a Phase I clinical trial of a
DNA-based lymphoma vaccine being conducted at Stanford University and a Phase I
clinical trial of a DNA-based malaria vaccine being conducted at the U.S. Naval
Medical Research Center. Preliminary data from clinical studies with animals
indicates that the use of the Biojector technology may result in better
performance of some DNA-based medications than can be achieved through use of
conventional needle-syringes. There can be no assurance that further clinical
studies will prove conclusively that our technology is more effective in
delivering DNA-based medications than alternative delivery systems that are
currently available or that may be developed in the future.
In January 2000, we filed a resale registration statement on Form S-3, to
register 164,619 shares of our common stock for resale by selling shareholders.
The registration statement was declared effective on March 17, 2000. We will not
receive any proceeds from the sale of any of the shares sold by selling
shareholders.
In February 2000, we filed a resale registration statement on Form S-3, to
register 372,869 shares of our common stock for resale by selling shareholders.
The registration statement was declared effective on March 20, 2000. We will not
receive any proceeds from the sale of any of the shares sold by selling
shareholders.
In March 2000, we filed a resale registration statement on Form S-3, to register
the 65,796 shares of common stock issued to Amgen in connection with the license
and development agreement.
"Biojector," "Bioject," "Vitajet" and "Medivax" are registered trademarks of
Bioject.
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FORWARD-LOOKING STATEMENTS
Certain statements in this Registration Statement and the documents incorporated
by reference to this Registration Statement constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Any statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (often, but not always, using words or phrases
such as "expects" or "does not expect," "is expected," "anticipates" or "does
not anticipate," "plans," "estimates" or "intends," or stating that certain
actions, events or results "may," "could," "would," "might" or "will" be taken,
occur or be achieved) are not statements of historical fact and may be
"forward-looking statements." Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Bioject, or industry results, to be
materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and factors include, among others, those described under "Risk
Factors" and identified as risks or uncertainties in the documents incorporated
by reference.
RISK FACTORS
An investment in the Shares involves a high degree of risk. You should consider
carefully the following risk factors, together with the other information in
this Prospectus, before buying any Shares. You should also be aware that certain
statements contained in this Prospectus that are not related to historical
results are forward-looking statements. These forward-looking statements, such
as statements of our strategies, plans, objectives, expectations and intentions,
involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements.
If our products are not accepted by the market, our business could fail. Our
success will depend on market acceptance of our needle-free injection drug
delivery systems, the Biojector 2000 system and the Vitajet system and on market
acceptance of other products under development. If our products do not achieve
market acceptance, our business could fail. Currently, the dominant technology
used for intramuscular and subcutaneous injections is the hollow-needle syringe.
Needle-syringes, while low in cost, have limitations, particularly relating to
contaminated needlestick injuries. Use of the Biojector 2000 system for
intramuscular and subcutaneous injections eliminates the associated risk of
these injuries; however, the cost per injection is significantly higher. The
Biojector 2000, the Vitajet system or any of our products under development may
be unable to compete successfully with needle-syringes. A previous needle-free
injection system manufactured by us did not achieve market acceptance and is no
longer being marketed. The Biojector 2000 was introduced in January 1993.
Failure of the Biojector 2000 system to gain market acceptance would have a
material adverse effect on our financial condition and results of operations.
We have reduced our sales force and may be unable to penetrate targeted market
segments. In late fiscal 1998 and early fiscal 1999, we dramatically reduced our
direct product sales force from one national and five district sales managers to
one national sales manager who is focused on specifically targeted market
segments. This reduced sales force may not have sufficient resources to
adequately penetrate one or more of the targeted market segments. Further, if
the sales force is successful in penetrating one or more of the targeted market
segments, we are unable to assure you that our products will be accepted in
those segments or that product acceptance will result in product revenues which,
together with revenues from corporate licensing and supply agreements, will be
sufficient for us to operate profitably.
We may be unable to enter into Strategic Corporate Licensing and Supply
Agreements, which could cause our business to suffer. A key component of our
sales and marketing strategy is to enter into licensing and supply arrangements
with leading pharmaceutical and biotechnology companies whose products Bioject's
technology provides either increased medical effectiveness or a higher degree of
market acceptance. If we cannot enter into these agreements on terms favorable
to us or at all, our business may suffer. In January 1995, Bioject and Roche
entered into an agreement, whereby the parties anticipated that the product
development phase of the agreement would develop into a supply and distribution
agreement between Bioject and Roche. In June 1999, Roche advised us that due to
a longer and more costly than expected regulatory process to gain clearance to
use the B-2020 in conjunction with Roche's products, Roche had changed its
marketing strategy. In making that change in marketing strategy, Roche was
abandoning its exclusive distribution rights to the B-2020 and would not be
seeking a supply of the B-2020 from Bioject. In July 1998, Bioject and Merck &
Co. entered into an agreement, whereby the parties anticipated that the
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initial July 1998, agreement would lead to a long-term licensing and supply
agreement between the two companies. In February 1999, Merck & Co. advised us
that it would not continue, at the present time, to pursue exclusive license to
or supply of our products. Both of these agreements resulted in significant
short-term revenue. Neither agreement developed into the long-term revenue
stream anticipated by our strategic partnering strategy. We may be unable to
enter into future licensing or supply agreements with major pharmaceutical or
biotechnology companies. Even if we enter into these agreements, they may not
result in sustainable long-term revenues which, when combined with revenues from
product sales, could be sufficient for us to operate profitably.
An important component of our corporate licensing and supply agreement strategy
is specifically targeted at entering into agreements of this nature with
pharmaceutical and biotechnology companies developing DNA-based vaccines and
medications. The component of the strategy which focuses on companies developing
DNA-based therapies arises in great part from preliminary data from clinical
studies with animals which indicates that use of the Biojector technology may
result in better performance of some DNA-based medications than can be achieved
through the use of traditional needle-syringes. We cannot assure you that
further clinical studies will prove conclusively that our technology is more
effective in delivering DNA-based medications than alternative delivery systems
that are either currently available or that may be developed in the future.
Further, should our technology prove to be more effective in delivering
DNA-based medications, we may be unable to gain regulatory clearance to deliver
any DNA-based medications using our products. Further, even if intradermal
delivery of DNA-based medications is critical to effective delivery of those
compounds, we may be unable to gain regulatory clearance for intradermal
delivery of DNA-based medications with our products. In addition, there can be
no assurance that any company will be successful in developing one or more
DNA-based therapies or successful in bringing those therapies to market.
Further, should any companies be successful in developing and marketing
DNA-based therapies, we may be unable to enter into long-term license or supply
agreements with any such company, which could cause our financial condition and
results of operations to suffer.
We may never receive future royalties from the Blood Glucose Monitoring
Technology, which could cause our financial condition to suffer. In May 1999,
rather than continue to fund the cost of its development, we entered into
negotiations to sell Marathon's blood glucose monitoring technology, and certain
fixed assets related to developing the technology, to a third party. The sale
was completed on June 30, 1999. The terms of the sale of the blood glucose
monitoring technology provide for us to receive a royalty on net sales of future
products, if any, which may be developed in the future from the licensed
technology. The agreement calls for a royalty of three percent of net sales
until we have received total royalty payments of $10 million. The agreement then
calls for royalty payments of one percent of net sales thereafter. Future
products may never be successfully developed from the blood glucose monitoring
technology, and if products are developed, they may not be commercially
successful, which would mean that we would receive no future royalties and this
could cause our financial condition to suffer.
We have a history of losses and may never be profitable. Since our formation in
1985, we have incurred significant annual operating losses and negative cash
flow. At December 31, 1999, we had an accumulated deficit of $59 million. $47
million of the accumulated deficit relates to losses incurred in the needle-free
segment of our operations. $12 million of the accumulated deficit relates to
losses from our operations to develop the blood glucose monitoring technology.
We may never be profitable, which could have a negative effect on our stock
price. Historically, our revenues have been derived primarily from licensing and
technology fees and from limited product sales. The product sales were
principally sales to dealers in order to stock their inventories and to Homecare
Management, Inc. More recently, we have sold our products to end-users,
primarily to public health clinics for vaccinations and to nursing organizations
for flu immunizations. We have not attained profitability at these sales levels.
We may never be able to generate significant revenues or achieve profitability.
Because of these uncertainties at March 31, 1999, our independent public
accountants qualified their opinion with respect to our ability to continue as a
going concern.
We will need additional financing in the future, and if we cannot obtain the
necessary financing our business could fail. To date, our revenues from
operations have not been sufficient to meet our cash requirements. As a result,
since our inception in 1985, we have financed our operations, working capital
needs and capital expenditures primarily from private placements of securities,
exercises of stock options, proceeds received from our initial public offering
in 1986, proceeds received from a public offering of Common Stock in November
1993, licensing and technology revenues, equity investments from Elan, proceeds
from the sale of the glucose monitoring technology and more recently through
sales of products. We plan to fund our future cash requirements through
revenues, debt, and sales of equity securities. However, we may be unable to
obtain the financing sufficient to fund our business activities on favorable
terms or at all. Failure to obtain adequate financing would have a material
adverse impact on our business. In
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addition, sale of our equity securities on unfavorable terms to meet our
obligations could result in material dilution to the existing shareholders.
We have outstanding convertible preferred stock, which is convertible into
common stock at prices which may be lower than market price at the time of
conversion which could result in dilution to existing common stock holders. Our
Common Stock is subject to the rights and preferences of the Series A and C
Convertible Preferred Stock, which may be converted into common stock at prices
which may be lower than market price at the time of conversion causing
substantial dilution to existing holders of common stock. The Series A
Convertible Preferred Stock is convertible to Common Stock at a conversion price
of $7.50 per share. The Series C Preferred Stock is convertible to Common Stock
at a conversion price of $3.0625 per share. In October 2004, unless it is
converted earlier by the holders or redeemed by us, the shares of Series A and C
Convertible Preferred Stock and accrued but unpaid dividends convert
automatically into Common Stock.
We have limited manufacturing experience, and may be unable to produce our
products at the unit costs necessary for the products to be competitive in the
market, which could cause our financial condition to suffer. We have limited
experience manufacturing our products in commercially viable quantities. We have
increased our production capacity for the Biojector 2000 system through
automation of, and changes in, production methods, in order to achieve savings
through higher volumes of production. If we are unable to do so, then our
results of operations and financial condition could suffer. The current cost per
injection of the Biojector 2000 system is substantially higher than that of
traditional needle-syringes, our principal competition. A key element of our
business strategy has been to reduce the overall manufacturing cost through
automating production and packaging. This automation is substantially complete.
There can be no assurance that we will achieve sales and manufacturing volumes
necessary to realize cost savings from volume production at levels necessary to
result in significant unit manufacturing cost reductions. Failure to do so will
continue to make competing with needle-syringes on the basis of cost very
difficult and will adversely affect our financial condition and results of
operations. While we believe that our experience manufacturing the Biojector
enhances the probability of its success in manufacturing the Vitajet or other
devices we may develop, we have had limited experience manufacturing the Vitajet
and as of March 31, 1999, have only recently completed installing a
manufacturing line to produce the Vitajet. We may be unable to successfully
manufacture the Vitajet or other devices at a unit cost that will allow the
product to be sold profitably. Failure to do so would adversely affect our
financial condition and results of operations.
We are subject to extensive government regulation and must continue to comply
with these regulations or our business could suffer. Our products and
manufacturing operations are subject to extensive government regulation in both
the U.S. and abroad. If we cannot comply with these regulations, we may be
unable to distribute our products, which could cause our business to suffer or
fail. In the U.S., the development, manufacture, marketing and promotion of
medical devices are regulated by the Food and Drug Administration ("FDA") under
the Federal Food, Drug, and Cosmetic Act ("FD&C"). In 1987, we received
clearance from the FDA under Section 510(k) of the FD&C to market a hand-held
CO2-powered needle-free injection system. The FD&C provides that new premarket
notifications under Section 510(k) of the FD&C are required to be filed when,
among other things, there is a major change or modification in the intended use
of a device or a change or modification to a legally marketed device that could
significantly affect its safety or effectiveness. A device manufacturer is
expected to make the initial determination as to whether the change to its
device or its intended use is of a kind that would necessitate the filing of a
new 510(k) notification. Although the Biojector 2000 system incorporates changes
from the system with respect to which our 1987 510(k) marketing clearance was
received and expands its intended use, we made the determination that these were
not major changes or modifications in intended use or changes in the device that
could significantly affect the safety or effectiveness of the device.
Accordingly, we further concluded that the 1987 510(k) clearance permitted us to
market the Biojector 2000 system in the U.S. In June 1994, we received clearance
from the FDA under 510(k) to market a version of our Biojector 2000 system in a
configuration targeted at high volume injection applications. In October 1996,
we received 510(k) clearance for a needle-free disposable vial access device. In
March 1997, we received additional 510(k) clearance for certain enhancements to
our Biojector 2000 system. We currently have an application pending before the
FDA for 510(k) clearance for modification to the Vitajet 3 device. The FDA may
not concur with our determination that our current and future products can be
qualified by means of a 510(k) submission.
Future changes to manufacturing procedures could require that we file a new
510(k) notification. Also, future products, product enhancements or changes, or
changes in product use may require clearance under Section 510(k), or they may
require FDA premarket approval ("PMA") or other regulatory clearances. PMAs and
regulatory clearances other than
9
<PAGE>
510(k) clearance generally involve more extensive prefiling testing than a
510(k) clearance and a longer FDA review process. Under current FDA policy,
applications involving pre-filled syringes would be evaluated by the FDA as
drugs rather than devices, requiring FDA new drug applications ("NDAS") or
ANDAs. Depending on the circumstances, drug regulation can be much more
extensive and time consuming than device regulation.
FDA regulatory processes are time consuming and expensive. Product applications
submitted by us may not be cleared or approved by the FDA. In addition, our
products must be manufactured in compliance with Good Manufacturing Practices
("GMP") as specified in regulations under the FDA Act. The FDA has broad
discretion in enforcing the FDA Act, and noncompliance with the Act could result
in a variety of regulatory actions ranging from product detentions, device
alerts or field corrections, to mandatory recalls, seizures, injunctive actions,
and civil or criminal penalties.
If we cannot meet international product standards, we will be unable to
distribute our products outside of the United States which could cause our
business to suffer. Distribution of our products in countries other than the
U.S. may be subject to regulation in those countries. Failure to satisfy these
regulations would impact our ability to sell our products in these countries and
could cause our business to suffer. In June 1998, we received certification from
TUV Product Services for our quality system, which meets the requirements of ISO
9001 and EN 46001. In June 1999, TUV Product Services audited our quality system
and found that it still meets the requirements of ISO 9001. In November 1999, we
received certification from TUV Product Services for the applicable requirements
of EC-Directive 93/42/EEC Annex. II.3 Medical Device Directive. This
certification allows us to label our products with the CE Mark and sell them in
the European Community. We may be unable to continue to meet the standards of
ISO 9001 or CE Mark certification.
If the healthcare industry limits coverage or reimbursement levels, the
acceptance of our products could suffer. The price of our products exceeds the
price of needle-syringes and if coverage or reimbursement levels are reduced,
market acceptance of our products could be harmed. The healthcare industry is
subject to changing political, economic and regulatory influences that may
affect the procurement practices and operations of healthcare facilities. During
the past several years, the healthcare industry has been subject to increased
government regulation of reimbursement rates and capital expenditures. Among
other things, third party payers are increasingly attempting to contain or
reduce healthcare costs by limiting both coverage and levels of reimbursement
for healthcare products and procedures. Because the price of the Biojector 2000
system exceeds the price of needle-syringe, cost control policies of third party
payers, including government agencies, may adversely affect acceptance and use
of the Biojector 2000 system.
We are highly dependent on third-party relationships, and our business could
suffer if we cannot maintain these relationships. We are dependent on third
parties for distribution of the Biojector 2000 system to certain market
segments, for the manufacture of component parts, and for assistance with the
development and distribution of future application-specific systems. If we
cannot maintain these relationships, or if the third parties are unable to
provide the services we require, our business could suffer.
Our current manufacturing processes for the Biojector 2000 jet injector and
disposable syringes as well as manufacturing processes to produce the Vitajet
consist primarily of assembling component parts supplied by outside suppliers.
Some of these components are currently obtained from single sources, with some
components requiring significant production lead times. In the past, we have
experienced delays in the delivery of certain components. To date such delays
have not had a material adverse effect on our operations. We may experience
delays in the future, and these delays could have a material adverse effect on
our financial condition and results of operations.
In the past, we have entered into agreements with certain major pharmaceutical
or biotechnology companies for development and distribution of needle-free
injection systems and for use of our needle-free injection systems in
conjunction with the pharmaceutical companies' products. In all cases to date
these companies have had the right to terminate those agreements at certain
phases as defined in the agreements. In several instances, those agreements have
been terminated before yielding sustained long-term licensing or product sales
revenues. Entering into agreements of this nature is an important part of our
overall business strategy. We may be unable to interest any major pharmaceutical
or biotechnology companies in entering into such agreements. If interested
parties are found, we may be unsuccessful at negotiating and entering into
long-term licensing and supply agreements with the interested parties. Further,
if such agreements are entered into, there can be no assurance that the
companies' interest and participation in the agreements and projects will
continue and result in long-term, sustainable revenues as contemplated by this
aspect of our overall business strategy. Failure to enter into future licensing
and product supply agreements with major pharmaceutical or
10
<PAGE>
biotechnology companies and failure of those future agreements to result in
significant, sustainable long-term revenues could adversely affect our financial
condition.
If we are unable to manage our growth, our results of operations could suffer.
If our products achieve market acceptance or if we are successful in entering
into product supply agreements with major pharmaceutical or biotechnology
companies, we expect to experience rapid growth. Such growth would require
expanded customer service and support, increased personnel, expanded operational
and financial systems, and implementing new and expanded control procedures. We
may be unable to attract sufficient qualified personnel or successfully manage
expanded operations. As we expand, we may periodically experience constraints
that would adversely affect our ability to satisfy customer demand in a timely
fashion. Failure to manage growth effectively could adversely affect our
financial condition and results of operations.
We may be unable to compete in the medical equipment field, which could cause
our business to fail. The medical equipment market is highly competitive and
competition is likely to intensify. If we cannot compete, our business will
fail. Our products compete primarily with traditional needle-syringes, "safety
syringes" and also with other alternative drug delivery systems. While we
believe our products provide a superior drug delivery method, there can be no
assurance that we will be able to compete successfully with existing or newly
developed drug delivery products. Many of our competitors have longer operating
histories as well as substantially greater financial, technical, marketing and
customer support resources. One or more of these competitors may develop an
alternative drug delivery system that competes more directly with our products,
and our products may be unable to compete successfully with such a product.
We are dependent on a single technology, and if it cannot compete or find market
acceptance, our business will suffer. Our strategy has been to focus our
development and marketing efforts on our needle-free injection technology. Focus
on this single technology leaves us vulnerable to competing products and
alternative drug delivery systems. If our technology cannot find market
acceptance or cannot compete against other technologies, business will suffer.
We perceive that healthcare providers' desire to minimize the use of the
traditional needle-syringe has stimulated development of a variety of
alternative drug delivery systems such as "safety syringes," jet injection
systems, nasal delivery systems and transdermal diffusion "patches". In
addition, pharmaceutical companies frequently attempt to develop drugs for oral
delivery instead of injection. While we believe that for the foreseeable future
there will continue be a significant need for injections, alternative drug
delivery methods may be developed which are preferable to injection.
We rely on patents and proprietary rights to protect our proprietary technology.
We rely on a combination of trade secrets, confidentiality agreements and
procedures, and patents to protect our proprietary technologies. We have been
granted a number of patents in the United States and several patents in other
countries covering certain technology embodied in our current jet injection
system and certain manufacturing processes. Additional patent applications are
pending in the U.S. and certain foreign countries. The claims contained in any
patent application may not be allowed, or any patent or our patents collectively
will not provide adequate protection for our products and technology. In the
absence of patent protection, we may be vulnerable to competitors who attempt to
copy our products or gain access to our trade secrets and know-how. In addition,
the laws of foreign countries may not protect our proprietary rights to this
technology to the same extent as the laws of the U.S. We believe we have
independently developed our technology and attempt to ensure that our products
do not infringe the proprietary rights of others. We know of no such
infringement claims. However, any claims could have a material adverse affect on
our financial condition and results of operations.
If our products fail or cause harm, we could be subject to substantial product
liability, which could cause our business to suffer. Producers of medical
devices may face substantial liability for damages in the event of product
failure or if it is alleged the product caused harm. We currently maintain
product liability insurance and, to date, have experienced only one product
liability claim. There can be no assurance, however, that we will not be subject
to a number of such claims, that our product liability insurance would cover
such claims, or that adequate insurance will continue to be available to us on
acceptable terms in the future. Our business could be adversely affected by
product liability claims or by the cost of insuring against such claims.
We are highly dependent on our key employees, and our business could suffer if
they were to leave. Our success depends on the retention of our executive
officers and other key employees. Competition exists for qualified personnel
11
<PAGE>
and our success will depend, in part, on attracting and retaining qualified
personnel. Failure in these efforts could have a material adverse effect on our
business, financial condition or results of operations.
There are a large number of shares eligible for sale into the public market in
the near future, which may reduce the price of our common stock. The market
price of our common stock could decline as a result of sales of a large number
of shares of our common stock in the market, or the perception that such sales
could occur. We have a large number of shares of common stock outstanding and
available for resale beginning at various points in time in the future. These
sales also might make it more difficult for us to sell equity securities in the
future at a time and at a price that we deem appropriate. The shares of our
common stock currently outstanding will become eligible for sale without
registration pursuant to Rule 144 under the Securities Act, subject to certain
conditions of Rule 144. Certain holders of our common stock also have certain
demand and piggyback registration rights enabling them to register their shares
under the Securities Act for sale. We have registered approximately 2.4 million
shares for resale on Form S-3 registration statements as well as approximately
1.53 million shares issuable upon exercise of warrants. In addition, we have
approximately 3.7 million shares of common stock reserved for issuance under our
stock option plan. As of December 31, 1999, options to purchase approximately
580,000 shares of common stock were outstanding and will be eligible for sale in
the public market from time to time subject to vesting. These stock options
generally have exercise prices significantly below the current price of our
common stock. The possible sale of a significant number of these shares may
cause the price of our common stock to fall.
We may be unable to maintain our listing on Nasdaq, which could cause our stock
price to fall and decrease the liquidity of our common stock. Our Common Stock
is quoted on the NASDAQ SmallCap Market. If we cannot comply with the continuing
requirements, we may be delisted which could cause the stock price to fall and
decrease the liquidity of our common stock for existing shareholders. There are
a number of continuing requirements that must be met in order for the Common
Stock to remain eligible for quotation on the NASDAQ National Market or the
NASDAQ SmallCap Market. The failure to meet the maintenance criteria in the
future could result in the delisting of our Common Stock from NASDAQ. In such
event, trading, if any, in the Common Stock may then continue to be conducted in
the non- NASDAQ over-the-counter market. As a result, an investor may find it
more difficult to dispose of or to obtain accurate quotations as to the market
value of our Common Stock. In addition, if the Common Stock were delisted from
trading on NASDAQ and the trading price of the Common Stock were less than $5.00
per share, trading in the Common Stock would also be subject to the requirements
of certain rules promulgated under the Exchange Act, which require additional
disclosure by broker-dealers in connection with any trades involving a stock
defined as a penny stock. The additional burdens imposed on broker-dealers may
discourage broker-dealers from effecting transactions in penny stocks, which
could reduce the liquidity of the shares of Common Stock and thereby have a
material adverse effect on the trading market for the securities.
On April 9,1999, we were advised by NASDAQ that we were out of compliance with
the NASDAQ rule that requires companies listed on the exchange to maintain a
minimum bid price of $1.00 for their stock. On July 9, 1999, the last sale price
of our common stock as reported on the NASDAQ National Market System was $0.50
per share. On October 13, 1999, a one-for-five reverse stock split was effected.
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 were reserved for issuance upon exercise of
outstanding options, warrants and the conversion of convertible preferred stock.
As of December 31, 1999, approximately 89.1 million shares are available for
future issuances.
Our stock price may be highly volatile, which increases the risk of securities
litigation. The market for our Common Stock and for the securities of other
early-stage, small market-capitalization companies has been highly volatile in
recent years. This increases the risk of securities litigation relating to such
volatility. We believe that factors such as quarter-to-quarter fluctuations in
financial results, reduction in the number of outstanding shares due to the
recent reverse stock split, new product introductions by us or our competition,
public announcements, changing regulatory environments, sales of Common Stock by
certain existing shareholders, substantial product orders and announcement of
licensing or product supply agreements with major pharmaceutical or
biotechnology companies could contribute to the volatility of the price of our
Common Stock, causing it to fluctuate dramatically. General economic trends such
as recessionary cycles and changing interest rates may also adversely affect the
market price of our Common Stock.
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<PAGE>
USE OF PROCEEDS
The Shares offered hereby are being registered for the account of the Selling
Shareholders and, accordingly, we will not receive any of the proceeds from the
sale of the Shares.
SELLING SHAREHOLDERS
The Shares being offered for resale by the Selling Shareholders were acquired in
a private placement of our common stock to Amgen Inc. The term "Selling
Shareholder" includes all persons acquiring securities and persons acquiring
such securities in permitted transfers from the original holders thereof in
transactions not requiring registration under the Securities Act.
The following table sets forth certain information regarding the beneficial
ownership of shares of Common Stock by the Selling Shareholders as of March 1,
2000, and as adjusted to reflect the sale of the Shares.
<TABLE>
Maximum Number of
Number of Shares Shares to be Sold Shares Owned After
Owned Prior to under this After Offering (1)
Name Offering Prospectus Number Percent
- ---- -------- ---------- ------ -------
<S> <C> <C> <C> <C>
Amgen Inc. 65,796 65,796 0 *
- -----------------
* Less than 1%.
</TABLE>
(1) Assumes that the Selling Shareholders will sell all Shares during the
effective period.
We entered into a development and clinical supply agreement with Amgen Inc. for
the delivery of Amgen products with our Iject needle-free injection system. In
connection with the agreement, Amgen made a $1.5 million investment in our
common stock.
13
<PAGE>
PLAN OF DISTRIBUTION
We are registering the Shares on behalf of the Selling Shareholders. As used in
this Prospectus, the term "Selling Shareholders" includes donees and pledgees
selling Shares received from a named Selling Stockholder after the date of this
Prospectus. The Selling Shareholders will offer and sell the Shares to which
this Prospectus relates for their own accounts. We will not receive any proceeds
from the sale of the Shares. We will bear all costs, expenses and fees in
connection with the registration of the Shares. Brokerage commissions and
similar selling expenses, if any, attributable to the sale of the Shares will be
borne by the Selling Shareholders.
The Selling Shareholders may offer and sell the Shares from time to time in one
or more types of transactions (which may include block transactions) on the
Nasdaq SmallCap Market, in transactions directly with market makers or in
privately negotiated transactions, through put or call options transactions,
through short sales, or a combination of such methods of sale, at prices
relating to prevailing market prices or at negotiated prices. Sales may be made
to or through brokers or dealers who may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders or the
purchasers of the Shares. As of the date of this Prospectus, we are not aware of
any agreement, arrangement or understanding between any broker or dealer and the
Selling Shareholders regarding the sale of their Shares, nor are we aware of any
underwriter or coordinating broker acting in connection with the proposed sale
of Shares by the Selling Shareholders. There is no assurance that the Selling
Shareholders will sell any or all of the Shares that they offer.
The Selling Shareholders and any brokers or dealers who participate in the sale
of the Shares may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), and any commissions
received by them and any profits realized by them on the resale of Shares may be
deemed to be underwriting discounts or commissions under the Securities Act.
Because the Selling Shareholders may be deemed to be "underwriters" within the
meaning of the Securities Act, the Selling Shareholders will be subject to the
prospectus delivery requirements of the Securities Act. We have informed the
Selling Shareholders that the anti-manipulative provisions of Regulation M
promulgated under the Exchange Act may apply to their sales in the market.
The Selling Shareholders may also resell all or a portion of the Shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
it meets the criteria and conforms to the requirements of such Rule.
Upon notification to us by a Selling Stockholder that any material arrangement
has been entered into with a broker or dealer for the sale of Shares through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, a supplement to this Prospectus will be
filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing
(i) the name of each such Selling Stockholder and of the participating brokers
or dealers, (ii) the number of Shares involved, (iii) the price at which such
Shares were sold, (iv) the commissions paid or discounts or concessions allowed
to such brokers or dealers, where applicable, (v) that such brokers or dealers
did not conduct any investigation to verify the information set out or
incorporated by reference in this Prospectus and (vi) other facts material to
the transaction. In addition, upon notification to us by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 Shares, a supplement to
this Prospectus will be filed.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby will
be passed upon for us by Dorsey & Whitney LLP, Seattle, Washington.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
14
<PAGE>
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table itemizes the expenses incurred by the Company in connection
with the shares of Common Stock being registered. All of the amounts shown are
estimates except the Securities and Exchange registration fee.
Item Amount
- ---- ------
Securities and Exchange Commission Registration Fee $ 215.00
Blue Sky Fees and Expenses 0.00
Accounting Fees and Expenses 3,000.00
Legal Fees and Expenses 3,000.00
Miscellaneous 0.00
Total $6,215.00
The Selling Shareholders will pay no portion of the foregoing expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Generally, Sections 60.387 through 60.414 of the Oregon Business Corporation Act
(the "Oregon Act") authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers in circumstances
where the officer or director acted in good faith, in a manner that the director
or officer reasonably believed to be in (or at least not opposed to) the best
interests of the corporation and, if in a criminal proceeding, if the director
or officer had no reasonable cause to believe his conduct was unlawful. Article
IX of the Company's Bylaws provides for indemnification to the greatest extent
permitted by the Oregon Act.
Section 60.047 of the Oregon Act authorizes a corporation to limit a director's
liability to the corporation or its shareholders for monetary damages resulting
from conduct as a director, except in certain circumstances involving breach of
the director's duty of loyalty to the corporation or its shareholders,
intentional misconduct or knowing violation of the law, self dealing or approval
of illegal corporate loans or distributions, or any transaction from which the
director personally receives a benefit in money, property or services to which
the director is not legally entitled. Article VII of the Company's Articles of
Incorporation contains provisions implementing, to the fullest extent allowed,
limitations on a director's liability to the Company or its shareholders. The
Company currently maintains officers' and directors' liability insurance.
15
<PAGE>
ITEM 16. EXHIBITS
Exhibit
Number Description
------ -----------
4.1+ Stock Purchase Agreement dated as of February 29, 2000
5.1 Opinion of Dorsey & Whitney LLP
23.1 Consent of Consent of Dorsey & Whitney LLP
(included in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
24.1 Power of Attorney (see signature page)
- --------------------
+ Confidential treatment has been requested for certain portions of this exhibit
pursuant to Rule 406 under the Securities Act of 1933, as amended. Confidential
portions have been separately provided to the Commission.
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment thereof), which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and
(a)(1)(ii) above do not apply if this Registration Statement is on Form S-3,
Form S-8 or Form F-3, and the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities as that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
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<PAGE>
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Indemnification for Liabilities.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expense incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Oregon, on March 17, 2000.
BIOJECT MEDICAL TECHNOLOGIES INC.
BY: /s/ James O'Shea
------------------------------------
James C. O'Shea
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints James C.
O'Shea and Chris Farrell, or either of them, his attorney-in-fact, with the
power of substitution, for them in any and all capacities, to sign any
amendments to this registration statement, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
- --------- ----- ----
/s/ James O'Shea Chairman of the Board, March 17, 2000
- --------------------------- Chief Executive Officer
James C. O'Shea and President (Principal
Executive Officer and
Principal Accounting and
Financial Officer)
Director
- ---------------------------
William A. Gouveia
/s/ John Ruedy Director March 14, 2000
- ---------------------------
John Ruedy, M.D.
Director
- ---------------------------
Grace Keeney Fey
/s/ Eric T. Herfindal Director March 20, 2000
- ---------------------------
Eric T. Herfindal
/s/ David de Weese Director March 14, 2000
- ---------------------------
David de Weese
/s/ Richard J. Plestina Director March 15, 2000
- ---------------------------
Richard J. Plestina
/s/ Edward Flynn Director March 15, 2000
- ---------------------------
Edward Flynn
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description
------ -----------
4.1+ Stock Purchase Agreement dated as of February 29, 2000
5.1 Opinion of Dorsey & Whitney LLP
23.1 Consent of Consent of Dorsey & Whitney LLP
(included in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
24.1 Power of Attorney (see signature page)
- ----------------------
+ Confidential treatment has been requested for certain portions of this exhibit
pursuant to Rule 406 under the Securities Act of 1933, as amended. Confidential
portions have been separately provided to the Commission.
EXHIBIT 4.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of February 29,
2000 between Bioject Medical Technologies, Inc., an Oregon corporation (the
"Company"), and Amgen Inc., a Delaware corporation (the "Investor").
1. Authorization of Shares. The Company has duly authorized the sale and
issuance of Sixty-Five Thousand Seven Hundred Ninety-Six (65,796) shares (the
"Shares") of common stock of the Company, without par value (the "Common
Stock"), to Investor. The Shares equal the quotient of (a) the Purchase Price
(as defined below) divided by (b) the product of (i) the average closing price
of the Common Stock on The Nasdaq Stock Market, Inc. Small Cap Market (the
"Nasdaq Small Cap Market") for the *** (***) trading days ending February 22,
2000, multiplied by (ii) *** Percent (***%).
2. Agreement to Sell and Purchase Shares. Upon the terms and subject to the
conditions contained herein, the Company and the Investor agree that the
Investor will purchase from the Company and the Company will issue and sell to
the Investor the Shares, for an aggregate purchase price (the "Purchase Price")
of One Million Five Hundred Thousand Dollars ($1,500,000). Unless otherwise
requested by the Investor, certificates representing the Shares purchased by the
Investor will be registered in the Investor's name and address as set forth on
the signature page hereto.
3. Delivery of the Shares at Closing. The completion of the purchase and
sale of the Shares (the "Closing") shall occur on February 29, 2000 (the
"Closing Date"), at the Investor's principal place of business, or at such
different time or day or location as the Company and the Investor mutually
agree. At the Closing, the Company shall deliver to the Investor one or more
stock certificates representing the Shares, each such certificate to be
registered in the name of the Investor.
3.1 The Company's obligation to issue the Shares to the Investor shall
be subject to the following conditions, any one or more of which may be waived
by the Company in writing:
(a) receipt by the Company of a certified or official bank check
or wire transfer of funds in the full amount of the Purchase Price; and
(b) the representations and warranties of the Investor set forth
herein shall be true and correct in all respects.
3.2 The Investor's obligation to purchase the Shares shall be subject
to the following conditions, any one or more of which may be waived by the
Investor in writing:
(a) the representations and warranties of the Company set forth
herein shall be true and correct in all respects;
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
(b)the Company shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by it on or before the Closing Date;
(c) the Company shall have delivered to Investor a certificate
dated the Closing Date, executed by the Chief Executive Officer and Chief
Financial Officer of the Company, certifying the satisfaction of the conditions
specified in subsections (a) and (b) of this Section 3.2;
(d) the Investor shall have received from Dorsey & Whitney LLP,
counsel for the Company, a favorable opinion dated the Closing Date in the form
of Exhibit A hereto;
(e) all registrations, qualifications, permits and approvals
required u nder applicable state securities laws shall have been obtained for
the lawful execution, delivery and performance of this Agreement, including
without limitation the offer, sale, issue and delivery of the Shares;
(f) Investor shall have received the following:
(1) Copies of resolutions of the Company's Board of
Directors, certified by the Secretary of the Company, authorizing and approving
the execution, delivery and performance of this Agreement, and all other
documents and instruments to be delivered pursuant hereto and thereto;
(2) A certificate of incumbency executed by the Secretary of
the Company certifying the names, titles and signatures of the officers
authorized to execute the documents referred to in subsection (1) above and
further certifying that the Amended and Restated Articles of Incorporation and
Amended and Restated Bylaws of the Company delivered to the Investor at the time
of the execution of this Agreement have been validly adopted, are in full force
and effect, and have not been further amended or modified; and
(3) Such additional supporting documentation and other
information with respect to the transactions contemplated hereby as Investor may
reasonably request;
(g) all corporate and other proceedings and actions taken in
connection with the transactions contemplated hereby and all certificates,
opinions, agreements, instruments and documents mentioned herein or incident to
any such transactions, shall be satisfactory in form and substance to Investor;
(h) the Company's Subsidiary, Bioject Inc., an Oregon
corporation, and Investor shall have entered into the License and Development
Agreement dated as of the date hereof (the "License and Development Agreement");
2
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
(i) Any approval, consent or waiting period required by any
governmental agency or authority, or any other individual, partnership, joint
venture, corporation, limited liability company, trust, estate, unincorporated
organization, or any other entity (each, a "Person"), necessary or material to
the consummation of the transactions contemplated hereby shall have been
obtained; and
(j) No order of any court of administrative agency shall be in
effect which restrains or prohibits any transaction contemplated hereby or by
the License and Development Agreement which would limit or affect the Investor's
rights hereunder or thereunder.
4. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, the Investor, as follows:
4.1 Organization. The Company is duly organized and validly existing
in good standing under the laws of the State of Oregon. Each of the Company and
its Subsidiaries (as defined in Rule 405 under the Securities Act of 1933, as
amended (the "Securities Act")) has full power and authority to own, operate and
occupy its properties and to conduct its business as presently conducted and as
proposed to be conducted and is registered or qualified to do business and in
good standing in each jurisdiction in which it owns or leases property or
transacts business and where the failure to be so qualified would have a
material adverse effect upon the business, properties, condition (financial or
otherwise), operations or prospects of the Company and its Subsidiaries,
considered as one enterprise (collectively, a "Material Adverse Effect"), and no
proceeding has been instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification. All Subsidiaries of the Company are disclosed in Schedule 4.1.
4.2 Due Authorization. The Company has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement,
and this Agreement has been duly authorized and validly executed and delivered
by the Company and constitutes the legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms. All
corporate acts and proceedings required for the authorization, execution and
delivery of this Agreement, the offer, issuance and delivery of the Shares and
the performance of this Agreement have been lawfully and validly taken or will
have been so taken prior to the Closing.
4.3 Non-Contravention. The execution and delivery of this Agreement,
the issuance and sale of the Shares, the fulfillment of the terms of this
Agreement and the consummation of the transactions contemplated hereby will not
(A) conflict with or constitute a violation of, or default (with the passage of
time or otherwise) under, (i) any material bond, debenture, note or other
evidence of indebtedness, or under any material lease, contract, indenture,
mortgage, deed of trust, security agreement, loan or credit agreement, joint
venture or other agreement, instrument, commitment or arrangement to which the
Company or any Subsidiary is a party or by which the Company or any of its
Subsidiaries or their respective properties are bound, (ii) the Amended and
Restated Articles of Incorporation, Amended and Restated Bylaws or other
organizational documents of the Company or any Subsidiary, or (iii) any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the
3
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
Company or any Subsidiary or their respective properties, or (B) result in the
creation or imposition of any lien, encumbrance, claim, security interest,
charge, option, pledge or restriction whatsoever (a "Lien") upon any of the
material properties, assets or rights of the Company or any Subsidiary or an
acceleration of indebtedness pursuant to any obligation, agreement or condition
contained in any material bond, debenture, note or any other evidence of
indebtedness or any material, lease, contract, indenture, mortgage, deed of
trust, security agreement, loan or credit agreement or any other agreement or
instrument to which the Company or any Subsidiary is a party or by which any of
them is bound or to which any of the property or assets of the Company or any
Subsidiary is subject, the result of which would have a Material Adverse Effect.
No consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or
other governmental body in the United States is required for the execution and
delivery of this Agreement and the valid issuance and sale of the Shares to be
sold pursuant to the Agreement, other than such as have been made or obtained,
and except for any securities filings required to be made under federal or state
securities laws. The execution, delivery and performance by the Company of this
Agreement will not require from the Board of Directors or the stockholders of
the Company any consent or approval that has not been validly and lawfully
obtained. The Company is not subject to any restriction of any kind or character
which prohibits the Company from entering into this Agreement or would prevent
its performance of or compliance with all or any part of this Agreement or the
consummation of the transactions contemplated hereby or thereby.
4.4 Capitalization. The capitalization of the Company consists of
100,000,000 shares of Common Stock, and 10,000,000 shares of preferred stock of
the Company, without par value (the "Preferred Stock"), of which 1,235,000
shares have been designated as Series A Preferred Stock, 200,000 shares have
been designated as Series B Preferred Stock, and 500,000 shares have been
designated as Series C Preferred Stock, and the Company has no authority to
issue any other capital stock. As of December 31, 1999, 5,828,784 shares of
Common Stock are issued and outstanding, 692,694 shares of Series A Preferred
Stock are issued and outstanding, zero shares of Series B Preferred Stock are
issued and outstanding, and 391,830 shares of Series C Preferred Stock are
issued and outstanding. The Shares have been duly authorized, and when issued
and paid for in accordance with the terms of the Agreement will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens and
any other restrictions, and were not issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities. The
outstanding shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. Except as disclosed in
Schedule 4.4, no preemptive right, co-sale right, right of first refusal,
registration right, or other similar right exists with respect to the Shares or
the issuance and sale thereof. No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is required for the
issuance and sale of the Shares. Except as disclosed in Schedule 4.4, there are
no stockholders agreements, voting agreements or other similar agreements with
respect to the capital stock of the Company to which the Company is a party or,
to the knowledge of the Company, between or among any of the Company's
stockholders.
4.5 Legal Proceedings. There is no material legal or governmental
proceeding pending or, to the knowledge of the Company, threatened to which the
Company or any Subsidiary or any officer, director or key employee thereof is or
may be a party or to which the business or property of the Company or any
Subsidiary is subject. After reasonable investigation, the Company
4
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
is not aware of any fact which might result in or form the basis for any such
action, suit, arbitration, investigation, inquiry or other proceeding, which if
adversely determined would have a Material Adverse Effect. The Company is not in
default with respect to any order, writ, judgment, injunction, decree,
determination or award of any court or of any governmental agency or
instrumentality (whether federal, state, local or foreign).
4.6 No Violations. Neither the Company nor any Subsidiary is in
violation of its charter, bylaws, or other organizational document, or in
violation of any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the Company
or any Subsidiary, which violation, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, or is in default (and there
exists no condition which, with the passage of time or otherwise, would
constitute a default) in any material respect in the performance of any bond,
debenture, note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust or any other material agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary is bound or by which the properties of the Company or any Subsidiary
are bound, which would be reasonably likely to have a Material Adverse Effect.
To the best of its knowledge, the Company, its Subsidiaries, and their
respective businesses, properties and assets are in compliance in all material
respects with all applicable laws and regulations, including without limitation
those relating to (a) health, safety and employee relations, (b) environmental
matters, including the discharge of any hazardous or potentially hazardous
materials into the environment, and (c) the development, commercialization and
sale of medical devices, pharmaceutical and biotechnology products, including
all applicable regulations of the United States Food and Drug Administration and
comparable foreign regulatory authorities.
4.7 Governmental Permits, Etc. With the exception of the matters that
are dealt with separately under Sections 4.1, 4.14, 4.15 and 4.16, each of the
Company and its Subsidiaries has all necessary franchises, licenses,
certificates and other authorizations from any foreign, federal, state or local
government or governmental agency, department, or body that are currently
necessary for the operation of the business of the Company and its Subsidiaries
as currently conducted, except where the failure to currently possess could not
reasonably be expected to have a Material Adverse Effect.
4.8 Intellectual Property. (i) Each of the Company and its
Subsidiaries owns or possesses sufficient rights to use all patents, patent
rights (including patent applications), trademarks, copyrights, licenses,
inventions, trade secrets, trade names and know-how (collectively, "Intellectual
Property") that are necessary for the conduct of its business as now conducted
or as proposed to be conducted, in each case free and clear of any right, Lien
or claim of others, except where the failure to currently own or possess would
not have a Material Adverse Effect, and none of the Company's or any
Subsidiary's rights in or use of such Intellectual Property has been or is
currently threatened to be challenged; (ii) neither the Company nor any of its
Subsidiaries has received any notice of, or has any knowledge of, any
infringement of asserted rights of a third party with respect to any
Intellectual Property that, individually or in the aggregate, would have a
Material Adverse Effect; and (iii) neither the Company nor any of its
Subsidiaries has received any notice of any infringement of rights of a third
party with respect to any Intellectual Property that, individually or in the
5
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
aggregate, would have a Material Adverse Effect. Without limiting the foregoing,
the Company's Subsidiary, Bioject Inc., owns or possesses sufficient rights to
use all Intellectual Property necessary to make, have made, use, sell, offer for
sale and import a pre-filled needle-free injector system.
4.9 Financial Statements. Included in the Company's Report on Form
10-Q for the quarterly period ended December 31, 1999 (the "10-Q") are the
Company's unaudited balance sheet (the "Balance Sheet") as of December 31, 1999
(the "Balance Sheet Date"), and the unaudited statement of operations for the
nine-month period then ended. Included in the Company's Annual Report on Form
10-K (the "10-K") for the annual period ended March 31, 1999 are the Company's
audited balance sheet as of March 31, 1999 and audited statement of operations
for the twelve-month period then ended, together with the related opinion
thereon of Arthur Andersen LLP, independent certified public accountants. The
foregoing financial statements of the Company and the related notes present
fairly, in accordance with generally accepted accounting principles consistently
applied, the financial position of the Company and its Subsidiaries as of the
dates indicated, and the results of its operations and cash flows for the
periods therein specified, subject in the case of the 10-Q to normal year-end
audit adjustments (which shall not be material in the aggregate) and the absence
of footnote disclosures. Such financial statements (including the related notes)
are in accordance with the books and records of the Company and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods therein specified.
4.10 Taxes. For purposes of this Agreement, the term "Taxes" shall
include all federal, territorial, state, foreign, municipal and local income,
profits, gross receipts, franchise, sales, use, value added, occupation,
property, excise, customs, withholding, unemployment, worker's compensation,
social security and other taxes, duties, fees and assessments (including
interest and penalties). As of the date of this Agreement, the Company and each
of its Subsidiaries has timely filed or caused to be timely filed all
declarations, reports and returns (collectively, "Returns") for Taxes required
by law to be filed and all such returns for Taxes are complete and accurate. The
Company has paid, caused to be paid, or reserved against all Taxes which are
shown as due and payable on the Returns. There are no claims pending or, to the
best knowledge of the Company, threatened against the Company or any Subsidiary,
for past due Taxes.
4.11 Benefit Plans. Except as disclosed in Schedule 4.11, which sets
forth a true and accurate list and description of any such plans maintained or
sponsored by the Company or to which the Company is required to make
contributions, the Company does not maintain, sponsor, is not required to make
contributions to or otherwise have any liability with respect to any pension,
profit sharing, thrift or other retirement plan, employee stock ownership plan,
deferred compensation, stock ownership, stock purchase, performance share, bonus
or other incentive plan, health or group insurance plan, welfare plan, or other
similar plan, agreement, policy or understanding (whether written or oral),
whether or not such plan is intended to be qualified under Section 401(a) of the
Code, within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, which plan covers any employee or former
employee of the Company (collectively, "Employee Benefit Plans"). To the best
knowledge of the Company, all such Employee Benefit Plans are in compliance with
applicable law.
6
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
4.12 Insurance. The Company has and maintains adequate and sufficient
insurance, including liability, casualty and products liability insurance,
covering risks associated with its business, properties and assets, including
insurance that is customary for companies similarly situated.
4.13 No Material Adverse Change. Except as disclosed in Schedule 4.13,
since the Balance Sheet Date, there has not been: (a) a material adverse change
in the business, properties, condition (financial or otherwise), operations or
prospects of the Company or any Subsidiary; (b) any damage, destruction or loss,
whether or not covered by insurance, materially and adversely affecting the
business, properties, condition (financial or otherwise), operations or
prospects of the Company or any Subsidiary; (c) any declaration, setting aside
or payment of any dividend or any distribution or payment (whether in cash,
stock or property) in respect of the capital stock of the Company or any
Subsidiary, or any redemption or other acquisition of such stock by the Company
or any Subsidiary; (d) any waiver by the Company or any Subsidiary of a valuable
right or of a material debt owed to it; (e) any debt, obligation or liability
incurred, assumed or guaranteed by the Company or any Subsidiary, except in the
ordinary course of business; (f) any change in any material agreement to which
the Company or any Subsidiary is a party or by which it is bound which has or,
so far as the Company may now foresee, in the future may have a Material Adverse
Effect; or (g) any change in the assets, liabilities, condition (financial or
otherwise), results or operations or prospects of the Company or any Subsidiary
from those reflected on the 10-Q, except changes in the ordinary course of
business that have not, individually or in the aggregate, had a Material Adverse
Effect.
4.14 SEC and NASDAQ Compliance. The Company's Common Stock is
registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and is listed on The Nasdaq Small Cap Market, and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the Nasdaq Small Cap Market, nor, except as
disclosed on Schedule 4.14, has the Company received any notification that the
Securities and Exchange Commission (the "SEC") or the National Association of
Securities Dealers, Inc. ("NASD") is contemplating terminating such registration
or listing.
4.15 Reporting Status. The Company has filed in a timely manner all
documents that the Company was required to file under the Exchange Act during
the twelve (12) months preceding the date of this Agreement. The following
documents complied in all material respects with the SEC's requirements as of
their respective filing dates, and the information contained therein as of the
date thereof did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under where they were made not
misleading:
(a) the 10-K; and
(b) the 10-Q; and
7
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
(c) all other documents, if any, filed by the Company with the
SEC since March 31, 1999 pursuant to the reporting requirements
of the Exchange Act.
4.16 Listing. The Company shall comply with all requirements of the
NASD with respect to the issuance of the Shares and the listing thereof on the
Nasdaq Small Cap Market.
4.17 No Manipulation of Stock. The Company has not taken and will not,
in violation of applicable law, take, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares.
4.18 Registration Rights. Other than under this Agreement and as
disclosed on Schedule 4.4, the Company has not agreed to register under the
Securities Act any of its authorized or outstanding securities.
4.19 No Brokers or Finders. No Person has, or as a result of the
transactions contemplated herein will have, any right or valid claim against the
Company or the Investor for any commission, fee or other compensation as a
finder or broker, or in any similar capacity based upon obligations incurred by
the Company.
4.20 Disclosure. The information contained in this Agreement, in the
10-Q and the 10-K, and in any writing furnished pursuant hereto or in connection
herewith, taken as a whole, is true, complete and correct, and does not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or herein or necessary to make the statements
therein or herein, in light of the circumstances under which they were made, not
misleading.
5. Representations, Warranties and Covenants of the Investor.
5.1 Accredited Investor. The Investor represents and warrants to, and
covenants with, the Company that: (i) the Investor is an "accredited investor"
as defined in Regulation D under the Securities Act and the Investor is also
knowledgeable, sophisticated and experienced in making, and is qualified to make
decisions with respect to investments in shares presenting an investment
decision like that involved in the purchase of the Shares; (ii) the Investor is
acquiring the Shares in the ordinary course of its business and for its own
account for investment only and with no present intention of distributing any of
such Shares or any arrangement or understanding with any other persons regarding
the distribution of such Shares; (iii) the Investor will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares except in compliance with the Securities Act, applicable state securities
laws and the respective rules and regulations promulgated thereunder; and (iv)
the Investor will notify the Company promptly of any change in any of such
information until such time as the Investor has sold all of its Shares or until
the Company is no longer required to keep the Registration Statement (as defined
in Section 7.1) effective. Nothing contained in this Section 5.1 shall limit any
of the Company's representations or warranties or limit the Investor's recourse
in respect thereof.
8
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
5.2 Compliance with Prospectus Delivery Requirement. The Investor
hereby covenants with the Company not to make any sale of the Shares without
complying with the provisions of this Agreement, including Section 7.2 hereof,
and without effectively causing the prospectus delivery requirement under the
Securities Act to be satisfied, and the Investor acknowledges that the
certificates evidencing the Shares will be imprinted with a legend that
prohibits their transfer except in accordance therewith. The Investor
acknowledges that there may occasionally be times when the Company determines
that it must suspend the use of the Prospectus forming a part of the
Registration Statement, as set forth in Section 7.2(c).
5.3 Due Authorization. The Investor has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement,
and this Agreement has been duly authorized and validly executed and delivered
by the Investor and constitutes the legal, valid and binding agreement of the
Investor enforceable against the Investor in accordance with its terms. All
corporate acts and proceedings required for the authorization, execution and
delivery of this Agreement and the performance of this Agreement have been
lawfully and validly taken or will have been so taken prior to the Closing.
5.4 No Brokers or Finders. No Person has, or as a result of the
transactions contemplated herein will have, any right or valid claim against the
Company or the Investor for any commission, fee or other compensation as a
finder or broker, or in any similar capacity based upon obligations incurred by
the Investor.
6. Enforcement.
6.1 Survival of Representations, Warranties, Covenants and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Shares being purchased and the payment therefor.
6.2 Indemnification.
(a) The Company hereby covenants and agrees to defend, indemnify
and save and hold harmless the Investor, together with its officers, directors,
shareholders, employees, attorneys and representatives and each Person who
controls Investor within the meaning of the Securities Act, from and against any
loss, cost, expense, liability, claim or legal damages (including, without
limitation, reasonable fees and disbursements of counsel and accountants and
other costs and expenses incident to any actual or threatened claim, suit,
action or proceeding, and all costs of investigation) (collectively, the
"Damages") arising out of or resulting from (i) any inaccuracy in or breach of,
or failure to perform or observe, any representation, warranty, covenant or
agreement made by the Company in this Agreement or in any writing delivered
pursuant to this Agreement or at the Closing, or (ii) any claims of third
parties claiming compensation, commissions or expenses for services as a broker
or finder based upon obligations incurred by the Company. Damages resulting
directly from the gross negligence or willful misconduct of Investor or any of
its respective
9
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
officers, directors, employees or any Person who controls Investor within the
meaning of the Securities Act are not covered under this Section 6.2(a).
(b) Investor hereby covenants and agrees to defend, indemnify and
save and hold harmless the Company, together with its officers, directors,
shareholders, employees, attorneys and representatives and each Person who
controls the Company within the meaning of the Securities Act, from and against
any Damages arising out of or resulting from (i) any inaccuracy in or breach of,
or failure to perform or observe, any representation, warranty, covenant or
agreement made by the Investor in this Agreement or in any writing or other
agreement delivered pursuant hereto, or (ii) any claims of third parties
claiming compensation, commissions or expenses for services as a broker or
finder based upon obligations incurred by the Investor. Damages resulting
directly from the gross negligence or willful misconduct of the Company or any
of its respective officers, directors, employees or any Person who controls the
Company within the meaning of the Securities Act are not covered under this
Section 6.2(b).
(c) Each party entitled to be indemnified pursuant to Section
6.2(a) or 6.2(b) (each, an "Indemnified Party") shall notify the other party
(the "Indemnifying Party") in writing of any action against such Indemnified
Party in respect of which the Indemnifying Party is or may be obligated to
provide indemnification on account of Section 6.2(a) or 6.2(b), promptly after
the receipt of notice or knowledge of the commencement thereof. The omission of
any Indemnified Party so to notify the Indemnifying Party of any such action
shall not relieve the Indemnifying Party from any liability which it may have to
such Indemnified Party except to the extent the Indemnifying Party shall have
been materially prejudiced by the omission of such Indemnified Party so to
notify it, pursuant to this Section 6.2(c). In case any such action shall be
brought against any Indemnified Party and it shall notify the Indemnifying Party
of the commencement thereof, the Indemnifying Party shall be entitled to assume
the defense thereof, with counsel reasonable satisfactory to such Indemnified
Party, and after notice from it to such Indemnified Party of its election so to
assume the defense thereof, the Indemnifying Party will not be liable to such
Indemnified Party under Section 6.2(a) or 6.2(b) for any legal or other expense
subsequently incurred by such Indemnified Party in connection with the defense
thereof nor for any settlement thereof entered into without the consent of the
Indemnifying Party; provided, however, that (i) if the Indemnifying Party shall
elect not to assume the defense of such claim or action or (ii) if the
Indemnified Party reasonably determines (x) that there may be a conflict between
the positions of the Indemnifying Party and of the Indemnified Party in
defending such claim or action or (y) that there may be legal defenses available
to such Indemnified Party different from or in addition to those available to
the Indemnifying Party, then separate counsel for the Indemnified Party shall be
entitled to participate in and conduct the defense, in the case of (i) and
(ii)(x), or such different defenses, in the case of (ii)(y), and the
Indemnifying Party shall be liable for any reasonable legal or other expenses
incurred by the Indemnified Party in connection with the defense.
(d) Neither the Indemnified Party nor the Indemnifying Party may
concede, settle or compromise any action contemplated by Section 6.2(c) without
the consent of the other party, which consent will not be unreasonably withheld
or delayed in light of all factors of importance to such party; provided,
however, that if the Indemnified Party shall fail to consent to the settlement
of any action where (i) such settlement includes an unconditional release of all
actions
10
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
against the Indemnified Party and requires no payment on the part of the
Indemnified Party to the claimant or any other party, (ii) such settlement does
not require any action on the part of the Indemnified Party and does not impose
terms restricting or adversely affecting the Indemnified Party's activity, and
(iii) the claimant has affirmatively indicated that it will accept such
settlement, then the Indemnifying Party shall have no liability with respect to
any payment to be made in respect of such action in excess of the proposed
settlement amount.
(e) The foregoing indemnification provisions are in addition to,
and not in derogation of, any statutory, equitable or common-law remedy any
party may have for breach of representation, warranty, covenant or agreement, or
otherwise.
6.3 Injunctive Relief. (a) Any party may bring a claim seeking
specific performance by way of injunctive relief before a court of competent
jurisdiction in accordance with Section 9.3 to enforce the provisions of this
Agreement, and (b) in the event of any breach by either party of Section 9.10,
the other party may seek injunctive relief from a court of competent
jurisdiction to restrain any such breach.
6.4 No Implied Waiver. Except as expressly provided in this Agreement,
no course of dealing between the Company and Investor and no delay in exercising
any such right, power or remedy conferred hereby or now or hereafter existing at
law in equity, by statute or otherwise, shall operate as a waiver of, or
otherwise prejudice, any such right, power or remedy.
7. Registration of the Shares; Compliance with the Securities Act.
7.1 Registration Procedures and Expenses. The Company shall:
(a) use its efforts to prepare and file with the SEC, within
twenty (20) days after the Closing Date, a registration statement (the
"Registration Statement") to enable the resale of the Shares by the Investor
from time to time through the automated quotation system of the Nasdaq Small Cap
Market or in privately-negotiated transactions;
(b) use its best efforts to cause the Registration Statement to
become effective within *** (***) days after the Registration Statement is filed
by the Company;
(c) use its best efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and any prospectus used
in connection therewith (a "Prospectus") as may be necessary to keep the
Registration Statement current and effective for a period not exceeding, with
respect to the Shares, the earlier of (i) the second anniversary of the Closing
Date, (ii) the date on which the Investor may sell all Shares then held by the
Investor without restriction by the volume limitations of Rule 144(e) of the
Securities Act, or (iii) such time as all Shares have been sold pursuant to the
Registration Statement;
(d) furnish to the Investor with respect to the Shares registered
under the Registration Statement such number of copies of the Registration
Statement, Prospectuses and Preliminary Prospectuses in conformity with the
requirements of the Securities Act and such other
11
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
documents as the Investor may reasonably request, in order to facilitate the
public sale or other Disposition of all or any of the Shares by the Investor;
(e) file documents required of the Company for blue sky clearance
in states specified in writing by the Investor; provided, however, that the
Company shall not be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or has not so
consented;
(f) bear all expenses in connection with the procedures in
paragraph (a) through (e) of this Section 7.1 and the registration of the Shares
pursuant to the Registration Statement; and
(g) advise the Investor, promptly after it shall receive notice
or obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceeding for that purpose; and it will promptly use its best
efforts to prevent the issuance of any stop order or to obtain its withdrawal at
the earliest possible moment if such stop order should be issued.
The Company understands that the Investor disclaims being an
underwriter, but the Investor being deemed an underwriter by the SEC shall not
relieve the Company of any obligations it has hereunder; provided, however that
if the Company receives notification from the SEC that the Investor is deemed an
underwriter, then the ninety day period provided in Section 7.1(b) shall be
extended to the earlier of (i) the *** (***) day after such SEC notification, or
(ii) *** (***) days after the initial filing of the Registration Statement with
the SEC.
7.2 Transfer of Shares After Registration; Suspension.
(a) The Investor agrees that it will not effect any sale,
assignment or other transfer (a "Disposition") of the Shares or its right to
purchase the Shares that would constitute a sale within the meaning of the
Securities Act except as contemplated in the Registration Statement referred to
in Section 7.1 and as described below, and that it will promptly notify the
Company of any changes in the information set forth in the Registration
Statement regarding the Investor or its plan of distribution.
(b) Except in the event that paragraph (c) below applies, the
Company shall (i) if deemed necessary by the Investor, prepare and file from
time to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or amendment
to any document incorporated therein by reference or file any other required
document (A) so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to purchasers of the Shares being sold
thereunder, such Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading or (B) to revise or amend the plan of distribution of
the Shares as requested by Investor; (ii) provide the Investor copies of any
12
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
documents filed pursuant to Section 7.2(b)(i); and (iii) inform each Investor
that the Company has complied with its obligations in Section 7.2(b)(i) (or
that, if the Company has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, the Company will notify the
Investor to that effect, will use its reasonable efforts to secure the
effectiveness of such post-effective amendment as promptly as possible and will
promptly notify the Investor pursuant to Section 7.2(b)(i) hereof when the
amendment has become effective).
(c) Subject to paragraph (d) below, in the event (i) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related Prospectus or for additional
information; (ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; or (iv) of any event or circumstance which, upon
the advice of its counsel, necessitates the making of any changes in the
Registration Statement or Prospectus, or any document incorporated or deemed to
be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; then the Company shall deliver a certificate in
writing to the Investor (the "Suspension Notice") to the effect of the foregoing
and, upon receipt of such Suspension Notice, the Investor will refrain from
selling any Shares pursuant to the Registration Statement (a "Suspension") until
the Investor's receipt of copies of a supplemented or amended Prospectus
prepared and filed by the Company, or until it is advised in writing by the
Company that the current Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in any such Prospectus. In the event of any Suspension, the Company
will use its best efforts to cause the use of the Prospectus so suspended to be
resumed as soon as reasonably practicable, and in any event not more than ***
(***) days after the delivery of a Suspension Notice to the Investor; provided,
however, that the Company shall not be required to amend a Registration
Statement or supplement a Prospectus for a period of up to *** (***) days after
delivery of a Suspension Notice to the Investor if the Company's Board of
Directors determines in good faith that do so would be seriously detrimental to
*** involving the Company, it being understood that the period for which the
Company is obligated to keep the Registration Statement effective under Section
7.1(c) shall be extended for a number of days equal to the number of days the
Company delays amendment or supplement pursuant to this provision; provided that
the Company shall be able to delay amendment or supplement pursuant to this
provision only once. In addition to and without limiting any other remedies
(including, without limitation, at law or at equity) available to the Investor,
the Investor shall be entitled to ***.
(d) Provided that a Suspension is not then in effect the Investor
may sell Shares under the Registration Statement, provided that it arranges for
delivery of a current
13
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
Prospectus to the transferee of such Shares or sells the Shares pursuant to an
exemption under the Securities Act. Upon receipt of a request therefor, the
Company agrees to provide an adequate number of current Prospectuses to the
Investor and to supply copies to any other parties requiring such Prospectuses.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" shall include the Investor and any
Person controlling, controlled by or under common control with Investor (an
"Affiliate");
(ii) the term "Registration Statement" shall include any final
Prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1; and
(iii) the term "untrue statement" shall include any untrue statement
or alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless each
Selling Stockholder from and against any losses, claims, damages or liabilities
to which such Selling Stockholder may become subject (under the Securities Act
or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon (i) any
untrue statement of a material fact contained in the Registration Statement, or
(ii) any failure by the Company to fulfill any undertaking included in the
Registration Statement, and the Company will reimburse such Selling Stockholder
for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, or
preparing to defend any such action, proceeding or claim; provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based upon, an untrue
statement made in such Registration Statement in reliance upon and in strict
conformity with written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for use in preparation of the Registration
Statement.
(b) The Investor agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any untrue statement of a material fact contained in the
Registration Statement if such untrue statement was made in reliance upon and in
strict conformity with written information furnished by or on behalf of the
Investor specifically for use in preparation of the Registration Statement, and
the Investor will reimburse the Company (or such officer, director or
controlling person), as the case may be, for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided that
14
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
the Investor's obligation to indemnify the Company shall be limited to the net
amount received by the Investor from the sale of the Shares sold by the Investor
pursuant to the Registration Statement.
(c) Promptly after receipt by any indemnified person of a notice
of a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 7.3 (except to the extent that such
omission materially and adversely affects the indemnifying party's ability to
defend such action) or from any liability otherwise than under this Section 7.3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person, so long as no
indemnifying person is responsible for the fees and expenses of more than one
separate counsel for all indemnified parties. In no event shall any indemnifying
person be liable in respect of any amounts paid in settlement of any action
unless the indemnifying person shall have approved the terms of such settlement;
provided that such consent shall not be unreasonably withheld. No indemnifying
person shall, without the prior written consent of the indemnified person,
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified person is or could have been a party and indemnification
could have been sought hereunder by such indemnified person, unless such
settlement includes an unconditional release of such indemnified person from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Investor on
the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or the Investor on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement. The amount paid or payable by an indemnified
party as a result of the losses, claims,
15
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
the Investor shall not be required to contribute any amount in excess of the
amount by which the net amount received by the Investor from the sale of the
Shares to which such loss relates exceeds the amount of any damages which the
Investor has otherwise been required to pay by reason of such untrue statement.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 7.3, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 7.3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Act and the Exchange Act. The
parties are advised that federal or state public policy as interpreted by the
courts in certain jurisdictions may be contrary to certain of the provisions of
this Section 7.3, and the parties hereto hereby expressly waive and relinquish
any right or ability to assert such public policy as a defense to a claim under
this Section 7.3 and further agree not to attempt to assert any such defense.
7.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of the
Shares shall cease and terminate as to any particular number of the Shares when
such Shares shall have been effectively registered for resale under the
Securities Act and sold or otherwise disposed of in accordance with the intended
method of Disposition set forth in the Registration Statement covering such
Shares or at such time as an opinion of counsel satisfactory to the Company in
its reasonable judgment shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.
7.5 Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the Company will
furnish to the Investor:
(a) as soon as practicable after it is available, one copy of (i)
its Annual Report to Stockholders (which Annual Report is mailed to shareholders
with the Company's Form 10-K, which shall contain financial statements audited
in accordance with generally accepted accounting principles by a national firm
of certified public accountants), (ii) its Annual Report on Form 10-K and (iii)
its Quarterly Reports on Form 10-Q (the foregoing, in each case, including
exhibits); and
(b) an adequate number of copies of the Prospectuses to supply to
any other party requiring such Prospectuses; and the Company, upon the
reasonable request of the Investor, will meet with the Investor or a
representative thereof at the Company's headquarters to discuss all information
relevant for disclosure in the Registration Statement covering the Shares and
16
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
will otherwise cooperate with the Investor conducting an investigation for the
purpose of reducing or eliminating the Investor's exposure to liability under
the Securities Act, including the reasonable production of information at the
Company's headquarters.
7.6 ***. Except as otherwise set forth in this Section 7.6, the
Investor agrees not to *** for a *** of (a) *** following the *** or (b) the ***
to *** (as defined therein) in accordance with the provisions of the License and
Development Agreement. Notwithstanding the foregoing, there shall be no
restriction on any *** by the Investor: (i) to any ***; provided, however, that
this Agreement shall be ***; (ii) which has been ***; (iii) pursuant to a ***;
(iv) pursuant to a *** to which the Company is a party; (v) in a ***or ***; or
(vi) pursuant to ***.
7.7 Other Registration Rights. Except as provided in Section 7.4, so
long as the Investor or any of its Affiliates owns any of the Shares, the
Company will not grant to any Person the right to request to register any equity
securities of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, which *** with the ***, without the prior
written consent of the Investor. Notwithstanding the foregoing, it is understood
that the Company may grant rights to other Persons to (a) participate in *** so
long as such rights are *** and ***, and (b) request registrations so long as
the Investor is entitled to participate in any such registrations ***.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (a) if within domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (b) if delivered
from outside the United States, by International Federal Express or facsimile,
and shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if delivered
by nationally recognized overnight carrier, one business day after so mailed,
(iii) if delivered by International Federal Express, two business days after so
mailed, (iv) if delivered by facsimile, upon electric confirmation of receipt
and shall be delivered as addressed as follows:
(a) if to the Company, to:
Bioject Medical Technologies, Inc.
7620 S.W. Bridgeport Road
Portland, Oregon 97224
Attn: James O'Shea, Chairman, President
and Chief Executive Officer
Facsimile: (503) 620-6431
with a copy to:
Dorsey & Whitney LLP
US Bank Building Center
1420 5th Avenue, Suite 400
Seattle, WA 98101
Attn: Kimberley R. Anderson, Esq.
Facsimile: (206) 903-8800
17
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
(b) if to the Investor, to:
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, California 91320-1789
Attn: General Counsel, Senior Vice President,
Corporate Development and Corporate Secretary
Facsimile: (805) 499-8011
9. Miscellaneous.
9.1 No Waiver. Failure by either party to insist upon strict
observance of or compliance with any of the terms of this Agreement in one or
more instances shall not be deemed to be a waiver of its rights to insist upon
such observance of compliance with the other terms hereof nor any waiver with
respect to any subsequent failures to observe compliance with such terms in the
future.
9.2 Assignment. Neither this Agreement nor any interest herein may be
assigned by either party hereto without the written consent of the other party
hereto, except that Investor may assign all of its rights hereunder to any
Affiliate of Investor. Subject to the foregoing, all the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
whether so expressed or not. Subject to the immediately preceding sentence, this
Agreement shall not run to the benefit of or be enforceable by any Person other
than a party to this Agreement and its successors and assigns. The Company may
not assign this Agreement without the prior written consent of the Investor,
which may be withheld in the Investor's sole discretion. This Agreement shall be
binding upon and inure to the benefit of the parties, their successors and
permitted assigns.
9.3 Governing Law; Jurisdiction. This Agreement is governed by the
laws of the State of California, without regard to its principles of conflicts
of law. Each of the parties hereby submits to the exclusive jurisdiction of the
courts of California, both state and federal, for any actions, suits or
proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby, and each party agrees not to commence any action, suit or
proceeding relating thereto except in such courts.
9.4 Further Actions. The parties agree to execute, acknowledge and
deliver such further instruments and to do all such other incidental acts as may
be reasonably necessary or appropriate to carry out the purpose and intent of
this Agreement.
9.5 Severability. In the event any one or more of the provisions of
this Agreement should for any reason be held by any court or authority having
jurisdiction over either of the parties or this Agreement to be invalid, illegal
or unenforceable, such provision or provisions shall be validly reformed so as
to as nearly approximate the intent of the parties as possible or, if
unreformable, shall be divisible and deleted in such jurisdiction; elsewhere,
this Agreement shall not be affected.
18
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
9.6 Captions. The Parties agree that the headings in the Agreement are
used for the convenience of the Parties only and are not intended to be used in
the interpretation of this Agreement.
9.7 Entire Agreement. This Agreement, including the Exhibits and other
documents provided for herein and contemplated hereby, contains the entire
understanding between the parties hereto in respect of the subject matter
contained herein and supersedes all prior agreements, understandings,
representations and communications, whether written or oral. This Agreement
shall not be amended or supplemented except in a written document duly executed
by a duly authorized representative of each party.
9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
9.9 Rule 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of the Investor made
after the first anniversary of the Closing Date, make publicly available such
information as necessary to permit sales pursuant to Rule 144 under the
Securities Act), and it will take such further action as the Investor may
reasonably request, all to the extent required from time to time to enable the
Investor to sell Shares purchased hereunder without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (b)
any similar rule or regulation hereafter adopted by the SEC. Upon the request of
the Investor, the Company will deliver to such holder a written statement as to
whether it has complied with such information and requirements.
9.10 Public Announcements. Subject to Section 9.11, neither party
shall issue a press release or make any other disclosure of the existence of or
the terms of this Agreement to any Person, or otherwise use the name or
trademarks or products of the other party or the names of any employees thereof,
without the prior approval of such press release or disclosure by the other
party hereto.
9.11 Required Disclosure. If in the reasonable opinion of any party's
counsel (which may include such party's internal counsel), a disclosure which is
subject to Section 9.10 shall be required by law, regulation or court order,
including without limitation in a filing with the SEC or the United States Food
and Drug Administration, then the disclosing party shall provide copies of the
disclosure reasonably in advance of such filing or other disclosure for the
nondisclosing party's prior review and comment, and the nondisclosing party
shall provide its comments, if any, on such announcement as soon as practicable.
19
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
AMGEN INC.
By: /s/ Gordon M. Binder
------------------------------------
Gordon M. Binder
Chairman of the Board and Chief Executive Officer
BIOJECT MEDICAL TECHNOLOGIES, INC.
By: /s/ James C. O'Shea
------------------------------------
James C. O'Shea
President and Chief Executive Officer
***Confidential treatment has been requested pursuant to Rule 406 of the
Securities Act of 1933, as amended. Omitted portions have been filed separately
with the Securities and Exchange Commission.
EXHIBIT 5.1
[Letterhead of Dorsey & Whitney LLP]
March 20, 2000
Bioject Medical Technologies Inc.
7620 SW Bridgeport Road
Portland, Oregon 97224
Gentlemen and Ladies:
We are delivering this opinion in connection with the Registration Statement on
Form S-3 (the "Registration Statement") of Bioject Medical Technologies Inc.
(the "Company") to be filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
an aggregate of 65,796 shares, without par value, of common stock of the Company
(the "Shares") to be resold by certain selling shareholders named therein (the
"Selling Shareholders").
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments relating to the incorporation of the Company and to the
authorization and issuance of the Shares, and have made such investigations of
law, as we have deemed necessary and advisable.
Based upon the foregoing and having due regard for such legal questions as we
have deemed relevant, we are of the opinion that:
The 65,796 Shares, which were purchased by The Selling Shareholders, have
been duly authorized, and, when issued, constituted or will constitute duly
authorized, legally issued, fully paid and nonassessable shares of common
stock of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above, and to the reference to our firm in
the Prospectus constituting a part of the Registration Statement.
Very truly yours,
/s/DORSEY & WHITNEY LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of our report dated May 7,
1999 included in the Bioject Medical Technologies, Inc. Annual Report on Form
10-K for the fiscal year ended March 31, 1999 and to all references to our firm
included in this Registration Statement.
/s/ Arthur Andersen, LLP
Portland, Oregon
March 17, 2000
