-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FNa3cQPHlQbHCyU5XKYR3gw4BCUAqJO0XkkMP8O6AxnsvQebGtCK0HM+FjKXuoWw +FUpKo022CY28ljsZJKKpQ== 0000810084-97-000070.txt : 19971104 0000810084-97-000070.hdr.sgml : 19971104 ACCESSION NUMBER: 0000810084-97-000070 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19971015 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971103 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOJECT MEDICAL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000810084 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 931099680 STATE OF INCORPORATION: OR FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-15360 FILM NUMBER: 97706947 BUSINESS ADDRESS: STREET 1: 7620 S W BRIDGEPORT RD CITY: PORTLAND STATE: OR ZIP: 97224 BUSINESS PHONE: 5036397221 MAIL ADDRESS: STREET 1: 7620 S W BRIDGEPORT ROAD CITY: PORTLAND STATE: OR ZIP: 97224 FORMER COMPANY: FORMER CONFORMED NAME: BIOJECT MEDICAL SYSTEMS LTD DATE OF NAME CHANGE: 19920703 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 15, 1997 ----------------- BIOJECT MEDICAL TECHNOLOGIES INC. -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Oregon ---------------------------------------------- (State or Other Jurisdiction of Incorporation) 0-15360 93-1099680 ------------------------ ------------------------------ (Commission File Number) (IRS Employer Identification No.) 7620 SW Bridgeport Road Portland, Oregon 97224 - --------------------------------------- --------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (503) 639-7221 -------------- N/A ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events On September 30, 1997, the Company executed a binding letter agreement with Elan Corporation, plc ("Elan plc") and Elan International Services, Ltd. ("Elan"), a wholly-owned subsidiary of Elan plc, covering various investments in the Company by Elan, the formation of the Company's new subsidiary, Bioject JV Subsidiary Inc. ("JV Sub"), and a license (the "License") by Elan plc to JV Sub of certain patents and know-how (the "Technology") related to systems for the continuous monitoring of glucose levels in persons with diabetes. The parties anticipate that an ambulatory monitoring system will be developed under the License. The system is expected to include a patch-like sensor coupled with a wrist watch-type monitoring device to measure glucose levels. Human clinical trials of the system are presently expected to begin in early 1998. The final documentation for the License and related transactions described below was executed on October 15, 1997. Elan plc is a worldwide drug delivery and biopharmaceutical company with its principal research and manufacturing facilities in Ireland, the United States and Israel. Elan plc's shares trade on the New York, London and Dublin Stock Exchanges. JV Sub is owned 80.1 percent by the Company and 19.9 percent by Elan. Elan has invested approximately $3 million in JV Sub's Common Stock and the Company has invested $12.015 million in JV Sub's Common Stock. Elan loaned the Company the funds the Company has invested in JV Sub. The loan is evidenced by a promissory note issued by the Company (the "Note"). The Note bears interest from and after October 15, 1997 at the rate of 9% until December 31, 1997 and 12% thereafter. The Company will be calling a special meeting of its shareholders to approve (i) the exchange of the Note for the Company's convertible preferred stock, (ii) the issuance of convertible preferred stock to fund future financing obligations of JV Sub and (iii) the issuance of a warrant to the Company's agent in connection with the transactions with Elan (the "Proposal"). If the Proposal is approved, the Note will be canceled and exchanged for the Company's Series A Convertible Preferred Stock and Series B Convertible Preferred Stock. Of the total outstanding principal and accrued interest on the Note at the date of exchange, $10 million plus accrued interest on the Note will be exchanged for Series A Convertible Preferred Stock at $15.00 per share. The Series A Convertible Preferred Stock will accrue dividends at the rate of 9% per annum (compounded semi-annually). The remaining $2.015 million outstanding under the Note will be exchanged for Series B Convertible Preferred Stock at $15.00 per share, which will not accrue dividends. Each share of the Series A and Series B Convertible Preferred Stock is convertible into 10 shares of the Company's Common Stock, subject to adjustment. At the end of seven years the orginal issuance price and accrued and unpaid dividends of any Series A and Series B Convertible Preferred Stock not previously converted or redeemed will convert automatically to common stock at a conversion price equal to the lesser of $1.50 per share or 80% of the then market price. Elan plc has agreed to conduct at its expense certain research and development efforts related to the Technology until the first to occur of (i) commencement of human trials, (ii) April 1, 1998 or (iii) the devotion by Elan plc to such further research and development efforts of aggregate Elan plc resources equal to $2.5 million. Following the completion of such research efforts at Elan plc, the responsibility for funding the project shifts to JV Sub. Elan plc has agreed to make itself available to conduct other development and commercialization efforts as may be describe for it in one or more development plans to be agreed in good faith by JV Sub and Elan plc. JV Sub will be required to pay Elan plc for such further work, but if the Proposal is approved by the Company's shareholders, JV Sub would be receive a discounted price for such further work by Elan plc. JV Sub intends to obtain up to $5 million of the funds required for the further development and commercialization of the Technology in the form of the further investment in JV Sub equity of approximately $4 million by the Company and approximately $1 million by Elan. The Company and Elan have indicated their intention to make these further investments in JV Sub, provided that JV Sub's Board of Directors determines that such funds are required for development of the Technology pursuant to a development plan which has been approved by Elan. Each of the Company and Elan have reserved the right to withhold its share of the additional funding, but each has agreed not to do so unreasonably. Elan will in any event not be obligated to fund any amount in excess of 25% of the amount of such additional investments by the Company, nor to make any further investments following the expiration of 30 months after the earlier of (i) February 1, 1998 and (ii) the date of the Company's shareholders approve the Proposal. Provided that the Company's shareholders approve the Proposal, the Company intends to obtain approximately $4 million necessary for its further investment in JV Sub equity by the sale to Elan of convertible preferred stock in that amount. The agreement by EIS to purchase such Series C Preferred Stock will expire 30 months after the date the Company's shareholders approve the Proposal. The Company and JV Sub anticipate that significant levels of funding will be required to develop the Technology in addition to the funding that is described above. The additional funding will be raised through the future issuances of debt or equity by either or both of the Company and JV Sub. Subject to certain conditions, Elan has also agreed to loan JV Sub further funds to support the research, development and commercialization of the Technology after JV Sub has expended a specified amount on research and development and provided that JV Sub is not readily able to obtain such funds from other sources. Such funding would constitute senior indebtedness of JV Sub. Under the License, Elan plc has granted JV Sub an exclusive license to the Technology in North America for use in glucose monitoring. If the Company's shareholders approve the Proposal, this will become an exclusive worldwide license for such use. The continued exclusivity of JV Sub's License is contingent, on a country-by-country basis, on JV Sub's refraining from commercializing products which would compete with the products covered by the licensed Elan plc Technology. Further, the License itself is contingent, on a country-by-country basis, on JV Sub's diligently seeking and obtaining regulatory marketing approval for licensed products and on JV Sub's timely commercial launch of the licensed products in countries where such approval has been obtained. The Company believes that the License is likely to run for most of the useful life of the products that may be commercialized under it. In the event that a significant percentage of JV Sub's equity is acquired by any one of a number of specified companies identified as actual or potential competitors of Elan plc, or any other entity to which Elan plc does not consent (which consent shall not be unreasonably withheld), the license agreement may be immediately terminated at the option of Elan plc. JV Sub has paid Elan plc an initial royalty under the License equal to $15 million. In addition, JV Sub is required under the License to pay Elan plc substantial further royalties in stated amounts as certain milestones are achieved, including commencement and completion of certain product trials, the filing of applications for regulatory marketing approval, and the grant of such approval. If the Company's shareholders approve the Proposal described herein, thereby extending the territory of the License to be worldwide, the royalty payment called for upon the grant of US marketing approval will be split into two payments, one to be paid upon the grant of such US marketing approval and the other to be paid upon the grant of marketing approval in any other of certain major nations listed. Additionally, JV Sub will be required under the License to pay Elan plc a continuing royalty equal to a percentage of the net revenues from sublicenses of the Technology or from the sale by JV Sub or its sublicensees of products covered by the licensed patents or that incorporate or apply the licensed know-how. The percentage royalty will increase in stages as the aggregate net revenues in a given fiscal year exceed stated levels. These stated levels will be greater if the Company's shareholders approve the Proposal, reflecting the larger potential market for such products under the License once its territory has been expanded to be worldwide. Elan has invested $3 million in the Company in exchange for 2,727,273 shares of the Company's Common Stock and a five-year warrant to purchase an additional 1,750,000 shares of Common Stock at $2.50 per share. The Company has agreed that it will use its best efforts to cause a nominee of Elan to be elected to its Board of Directors for as long as Elan owns at least a 5 percent equity position in the Company (this level will increase to 10% in seven years). The Company's Board of Directors added Michael Sember, Elan's Vice President of Planning, Investment and Development, as a director effective October 16, 1997, the day following the closing of the transactions contemplated by the letter agreement. Elan has agreed that for a period of three years it will not (i) purchase shares or assets of the Company from third parties (ii) participate in a tender or exchange offer, merger or other business acquisition involving the Company, (iii) participate in any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company, (iv) solicit proxies or consents to vote any voting securities or the Company, (v) attempt to influence management or control of the Company or (vi) change the composition of the Company's Board of Directors; provided that such agreement will not apply if a tender offer or a proxy solicitation with respect to an acquisition proposal is made by a party which has been invited in writing by the Company or is unaffiliated with Elan. Elan has also agreed to fund $500,000 of development expenses for the development of pre-filled medication applications for the Company's needle-free injection technology. The funding will commence in the first quarter of fiscal 1998, upon written request from the Company, in the form of grants to the Company in four equal, quarterly (in arrears) payments of $125,000. For its services in connection with the transactions described above and the introduction of the Company to Elan, Raphael LLC, a management consulting company, will receive a cash payment in the amount of $150,000 and, subject to shareholder approval requested in the Proposal, a five-year warrant to purchase 100,000 shares of the Company's Common Stock at an exercise price of $0.85 per share. If shareholder approval is not received, Raphael LLC will receive an additional cash payment in an amount to be negotiated in lieu of the warrant. For the period ended September 30, 1997, the Company has taken a charge to expense for the amount of the $15 million licensing fee, of which $12.015 million is reportable against the Company's consolidated results of operations. The difference between the aggregate amount of the licensing fee and the reportable net amount by the Company represents the portion of the fee allocable to the minority interest in JV Sub. Item 7. Exhibits 10.40 License Agreement between Elan Corporation, plc and Bioject JV Subsidiary Inc. dated October 15, 1997. Confidential treatment has been requested with respect to certain portions of this exhibit pursuant to an Application for Confidential Treatment filed with the Commission under Rule 24b-2(b) under the Securities Exchange Act of 1934, as amended. 10.41* Securities Purchase Agreement between Elan International Services, Ltd. and Bioject Medical Technologies Inc. dated October 15, 1997. 10.42* Bioject Medical Technologies Inc. Registration Rights Agreement between Elan International Services, Ltd. and Bioject Medical Technologies Inc. dated October 15, 1997. 10.43* Series K Warrant to Purchase Shares of Common Stock dated October 15, 1997. 10.44 Promissory Note dated October 15, 1997 in favor of Elan International Services, Ltd. 10.45 Newco Subscription and Stockholders Agreement between Elan International Services, Ltd., Bioject Medical Technologies Inc. and Bioject JV Subsidiary Inc. dated October 15, 1997. Confidential treatment has been requested with respect to certain portions of this exhibit pursuant to an Application for Confidential Treatment filed with the Commission under Rule 24b-2(b) under the Securities Exchange Act of 1934, as amended. 10.46 Bioject JV Subsidiary Inc. Registration Rights Agreement between Elan International Services, Ltd. and Bioject JV Subsidiary Inc. dated October 15, 1997. * Previously filed with the Company's Form 8-K filed on October 31, 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BIOJECT MEDICAL TECHNOLOGIES INC. Date: November 3, 1997 By /s/ Peggy J. Miller ---------------------------------- Peggy J. Miller Vice President, Chief Financial Officer, Secretary/Treasurer EX-10.40 2 EXHIBIT 10.40 This Agreement is made the 15th day of October 1997 BY AND BETWEEN ELAN CORPORATION, plc An Irish company, of Lincoln House, Lincoln Place, Dublin 2, Ireland. AND BIOJECT JV SUBSIDIARY INC. A Corporation organised and existing under the laws of the State of Oregon having an office at 7620 S.W. Bridgeport Road, Portland, Oregon 97224, United States of America. WHEREAS - -ELAN owns and is beneficially entitled to the use of various patents, including the ELAN PATENT RIGHTS, which have been granted or are pending under the International Convention in relation to the development and production of monitoring devices and drug delivery devices and processes, and - -ELAN is knowledgeable in the development of devices and methods for directly or indirectly monitoring the concentration of glucose in a subject and has developed unique monitoring devices and methods, and - -JV SUB is desirous of entering into a licensing agreement with ELAN to further develop, manufacture and have manufactured in accordance with the terms of this AGREEMENT and to market, sell and distribute the PRODUCTS in the TERRITORY without infringing the ELAN GLUCOSE MONITOR TECHNOLOGY, and - -ELAN is prepared to license the ELAN PATENT RIGHTS in the TERRITORY to JV SUB. NOW IT IS HEREBY AGREED AS FOLLOWS: ARTICLE I : DEFINITIONS 1.1.In the present AGREEMENT and any further agreements based thereon between the Parties hereto, the following definitions shall prevail: AFFILIATE shall mean any corporation or entity controlling, controlled by or under the common control of ELAN or JV SUB as the case may be. For the purpose of this paragraph, "control" shall mean the direct or indirect ownership of at least fifty per cent (50%) of the outstanding shares or other voting rights of the subject entity to elect directors, or if not meeting the preceding criteria, any entity owned or controlled by or owning or controlling at the maximum control or ownership right permitted in the country where such entity exists. 2 AGREEMENT shall mean this agreement. BIOJECT shall mean Bioject Medical Technologies Inc. and its AFFILIATES, excluding JV SUB. 4. BUSINESS PLAN shall mean the business plan to be adopted by the Board of Directors of JV SUB and approved by ELAN (which approval shall not be unreasonably withheld or delayed) from time to time. The initial form of the BUSINESS PLAN will be adopted and approved as soon as is practicable, the Parties agreeing that both expect that such initial BUSINESS PLAN will be approved in any event not later than forty five (45) days after the EFFECTIVE DATE. 5. cGP shall mean, depending on the regulatory context, current Good Clinical Practises and/or current Good Laboratory Practises and/or current Good Manufacturing Practises. 6. COMPETING PRODUCT shall mean a product [CONFIDENTIAL PORTION OMITTED]. 7. CONFIDENTIAL INFORMATION shall mean information, material or data relating to the FIELD not generally known to the public. CONFIDENTIAL INFORMATION in tangible form disclosed hereunder shall be marked as "Confidential" at the time it is delivered to the receiving Party. CONFIDENTIAL INFORMATION disclosed orally shall be identified as confidential or proprietary when disclosed and such disclosure of CONFIDENTIAL INFORMATION shall be confirmed in writing within thirty (30) days by the disclosing Party. 8.EARLY STAGE DEVELOPMENT PLAN shall have the meaning set forth in Article III Paragraph 2. 9. EFFECTIVE DATE shall mean the 15th day of October 1997. 10. ELAN shall mean Elan Corporation, plc and any of its AFFILIATES (which for the avoidance of doubt shall exclude JV SUB and BIOJECT). 11.ELAN GLUCOSE MONITOR TECHNOLOGY shall mean the ELAN PATENT RIGHTS and/or the ELAN KNOW-HOW. 12. ELAN KNOW-HOW shall mean all scientific or technical knowledge, information or expertise, including clinical data and test results, which is not generally known to the public, developed, produced, created or acquired by or on behalf of ELAN, whether prior to or during the term of this AGREEMENT, including without limitation in the course of the development activities called for under Article III (including ELAN IMPROVEMENTS but excluding JOINT IMPROVEMENTS), relating to the FIELD, whether or not covered by any patent, copyright, design patent, trademark, trade secret or other industrial or intellectual property rights. Insofar as ELAN licenses or acquires third party technology, ELAN shall use commercially reasonable efforts to exclude or where applicable to minimise the extent of any limitations or restrictions on the inclusion of such technology in the ELAN KNOW-HOW. 13. ELAN PATENT RIGHTS shall mean all issued patents and/or pending patent applications relating to the FIELD owned or licensed by or on behalf of ELAN, whether prior to or at any time during the TERM including without limitation issued patents and /or pending applications to the extent directed to any of the ELAN KNOW-HOW (including ELAN IMPROVEMENTS but excluding JOINT IMPROVEMENTS). The current status of the ELAN PATENT RIGHTS is described by ELAN in APPENDIX A. ELAN PATENT RIGHTS shall also include all continuations, continuations-in-part, divisionals, re-issues and re-examinations of such patents and patent applications and any patents issuing thereon and extensions of any patents licensed hereunder and periods of market exclusivity. [CONFIDENTIAL PORTION OMITTED]. 14.ELAN TRADEMARK shall have the meaning set forth in Article II Paragraph 11.4. 15.FDA shall mean the United States Food and Drug Administration or any other successor agency, whose approval is necessary to market the PRODUCTS in the United States of America. 16.FIELD shall mean [CONFIDENTIAL PORTION OMITTED]. 17.IN MARKET shall mean [CONFIDENTIAL PORTION OMITTED]. 18. JOINT IMPROVEMENTS shall have the meaning set forth in Article VIII Paragraph 1. 19.JV SUB shall mean BIOJECT JV SUBSIDIARY INC. and any of its AFFILIATES, including BIOJECT. 20 JV SUB KNOW-HOW shall mean all scientific or technical knowledge, including clinical data and test results, information or expertise developed, produced, created or acquired by or on behalf of JV SUB which is not generally known to the public, which is developed by or on behalf of JV SUB whether prior to or during the TERM, to the extent it constitutes: (I) a modification of or an improvement on the ELAN GLUCOSE MONITORING TECHNOLOGY having potential application outside the FIELD and/or (II) technology that is necessary for the research, development or commercialisation of the PRODUCTS, whether or not covered by any patent, copyright, design patent, trademark, trade secret or other industrial or intellectual property rights (but excluding ELAN KNOW-HOW and JOINT IMPROVEMENTS). 21. JV SUB PATENT RIGHTS shall mean all issued patents and/or pending patent applications to the extent directed to any of the JV SUB KNOW-HOW owned or licensed by or on behalf of JV SUB (excluding ELAN PATENT RIGHTS and JOINT IMPROVEMENTS), together with all continuations, continuations-in-part, divisionals, re-issues and re-examinations of such patents and patent applications and any patents issuing thereon and extensions of any patents licensed hereunder. 22. LISTED COMPANIES shall mean the legal entities set out in APPENDIX B or any subsidiary of any such entity, where the entity directly or indirectly owns at least [CONFIDENTIAL PORTION OMITTED] of the outstanding shares or other voting rights of the subsidiary to elect directors, or if not meeting the preceding criteria, where the entity owns or controls the maximum control or ownership right permitted in the country where such subsidiary exists; provided, however, that if ELAN or any of its AFFILIATES (for the avoidance of doubt other than BIOJECT and JV SUB) at any time becomes owner to the extent of more than [CONFIDENTIAL PORTION OMITTED] of the fully-diluted equity by any of the LISTED COMPANIES, then that LISTED COMPANY shall thereupon be removed from the LISTED COMPANIES. 23. MAJOR MARKETS shall mean [CONFIDENTIAL PORTION OMITTED]. 24. NET REVENUES shall mean: 24.1. [CONFIDENTIAL PORTION OMITTED]. 24.2. [CONFIDENTIAL PORTION OMITTED]. 24.2.1. [CONFIDENTIAL PORTION OMITTED]. 24.2.2. [CONFIDENTIAL PORTION OMITTED]. 24.2.3. [CONFIDENTIAL PORTION OMITTED]. 24.2.4. [CONFIDENTIAL PORTION OMITTED]. 24.2.5 [CONFIDENTIAL PORTION OMITTED]. [CONFIDENTIAL PORTION OMITTED]. [CONFIDENTIAL PORTION OMITTED]. [CONFIDENTIAL PORTION OMITTED]. 25. Party shall mean JV SUB or ELAN, as the case may be. "Parties" shall mean JV SUB and ELAN. 26. PMA shall mean one or more of (I) a Pre-Market Application, (II) New Drug Applications or (III) 510(k) or other substantially similar applications which JV SUB shall file, including any supplements or amendments thereto, which JV SUB may file for a PRODUCT with the FDA and/or a REGULATORY AUTHORITY. 27. PRODUCT(S) shall mean all devices or any parts thereof used, developed, manufactured, offered for sale or sold by or on behalf of JV SUB within the FIELD which but for the granting of the licenses by ELAN pursuant to Article II would infringe the ELAN PATENT RIGHTS or the patents incorporated in the JOINT IMPROVEMENTS and/or which incorporate or apply the ELAN KNOW-HOW and/or the JOINT IMPROVEMENTS. [CONFIDENTIAL PORTION OMITTED]. 28. PROJECT shall mean all activity as undertaken by ELAN and JV SUB in order to develop the PRODUCT in accordance with the BUSINESS PLAN. 29. PROJECT TEAM shall mean the group to be established pursuant to Article VII. 30. REGULATORY APPROVAL shall mean (i) approval for sale and marketing of one or more of the PRODUCTS by the FDA in the United States of America, and/or (ii) approval for sale and marketing of one or more of the PRODUCTS in the other countries of the TERRITORY by the applicable REGULATORY AUTHORITIES. 31. REGULATORY AUTHORITIES shall mean one or more regulatory authorities whose approval is necessary to market the PRODUCTS in the TERRITORY outside of the United States of America where JV SUB intends to obtain REGULATORY APPROVAL. 32. RESEARCH AND DEVELOPMENT COST shall mean in the case of research and development being conducted by or on behalf of ELAN for JV SUB pursuant to Article III, the fully allocated costs thereof calculated in accordance with generally accepted Irish accounting principles consistently applied. 33. SHAREHOLDER APPROVAL shall have the meaning as defined in the Securities Purchase Agreement entered into on the EFFECTIVE DATE between BIOJECT and Elan International Services Limited. 34. SUBLICENSEE shall mean a sublicensee appointed by JV SUB or ELAN as the case may be, or where applicable a sublicensee appointed by such a sublicensee, pursuant to the provisions of the AGREEMENT. 35. TERM shall have the meaning set forth in Article IX Paragraph 1. 36. TERRITORY shall mean the United States of America, Canada and Mexico; however if SHAREHOLDER APPROVAL is granted, the TERRITORY shall be world-wide. 37. US$ shall mean United States Dollars. 1.2 In this AGREEMENT 1.2.1 the singular includes the plural and vice versa, the masculine includes the feminine and vice versa and references to natural persons include corporate bodies, partnerships and vice versa. 1.2.2 any reference to a Article or Appendix shall, unless otherwise specifically provided, be to an Article or Appendix of this AGREEMENT. 1.2.3 the headings of this AGREEMENT are for ease of reference only and shall not affect its construction or interpretation. ARTICLE II : THE LICENCE 1.1. ELAN shall remain proprietor of the ELAN GLUCOSE MONITOR TECHNOLOGY but hereby grants to JV SUB for the TERM a sole and exclusive (including as to ELAN) licence in the TERRITORY, with the right to grant sublicences pursuant to and in accordance with the provisions of Article II Paragraph 2, to research, develop, manufacture, have manufactured for JV SUB (or its permitted SUBLICENSEES), import and have imported, use, sell, offer for sale and otherwise commercialise the ELAN GLUCOSE MONITOR TECHNOLOGY, ELAN's interest in the JOINT IMPROVEMENTS in the FIELD and the PRODUCTS under the terms and conditions set out herein. 1.2. [CONFIDENTIAL PORTION OMITTED]. 1.3. [CONFIDENTIAL PORTION OMITTED]. 2.1. JV SUB may sublicense rights which incorporate the ELAN GLUCOSE MONITOR TECHNOLOGY with the prior written consent of ELAN which shall not be unreasonably withheld or delayed; provided, that such reasonableness standard shall not apply in the case of a proposed sublicence to any of the entities listed on the LISTED COMPANIES. The nature and extent of the proposed sub-licence (such as the extent of the territory of the sublicence, the material terms of the proposed sublicence, and whether the SUBLICENSEE has the rights of further sublicensing) shall be a relevant factor in determining whether or not ELAN has acted reasonably or otherwise in making such determination. JV SUB shall use its reasonable endeavours to ensure that ELAN shall have the same rights of audit and inspection vis a vis the SUBLICENSEE as ELAN has pursuant to this AGREEMENT concerning JV SUB. 2.2. Insofar as the obligations owed by JV SUB to ELAN are concerned, JV SUB shall remain responsible for all acts and omissions of any SUBLICENSEE as if such acts and omissions were by JV SUB; provided that no such acts or omissions of such SUBLICENSEE will constitute a material breach of the AGREEMENT by JV SUB for the purposes of Article IX Paragraph 2. [CONFIDENTIAL PORTION OMITTED]. 3. It is contemplated that the physical transfer of the ELAN KNOW-HOW to be licensed under this AGREEMENT and the furnishing of copies of relevant patent documentation regarding the ELAN PATENT RIGHTS shall be completed within [CONFIDENTIAL PORTION OMITTED] of the EFFECTIVE DATE (it being understood that this is without prejudice to the later physical transfer of ELAN IMPROVEMENTS thereafter developed, produced, created or acquired by or on behalf of ELAN licensed pursuant to the AGREEMENT, including the furnishing of copies of patent documentation regarding any applicable ELAN PATENT RIGHTS with respect to ELAN IMPROVEMENTS). ELAN shall, at its expense, provide all notices and reasonable assistance within such [CONFIDENTIAL PORTION OMITTED] period to JV SUB to facilitate such transfer (and later, as to any subsequent transfer of ELAN IMPROVEMENTS); provided, that in the event that JV SUB's requirements relating to such transfer are in excess of the Parties' current reasonable, good faith, expectations, the Parties shall negotiate in good faith reimbursement of ELAN's out-of-pocket expenses. 4. JV SUB shall mark or have marked the patent number on all PRODUCTS, or otherwise reasonably communicate to the trade concerning the existence of any ELAN PATENT RIGHTS for the countries within the TERRITORY in such a manner as to ensure compliance with, and enforceability under, applicable laws. Performance by JV SUB 5. [CONFIDENTIAL PORTION OMITTED]. 6. [CONFIDENTIAL PORTION OMITTED] JV SUB shall report on the ongoing sales performance of the PRODUCTS, and the exploitation of the ELAN GLUCOSE MONITOR TECHNOLOGY in the TERRITORY, [CONFIDENTIAL PORTION OMITTED]. For the avoidance of doubt, the Parties agree that all information furnished to ELAN pursuant to this Paragraph shall constitute CONFIDENTIAL INFORMATION for the purposes of this AGREEMENT. 7. When packaged, and to the extent permitted by law, a product label shall include an acknowledgement that the PRODUCT is made under licence from or manufactured by ELAN. Such acknowledgement shall take into consideration regulatory requirements and JV SUB's commercial requirements. JV SUB shall wherever possible give due acknowledgement and recognition to ELAN in all printed promotional and other material regarding the PRODUCT such as stating that the PRODUCT is under license from ELAN and that the applicable ELAN GLUCOSE MONITOR TECHNOLOGY has been applied to the PRODUCT. JV SUB shall consult with and obtain the approval of ELAN as to the format and content of the promotional and other material insofar as it relates to a description of, or other reference to, the application of the ELAN GLUCOSE MONITOR TECHNOLOGY. It shall be presumed that ELAN approved of such use unless ELAN provides written notice of disapproval of such use to JV SUB within thirty (30) days of delivery of such materials to ELAN, such approval not to be unreasonably withheld or delayed. The further consent of ELAN shall not be required where the format and content of such materials is substantively materially similar as the materials previously furnished to and approved by ELAN. 8.1. JV SUB shall effect a national commercial launch of the PRODUCT in each MAJOR MARKET within [CONFIDENTIAL PORTION OMITTED] of REGULATORY APPROVAL thereof in such MAJOR MARKET. If JV SUB does not make a national commercial launch in one or more of the MAJOR MARKETS within the [CONFIDENTIAL PORTION OMITTED], or such longer period permitted by the provisions of this Paragraph 8.1, the licences granted to JV SUB hereunder shall with thirty (30) days notice from ELAN terminate in the applicable country and ELAN shall be entitled to a licence to commercialise the PRODUCT that was given such REGULATORY APPROVAL under the JV SUB PATENT RIGHTS and the JV SUB KNOW-HOW developed, produced, created or acquired by JV SUB, in the applicable country on the terms set out in Article II Paragraph 8.3. and to the TRADEMARK on the terms set out in Article II Paragraph 11.2 for such purpose. If in JV SUB's reasonable commercial judgement, one or more of the [CONFIDENTIAL PORTION OMITTED] periods specified in this Paragraph 8.1. is insufficient, the Parties shall negotiate in good faith the applicable extension to the said [CONFIDENTIAL PORTION OMITTED] period. Notwithstanding the above, in the event that the Parties disagree whether or not JV SUB has satisfied its obligations under this AGREEMENT in any country listed above, the matter may be submitted to arbitration by either Party, and JV SUB's rights and licenses shall remain in effect until and unless the arbitrator makes a decision that JV SUB's right and license in such country should terminate. 8.2. JV SUB will use commercially reasonable efforts to file and obtain REGULATORY APPROVAL in the MAJOR MARKETS as soon as practicable. In the event of any failure by ELAN to diligently pursue any submission in any application for regulatory approval in any country which results in JV SUB's failure to obtain regulatory approval or any delay thereof, the Parties through the PROJECT TEAM shall make reasonable and appropriate adjustments to the period in which JV SUB shall have to obtain the applicable regulatory approvals. 8.3. If (x) JV SUB fails to obtain REGULATORY APPROVAL to commercialise the PRODUCT in the MAJOR MARKETS within a commercially reasonable time, as determined by the PROJECT TEAM, or (y) JV SUB fails to effect a commercial launch of the PRODUCT in the MAJOR MARKETS within the period specified in Paragraph 8.1. above JV SUB shall, at the option of ELAN, make available and transfer to ELAN all of JV SUB's data, information, applications, approvals and filings to permit ELAN to commercialise the PRODUCT in the applicable country or countries (including access to such data, information, applications, approvals and filings which is of assistance in obtaining or maintaining approvals and filings in the applicable country or countries), in consideration for a royalty of [CONFIDENTIAL PORTION OMITTED] of NET REVENUES (for which purpose the definition of NET REVENUES as set out in Article I shall apply to mutatis mutandis) of the PRODUCT, after recovery of the expenses incurred by ELAN related to the development and commercialisation of such PRODUCTS in the applicable country or countries of the TERRITORY. Such royalty shall be payable with respect to such NET REVENUES with respect to a term extending until the expiration of [CONFIDENTIAL PORTION OMITTED] starting from the EFFECTIVE DATE, or on a country by country basis for the [CONFIDENTIAL PORTION OMITTED] included in the JV SUB PATENT RIGHTS or the JOINT IMPROVEMENTS, whichever is longer. In such event ELAN shall be entitled to an exclusive licence to the JV SUB PATENT RIGHTS and the JV SUB KNOW-HOW developed, produced, created or acquired by JV SUB whether prior to or after the granting of the licence to ELAN), and a licence to the JOINT IMPROVEMENTS to the exclusion of JV SUB to commercialise the PRODUCT on the terms set out in this Paragraph and to the TRADEMARK on the terms set out in Article II, Paragraph 11.2. for such purpose. ELAN may sublicense the rights granted to it pursuant to this Paragraph to one or more SUBLICENSEES with the prior written consent of JV SUB which shall not be unreasonably withheld or delayed. Insofar as JV SUB has licensed or acquired third party technology, JV SUB shall all commercially reasonable efforts to exclude or where applicable to minimise the extent of any limitations or restrictions on its use for such purposes, and it is understood that no such limitations or restrictions shall be permitted as between BIOJECT and JV SUB. In the event that ELAN acquires a licence, the Parties shall enter into a further written licence agreement which shall include customary and reasonable terms relating to, inter alia, the timing of royalty payments to JV SUB, reporting obligations regarding net sales, audit rights of JV SUB with respect to books and records relating to net sales, and indemnity provisions, which obligations shall, unless otherwise agreed by the Parties, be substantially similar to those in this AGREEMENT with respect to commercialisation of the PRODUCTS by JV SUB. 8.4.1 JV SUB will use its commercially reasonable efforts to obtain regulatory approval to commercialise the PRODUCT in the other countries of the TERRITORY that it selects, having regard to the effort and expenditure required to obtain regulatory approval for the PRODUCT and the commercial opportunities for the PRODUCT in such other countries of the TERRITORY. 8.4.2. In the event that the Parties disagree whether JV SUB has satisfied its obligations under Paragraph 8.4.1. above with regard to one or more of such other countries of the TERRITORY, the matter may be submitted to arbitration pursuant to Article X Paragraph 14 by either Party, and JV SUB's rights and licenses shall remain in effect until and unless the arbitrator makes a decision that JV SUB's right and license in such country should terminate. 8.4.3. If JV SUB indicates to ELAN that it does not intend to obtain registration approval and commercialise the PRODUCT in a particular country or countries of the TERRITORY, or fails to commence commercialisation in any country within one hundred and (180) days after receiving the required regulatory approval therefore, ELAN shall be entitled to a licence to the JV SUB PATENT RIGHTS and the JV SUB KNOW-HOW to commercialise the PRODUCT in such countries on the terms set out in Article II Paragraph 8.3. and to the TRADEMARK on the terms set out in Article II Paragraph 11. Grant of rights to ELAN 9.1. ELAN may use the ELAN GLUCOSE MONITOR TECHNOLOGY and all technical and clinical data or improvements generated by ELAN pursuant to this AGREEMENT in connection with ELAN's commercial arrangements for the PRODUCTS in any country which ceases to be a part of the TERRITORY, or in relation to the PRODUCTS in the TERRITORY in the event of the termination of this AGREEMENT; provided that ELAN will not, prior to February 1, 1998, make any such commercial arrangements, nor any grants of any rights to any third party, anywhere in the world that would be inconsistent with the extension of the TERRITORY to be world-wide upon the SHAREHOLDER APPROVAL, with the same effect for all purposes under this AGREEMENT as if the TERRITORY had been world-wide from the EFFECTIVE DATE and at all times through the SHAREHOLDER APPROVAL. 9.2. For the avoidance of doubt, nothing in the AGEEMENT shall prevent ELAN from exploiting the ELAN GLUCOSE MONITOR TECHNOLOGY and all technical and clinical data or improvements generated by ELAN pursuant to this AGREEMENT outside the FIELD. 10.1. Subject to the confidentiality and non-disclosure provisions set out in Article X Paragraph 1, ELAN and JV SUB will share (for no additional consideration) all relevant information developed in connection with the PROJECT, relating to the development and commercialisation of the PRODUCT including pre-clinical, methods, clinical protocols and other necessary or appropriate data; it being understood that neither Party shall have any right to any intellectual property or products of the other except as expressly set forth in this AGREEMENT. 10.2. JV SUB shall be and remain the proprietor of all the JV SUB PATENT RIGHTS and JV SUB KNOW-HOW, but will grant to ELAN a non-exclusive world-wide, [CONFIDENTIAL PORTION OMITTED] license, to research, develop, package, manufacture, have manufactured for ELAN (or its permitted SUBLICENSEES), import and have imported, use, sell, offer for sale, and otherwise commercialise under the JOINT IMPROVEMENTS and under the JV SUB KNOW-HOW that is described in Clause (I) of the definition of "JV SUB KNOW-HOW" in Article I, and the JV SUB PATENT RIGHTS directed to such JV SUB KNOW-HOW outside the FIELD. The licence granted pursuant to this Paragraph shall include patent rights and know-how licensed or acquired by JV SUB from one or more third parties where JV SUB is free to license and disclose such improvements. [CONFIDENTIAL PORTION OMITTED]. ELAN may sublicense the rights granted to it pursuant to this Paragraph to one or more SUBLICENSEES with the prior written consent of JV SUB which shall not be unreasonably withheld or delayed. Trademark 11.1. JV SUB shall market the PRODUCT in the TERRITORY under a TRADEMARK, whether during the TERM or thereafter, which TRADEMARK will be owned by JV SUB. JV SUB shall take reasonable steps to register such TRADEMARK within the TERRITORY where JV SUB reasonably believes exploitation of one or more of the PRODUCTS shall occur. In the event that JV SUB does not intend to commercialise the PRODUCT and ELAN obtains a license pursuant to Article II Paragraph 8.3, ELAN shall be entitled to request JV SUB to register the TRADEMARK in such country, at ELAN's expense. 11.2. In the event that ELAN acquires a license to the JV SUB PATENT RIGHTS and the JV SUB KNOW-HOW pursuant to Article II Paragraph 8.3, JV SUB shall grant ELAN an exclusive royalty free licence to the TRADEMARK solely for use in connection with the sale of the PRODUCT for the applicable country or countries of the TERRITORY, in which event the following provisions shall apply: 11.2.1 ELAN shall as soon as it becomes aware of any infringement give to JV SUB in writing full particulars of any use or proposed use by any other person, firm or company of a trade name or trademark or mode or promotion or advertising which amounts to or might amount either to infringement of JV SUB's rights in relation to the TRADEMARK or to passing off; 11.2.2. if ELAN becomes aware that any other person, firm or company alleges that the TRADEMARK is invalid or that the use of the TRADEMARK infringes any rights of another party or that the TRADEMARK is otherwise attacked or attackable, ELAN shall immediately give to JV SUB full particulars in writing thereof and shall make no comment or admission to any third party in respect thereof; and 11.2.3. JV SUB shall have the right to conduct all proceedings relating to the TRADEMARK and shall in its sole discretion decide what action, if any, to take in respect of any infringement or alleged infringement of the TRADEMARK or passing-off or any other claim or counter-claim brought or threatened in respect of the use or registration of the TRADEMARK. Any such proceedings shall be conducted at JV SUB's expense and for its own benefit. In the event that JV SUB fails to take action in respect of any infringement or alleged infringement of the TRADEMARK or passing-off or any other claim or counter-claim brought or threatened in respect of the use or registration of the TRADEMARK, ELAN may request JV SUB to take such action at the expense of ELAN. 11.3. In the event that ELAN acquires a license to the JV SUB PATENT RIGHTS and the JV SUB KNOW-HOW pursuant to Article II Paragraph 8.3, ELAN may at its discretion advertise and promote the PRODUCT under the TRADEMARK. Except as set forth in this Paragraph 11, nothing contained in this AGREEMENT shall grant to ELAN any right, title, or interest in or to TRADEMARK, whether or not specifically recognised or perfected under applicable laws. At no time during or after the term of this AGREEMENT shall ELAN challenge or assist others to challenge any TRADEMARK, or the registration thereof or attempt to register any trademarks, marks, or trade names confusingly similar to any TRADEMARK. All representations of any TRADEMARK that ELAN intends to use shall first be submitted to JV SUB for approval (which shall not be unreasonably withheld) of design, colour, and other details, or shall be exact copies of those used by JV SUB. In addition, ELAN shall fully comply with all reasonable guidelines, if any, communicated by JV SUB concerning the use of any TRADEMARK. 11.4. ELAN grants to JV SUB an exclusive royalty free licence in the TERRITORY solely for use in connection with the sale of the PRODUCT, for the TERM to use any ELAN TRADEMARK, if any, which relates to the ELAN GLUCOSE MONITOR TECHNOLOGY applicable to the PRODUCT (the "ELAN TRADEMARK"), such as an acronym for the applicable technology applied to the PRODUCT, on the terms set forth in Article II Paragraph 11.2.1. to 11.2.3.(including the obligation not to challenge or assist others to challenge any trademark referred to in this Paragraph, or the registration thereof or attempt to register any trademarks, marks, or trade names confusingly similar to any such trademark) as applied mutatis mutandis. JV SUB shall not be obliged to use the ELAN TRADEMARK to identify the PRODUCT but at ELAN's request shall be obliged to use the ELAN TRADEMARK to identify the applicable ELAN technology embodied in the PRODUCT. For the avoidance of doubt, the Parties hereby confirm that JV SUB shall not be entitled to a licence to use any trademark owned or controlled by ELAN which identifies a product and furthermore that nothing in this Paragraph shall prevent the licensing by ELAN of the ELAN TRADEMARK outside the FIELD. 12. JV SUB hereby confirms that it intends to manufacture or procure the manufacture of the PRODUCTS in a manner which fully complies with all applicable statutes, ordinances and regulations of the United States of America and other countries with respect to the manufacture of the PRODUCTS including, but not limited to, the U.S. Federal Food, Drug and Cosmetic Act and regulations thereunder and cGP. ARTICLE III: DEVELOPMENT OF THE PRODUCTS 1. Subject to the provisions of Article III Paragraph 2 and Article III Paragraph 3, JV SUB shall be responsible for the cost of the further development, registration, manufacture and marketing of the PRODUCTS. 2. The PROJECT TEAM shall prepare and agree upon a development plan in respect of the PRODUCT, including development work to be undertaken by ELAN as soon as is practicable and in no event later than forty five (45) days after the EFFECTIVE DATE (the "EARLY-STAGE DEVELOPMENT PLAN"). The Parties agree that ELAN shall perform, and shall fund the cost of such development, pursuant to and in accordance with the EARLY-STAGE DEVELOPMENT PLAN, such development through and including the first to occur of (I) the first human clinical trials in healthy human volunteers without regard to the result thereof;(II) March 31, 1998; or (III) the devotion of ELAN to such further development pursuant to the EARLY-STAGE DEVELOPMENT PLAN of an aggregate amount of US$2.5 million (two million five hundred thousand United States dollars) (using RESEARCH AND DEVELOPMENT COST plus [CONFIDENTIAL PORTION OMITTED] as the basis for calculating the foregoing aggregate amount. 3. In addition to the research and development to be conducted pursuant to Paragraph 2 above, the Parties shall each negotiate in good faith the extent to which ELAN shall provide research and development services to JV SUB. ELAN will agree to undertake certain research and development work related to the development and commercialisation of the PRODUCTS as set forth in one or more development plans agreed to in good faith between ELAN and JV SUB. The cost of such development work shall be RESEARCH AND DEVELOPMENT COST together with an additional royalty calculated on the basis of [CONFIDENTIAL PORTION OMITTED] of the RESEARCH AND DEVELOPMENT COST; provided, that if SHAREHOLDER APPROVAL is granted, the cost of such development work shall be at the rate of RESEARCH AND DEVELOPMENT COST together with an additional royalty calculated on the basis of [CONFIDENTIAL PORTION OMITTED] of the RESEARCH AND DEVELOPMENT COST. 4. Subject to the provisions of this Article III, JV SUB shall use its reasonable efforts, as would be deemed commensurate with the achievement of its own business aims for a similar product of its own to conduct such part of the PROJECT as the Parties mutually agree shall be conducted by JV SUB. Subject to the provisions of this Article III, ELAN shall use its reasonable efforts, as would be deemed commensurate with the achievement of its own business aims for a similar product of its own, to conduct such part of the PROJECT as the Parties mutually agree that shall be conducted by ELAN. JV SUB shall carry out all clinical studies to prevailing cGP and most specifically in accordance with FDA standards and guidelines. 5. ELAN shall have no liability to JV SUB as a result of any failure or delay of the PRODUCTS to achieve one or more of the milestones set out in the PROJECT and/or to obtain the REGULATORY APPROVAL or the approval of the regulatory authorities in one or more of the other countries of the TERRITORY. JV SUB shall have no liability to ELAN as a result of any failure or delay of the PRODUCTS to obtain the REGULATORY APPROVAL or the approval of the appropriate health regulatory authorities in one or more of the countries of the TERRITORY. 6. The Parties hereby confirm that each shall undertake its respective part of the PROJECT as a collaborative effort and that the provisions of this AGREEMENT requires that each Party diligently carries out those tasks assigned to it under the PROJECT and as otherwise agreed during the course of the PROJECT. Each Party shall co-operate with the other in good faith particularly with respect to unknown problems or contingencies and shall perform its obligations in good faith and in a commercially reasonable, diligent and workmanlike manner. Each Party will update the other Party on the progress of the PROJECT at meetings of the PROJECT TEAM. 7. For the avoidance of doubt, the Parties hereby confirm that a primary objective of the PROJECT is to generate the PMA and secure REGULATORY APPROVAL for the PRODUCT from the FDA. As of the date of this AGREEMENT, it is the Parties' expectation that the body of data so generated in the PROJECT will also support such applications for regulatory approval that JV SUB shall make in the other countries of the TERRITORY. In the event however that such expectation proves unfounded or incorrect and further data is required to obtain such other approvals as are pursued by JV SUB in the other countries of the TERRITORY, JV SUB shall determine the viability of proceeding further with the regulatory application and generation of the further data requirements. ARTICLE IV : FINANCIAL PROVISIONS Initial Royalties 1.1. In consideration for the research and development of the PRODUCT by ELAN under this AGREEMENT, JV SUB shall pay to ELAN the amounts set out in Article III Paragraph 3. Subject to the provisions of Article III Paragraph 2, all research and development work conducted by ELAN pursuant to this AGREEMENT, including work conducted pursuant to Article III shall be the subject of Article IV Paragraph 1. 1.2. ELAN will keep accurate records consistent with its normal business practices, of the efforts expended by it under the PROJECT for which it is charging JV SUB, which will include the time spent by each person working on the PROJECT. Each quarter ELAN will send reports to JV SUB in order to enable JV SUB to monitor ELAN's level of effort to assure JV SUB that the committed level of effort is being applied. 1.3. If ELAN's development efforts require the use of an unaffiliated third party, ELAN will, prior to appointing such unaffiliated third party, discuss with JV SUB the activities to be undertaken by such unaffiliated third party and the terms and conditions thereof. ELAN will not proceed with such third party without the prior written approval of JV SUB, which approval shall not be unreasonably withheld. ELAN shall charge JV SUB for the time spent by its employees in administering the work conducted by such unaffiliated third parties on the basis set out in Article III Paragraph 3. ELAN shall have the right to charge JV SUB for all reasonable out of pocket expenses incurred in the provision of its obligations thereunder. Licence Royalties 2. In consideration of the rights and licence granted to JV SUB to the ELAN PATENT RIGHTS by virtue of this AGREEMENT, JV SUB shall pay to ELAN amounts as follows: 2.1. [CONFIDENTIAL PORTION OMITTED] upon the date of execution of this AGREEMENT; 2.2. [CONFIDENTIAL PORTION OMITTED] within ten (10) days of commencement of pivotal clinical trials relating to the first PRODUCT (it being a matter for the PROJECT TEAM to determine what constitutes a `pivotal' clinical trial for the purposes of this Paragraph and Paragraph 2.3. below) and the concurrent agreement between JV SUB and ELAN of the success criteria for such pivotal clinical trials, which the Parties intend will include completed ISS/ISE; 2.3. [CONFIDENTIAL PORTION OMITTED] within one hundred and twenty (120) days of the successful completion of the pivotal clinical trials referred to in Paragraph 2.2. above; provided, that JV SUB shall be liable for interest on such amount at the rate of ten per cent (10%) per year from and after the date that is sixty (60)days after such completion; 2.4. [CONFIDENTIAL PORTION OMITTED] within ten (10) days of the initial filing of a PMA to obtain REGULATORY APPROVAL for marketing of the first PRODUCT to reach such stage with the FDA; and 2.5. [CONFIDENTIAL PORTION OMITTED] within one hundred and twenty (120) days of the first REGULATORY APPROVAL for the first PRODUCT to reach such stage by the FDA provided, that JV SUB shall be liable for interest on such amount at the rate of ten per cent (10%) per year from and after the date that is sixty (60) days after such approval; except that, in the event that SHAREHOLDER APPROVAL is obtained, the following payments shall be due and owing 2.5.1. [CONFIDENTIAL PORTION OMITTED] within one hundred and twenty (120) days of the first REGULATORY APPROVAL by the FDA for the first PRODUCT to reach such stage in the United States of America, provided, that JV SUB shall be liable for interest on such amount at the rate of ten per cent (10%) per year from and after the date that is sixty (60) days after such approval; and 2.5.2. [CONFIDENTIAL PORTION OMITTED] within one hundred and twenty (120) days of the approval by a REGULATORY AUTHORITY other than the FDA for the first PRODUCT to reach such stage in one or more MAJOR MARKETS other than the United States of America, provided, that JV SUB shall be liable for interest on such amount at the rate of ten per cent (10%) per year from and after the date that is sixty (60) days after such approval. All such payments are due upon achievement of the milestone event and are payable by JV SUB within the number of days specified above following the occurrence of the milestone, of which event JV SUB will promptly notify ELAN and ELAN will send an invoice to JV SUB for the corresponding milestone payment. The foregoing licence royalties shall be non-recoverable by JV SUB. Royalty on NET REVENUES 3.1. In consideration of the license of the ELAN PATENT RIGHTS to JV SUB, the royalties payable by JV SUB to ELAN shall calculated by reference to the NET REVENUES generated by JV SUB or its sublicensees on or after the EFFECTIVE DATE. 3.2. The royalty payable shall vary from [CONFIDENTIAL PORTION OMITTED] to [CONFIDENTIAL PORTION OMITTED] of NET REVENUES based upon the following ([CONFIDENTIAL PORTION OMITTED] amounts refer to royalty rates, and [CONFIDENTIAL PORTION OMITTED] amounts refer to NET REVENUES in a fiscal year): 3.2.1. [CONFIDENTIAL PORTION OMITTED] on the first [CONFIDENTIAL PORTION OMITTED], 3.2.2. [CONFIDENTIAL PORTION OMITTED] on the amount between [CONFIDENTIAL PORTION OMITTED] and [CONFIDENTIAL PORTION OMITTED], and 3.2.3. [CONFIDENTIAL PORTION OMITTED] on the amount in excess of [CONFIDENTIAL PORTION OMITTED]; provided, that in the event of SHAREHOLDER APPROVAL, such royalties shall be as follows: 3.2.4. [CONFIDENTIAL PORTION OMITTED] on the first [CONFIDENTIAL PORTION OMITTED], 3.2.5. [CONFIDENTIAL PORTION OMITTED] on the amount between [CONFIDENTIAL PORTION OMITTED] and [CONFIDENTIAL PORTION OMITTED], and 3.2.6. [CONFIDENTIAL PORTION OMITTED] on the amount in excess of [CONFIDENTIAL PORTION OMITTED]. Royalty Payments, Reports and Records 4.1. Within [CONFIDENTIAL PORTION OMITTED] of the end of each quarter in which NET REVENUES have been earned, JV SUB shall notify ELAN of the NET REVENUES for that preceding quarter. Payments shown by each calendar quarter report to have accrued shall be due on the date such report is due. All payments due hereunder shall be made to the designated bank account of ELAN in accordance with such timely written instructions as ELAN shall from time to time provide. 4.2. JV SUB shall keep and shall cause its AFFILIATES and sublicensees to keep true and accurate records of sales of PRODUCTS, other transactions giving rise to NET REVENUES, and the royalties payable to ELAN under Article IV hereof and shall deliver to ELAN a written statement thereof within [CONFIDENTIAL [PORTION OMITTED] days following the end of each calendar quarter in which NET REVENUES have been earned (or any part thereof in the last calendar quarter of this AGREEMENT in which NET REVENUES are earned) for such calendar quarter. Said written statements shall set forth (I) for each PRODUCT [CONFIDENTIAL PORTION OMITTED], the calculation of NET REVENUES from gross revenues during that calendar quarter, the applicable percentage royalty rates, and a computation of such royalties due and (II) such details of the transactions as are relevant to the calculation of NET REVENUES. 4.3. All payments due hereunder shall be made in United States Dollars. Payments due on NET REVENUES received in a currency other than United States Dollars shall first be calculated in the foreign currency and then converted to United States Dollars on the basis of the average of the exchange rates in effect for the purchase of United States Dollars with such foreign currency quoted in the Wall Street Journal (or comparable publication if not quoted in the Wall Street Journal) with respect to the currency of the country or origin of such payment for the last business day of each month for which the payment is being made. 4.4. ELAN shall have the right to have access, on reasonable notice, to JV SUB's or JV SUB's SUBLICENSEES' financial documentation and records during reasonable business hours for the purpose of verifying the royalties payable as provided in this AGREEMENT for the two preceding years. This right may not be exercised more than once in any calendar year, and once a calendar year is audited it may not be reaudited. For the avoidance of doubt, the Parties agree that all information furnished to ELAN pursuant to this Paragraph shall constitute CONFIDENTIAL INFORMATION for the purposes of this AGREEMENT. 4.5. Any adjustment required by such inspection shall be made within thirty (30) days of the agreement of the Parties or, if not agreed, upon the determination of an arbitrator to whom any dispute under this Paragraph shall be submitted to arbitration pursuant to Article X Paragraph 14. If the adjustment payable to ELAN is greater than [CONFIDENTIAL PORTION OMITTED] of the amount paid for the relevant period, then the cost to ELAN for the inspection, and if applicable the arbitration, shall be paid by JV SUB; [CONFIDENTIAL PORTION OMITTED]. In addition, JV SUB shall pay interest to ELAN [CONFIDENTIAL PORTION OMITTED] (applicable as of the date on which payment should have been made pursuant to Article IV Paragraph 3), from the date on which payment should have been made pursuant to Article IV Paragraph 3 until the date of payment. 4.6. Subject to the provisions of Article IV Paragraphs 2.3 and 2.5, JV SUB shall pay interest to ELAN [CONFIDENTIAL PORTION OMITTED] (applicable as of the date on which payment should have been made pursuant to the applicable provisions of this AGREEMENT) from the date on which payment should have been made pursuant to the applicable provision until the date of payment. ARTICLE V REGISTRATION OF THE PRODUCTS 1. During the TERM, JV SUB shall be responsible for filing and prosecuting all PMAs and other applications for regulatory approvals. JV SUB or its sublicensees shall file the PMAs with the FDA and will use its reasonable efforts in prosecuting said PMA to approval. JV SUB shall maintain at its own cost the PMAs with the FDA for the term of this AGREEMENT. JV SUB hereby agrees to provide to ELAN at ELAN's own cost access to such PMAs as ELAN reasonably requests. It is not the intention of the Parties that JV SUB shall furnish to ELAN a copy of each PMA. [CONFIDENTIAL PORTION OMITTED]. During the PMA registration procedure, JV SUB shall keep ELAN promptly and fully advised of JV SUB's registration activities, progress and procedures. For the avoidance of doubt, the Parties agree that all information furnished to ELAN pursuant to this Paragraph shall constitute CONFIDENTIAL INFORMATION for the purposes of this AGREEMENT. 2. It is hereby acknowledged that there are inherent uncertainties involved in the development and registration of pharmaceutical products with the FDA or any other regulatory body in the TERRITORY insofar as obtaining approval is concerned and such uncertainties form part of the business risk involved in undertaking the form of commercial collaboration as set forth in this AGREEMENT. 3. JV SUB shall indemnify and hold harmless ELAN, its agents and employees from and against all claims, damages, losses, liabilities and expenses to which ELAN, its agents, and employees may become subject related to or arising out of JV SUB's bad faith, gross negligence or intentional misconduct in connection with the filing or maintenance of the PMA and its foreign counterparts. ARTICLE VI: REPRESENTATIONS, WARRANTIES 1. ELAN represents to JV SUB the following: 1.1. ELAN is duly and validly existing in the jurisdiction of its incorporation and each other jurisdiction in which the conduct of its business requires such qualification, and is in compliance with all applicable laws, rules, regulations or orders relating to its business and assets; 1.2. ELAN has full corporate authority to execute and deliver this AGREEMENT and to consummate the transactions contemplated hereby; this AGREEMENT has been duly executed and delivered by ELAN and constitutes the legal and valid obligations of ELAN and is enforceable against ELAN in accordance with its terms and the execution, delivery and performance of this AGREEMENT and the transactions contemplated hereby and will not violate or result in a default under or creation of lien or encumbrance under ELAN's memorandum and articles of association or other organic documents, any material agreement or instrument binding upon or affecting ELAN or its properties or assets or any applicable laws, rules, regulations or orders affecting ELAN or its properties or assets; 1.3. ELAN is not in material default of its memorandum and articles of association or similar organic documents, any applicable material laws or regulations or any material contract or agreement binding upon or affecting it or its properties or assets and the execution, delivery and performance of this AGREEMENT and the transactions contemplated hereby will not result in any such violation; 1.4. ELAN represents and warrants that ELAN is the sole and exclusive owner or licensee of, or controls all right, title and interest to the ELAN GLUCOSE MONITOR TECHNOLOGY;ELAN has the right to grant the licenses granted herein, and the ELAN GLUCOSE MONITOR TECHNOLOGY is free and clear of any lien, encumbrances, security interest or restriction on the licence granted herein; ELAN will not grant during the term of this AGREEMENT, any right, license or interest in and to the ELAN GLUCOSE MONITOR TECHNOLOGY or the PRODUCTS, or any portion thereof, inconsistent with the license granted herein, nor, as provided in Article II Paragraph 9.1, inconsistent with the expansion of the TERRITORY upon the SHAREHOLDER APPROVAL; and to the best of ELAN's knowledge and belief there are no pending or threatened adverse actions, suits, investigations, claims or proceedings brought by one or more Third Parties related to the ELAN GLUCOSE MONITOR TECHNOLOGY as of the EFFECTIVE DATE; and 1.5. ELAN represents and warrants that the execution of this AGREEMENT and the full performance and enjoyment of the rights of JV SUB under this AGREEMENT will not breach or in any way be inconsistent with the terms and conditions of any licence, contract, understanding or agreement, whether express, implied, written or oral between ELAN and any third party. 2. JV SUB represents to ELAN the following: 2.1. JV SUB is duly and validly existing in good standing in the jurisdiction of its incorporation and each other jurisdiction in which the conduct of its business requires such qualification, and JV SUB is in compliance with all applicable laws, rules, regulations or orders relating to its business and assets; 2.2. JV SUB has full corporate authority to execute and deliver this AGREEMENT and to consummate the transactions contemplated hereby; this AGREEMENT has been duly executed and delivered and constitutes the legal and valid obligations of JV SUB and is enforceable against JV SUB in accordance with its terms; and the execution, delivery and performance of this AGREEMENT and the transactions contemplated hereby will not violate or result in a default under or creation of lien or encumbrance under JV SUB's certificate of incorporation, by-laws or other organic documents, any material agreement or instrument binding upon or affecting JV SUB or its properties or assets or any applicable laws, rules, regulations or orders affecting JV SUB or its properties or assets; 2.3. JV SUB is not in default of its charter or by-laws, any applicable laws or regulations or any material contract or agreement binding upon or affecting it or its properties or assets and the execution, delivery and performance of this letter agreement and the transactions contemplated hereby will not result in any such violation; and 2.4. JV SUB represents and warrants that it has not granted any option, licence, right or interest to any third party which would conflict with the terms of this AGREEMENT. 3. JV SUB represents and warrants that the PRODUCTS shall be manufactured, packaged, distributed and sold in accordance with all regulations and requirements of the FDA and foreign regulatory authorities including, without limitation, the cGP regulations which apply to the manufacture, storage, packaging and supply of the PRODUCT. JV SUB represents and warrants that the PRODUCTS shall not be adulterated or mis-branded as defined by the Federal Food, Drug and Cosmetic Act, (or applicable foreign law) and shall not be a product which would violate any section of such Act if introduced in interstate commerce except to the extent due to components or materials manufactured or designed by ELAN (which components and material have been properly used and applied in accordance with ELAN's specifications or other written instructions or labels) or due to the negligence or wilful misconduct of ELAN. 4. JV SUB is each fully cognisant of all applicable statutes, ordinances and regulations of the United States of America with respect to the manufacture of the PRODUCTS including, but not limited to, the U.S. Federal Food, Drug and Cosmetic Act and regulations thereunder and cGP. JV SUB shall manufacture or procure the manufacture the PRODUCTS in conformity with the REGULATORY APPROVALS and where applicable the Drug Master File and in a manner which fully complies with all United States of America and foreign statutes, ordinances, regulations and practices. 5. ELAN shall indemnify, defend and hold harmless JV SUB and its officers, directors, employees and agents from all actions, losses, claims, demands, damages, costs and liabilities (including reasonable attorneys' fees) due to third party claims to which JV SUB is or may become subject insofar as they arise out of or are alleged or claimed to arise out of (i) any breach by ELAN of any of its obligations under this AGREEMENT, and (ii) any breach of a representation or warranty of ELAN made in this AGREEMENT and (iii) any activities conducted by ELAN in connection with the PROJECT, except to the extent due to the negligence or wilful misconduct of JV SUB. 6. JV SUB shall indemnify, defend and hold harmless ELAN and its officers, directors, employees and agents from all actions, losses, claims, demands, damages, costs and liabilities (including reasonable attorneys' fees) due to third party claims to which ELAN is or may become subject insofar as they arise out of or are alleged or claimed to arise out of (i) any breach by JV SUB of any of its obligations under the AGREEMENT, (ii) any breach of any representation or warranty of JV SUB made in this AGREEMENT, and (iii) any activities conducted by JV SUB in connection with the PROJECT, except to the extent due to the negligence or wilful misconduct of ELAN. 7. JV SUB shall indemnify, defend and hold harmless ELAN and its officers, directors, employees and agents from all actions, losses, claims, demands, damages, costs and liabilities (including reasonable attorneys' fees) due to third party claims to which ELAN is or may become subject insofar as they arise out of or are alleged or claimed to arise out of activities conducted by JV SUB in the development, manufacture, transport, packaging, storage, handling, distribution, promotion, marketing, offer for sale or sale of the PRODUCT, that was caused by the negligence or wrongful acts or omissions on the part of JV SUB. 8. ELAN represents and warrants that the manufacture, use, offer for sale, or sale of the devices and methods exclusively disclosed in either the ELAN PATENT RIGHTS or the application of the ELAN KNOW-HOW as documented in the transfer of information to JV SUB as of the EFFECTIVE DATE does not infringe any patent owned by a third party in the TERRITORY. 9. As a condition of obtaining an indemnity in the circumstances set out above or elsewhere in the AGREEMENT, the Party seeking an indemnity shall: 9.1. fully and promptly notify the other Party of any claim or proceeding, or threatened claim or proceeding; 9.2. permit the indemnifying Party to take full care and control of such claim or proceeding; 9.3. reasonably assist in the investigation and defence of such claim or proceeding; 9.4. not compromise or otherwise settle any such claim or proceeding without the prior written consent of the other Party, which consent shall not be unreasonably withheld; and 9.5. take all reasonable steps to mitigate any loss or liability in respect of any such claim or proceeding. 10. Notwithstanding anything to the contrary in this AGREEMENT, ELAN and JV SUB shall not be liable to the other for any consequential or incidental loss or damage (whether for loss of profit or otherwise) by reason of any representation or warranty, condition or other term or any duty of common law, or under the express or implied terms of this AGREEMENT, and whether occasioned by the negligence of the respective Parties, their employees or agents or otherwise. ARTICLE VII: PROJECT TEAM 1. The Parties have agreed to establish a PROJECT TEAM which shall consist of a chief representative from each Party together with such additional business and development personnel from each Party who are deemed necessary to accomplish the work of the PROJECT. Unless both Parties agree otherwise, commencing on the EFFECTIVE DATE, the PROJECT TEAM shall meet at least once each calendar quarter, whether in person or by video conference; provided that the PROJECT TEAM shall meet face to face at least once in every calendar year. The PROJECT TEAM shall meet alternatively at the offices of ELAN and JV SUB or as otherwise agreed by the Parties. [CONFIDENTIAL PORTION OMITTED]. 2. At and between meetings of the PROJECT TEAM each Party shall keep the other fully and regularly informed as to its progress with its respective obligations. In addition, ELAN and JV SUB will both furnish a quarterly project update in relation to the research development, regulatory and clinical work being conducted in relation to the PRODUCT to designated personnel of the Parties. 3. The PROJECT TEAM shall review the manufacturing costs and other costs as well as the regulatory and commercialisation strategy for the PRODUCT on an ongoing basis. The PROJECT TEAM may suggest alternative strategies and attempt to resolve any conflicts or differences of opinion between the Parties as to how to proceed. 4. The PROJECT TEAM shall not be empowered to alter the terms of this AGREEMENT. The PROJECT TEAM shall continue to function and meet both prior to and for a period of one year after the launch of the PRODUCT in the first MAJOR MARKET, or for such additional period as may be agreed. 5. The PROJECT TEAM may suggest alternative strategies and shall attempt to resolve any conflicts or differences of opinion between the Parties as to how to proceed. Any matter as to which the PROJECT TEAM is unable to reach agreement may be submitted by either Party to binding arbitration for final resolution pursuant to Article X Paragraph 14, or as otherwise agreed, except with respect to matters for which JV SUB has authority to make final decisions. ARTICLE VIII PATENTS [CONFIDENTIAL PORTION OMITTED] 1. [CONFIDENTIAL PORTION OMITTED] [CONFIDENTIAL PORTION OMITTED] 2. [CONFIDENTIAL PORTION OMITTED]. 2.1. Both Parties shall timely inform the other in writing of any improvement or development made by such Party relating, respectively, to the ELAN GLUCOSE MONITOR TECHNOLOGY, the JV SUB KNOW-HOW, and/or the JOINT IMPROVEMENTS so that any patent protection that may be available for any such improvement or development is not compromised. 2.2. ELAN shall prepare, prosecute and maintain all initially licensed patent applications and issued patents as set forth in APPENDIX B, and all improvements created or developed solely by employees of ELAN relating to the FIELD ("ELAN IMPROVEMENTS") made pursuant to the AGREEMENT or otherwise. With respect to the ELAN IMPROVEMENTS, ELAN shall have the right to apply for patent protection in its own name and at its own expense. Should it however be doubtful whether a patent may be obtained, then ELAN may at its sole discretion decide not to apply for a patent in one or more countries of the TERRITORY. If such a patent is obtained, such a patent shall constitute ELAN PATENT RIGHTS and JV SUB shall have for the duration of this AGREEMENT a right thereunder to have manufactured pursuant to the terms of this AGREEMENT, and to prepare, use and sell the PRODUCT as specified in Article II Paragraph 1. ELAN shall keep JV SUB fully informed as to the status of such patent matters relating to the ELAN PATENT RIGHTS. With respect to the ELAN IMPROVEMENTS, ELAN shall timely apprise JV SUB of the status of any such prosecution and, in the event ELAN shall decide not to seek patent protection for any ELAN IMPROVEMENTS and such ELAN IMPROVEMENTS are not otherwise encumbered by licences to one or more third parties (it being agreed that ELAN shall use commercially reasonable efforts to exclude or where applicable to minimise the extent of any such encumbrances), JV SUB shall have the option to take responsibility for such prosecution and/or maintenance. 2.3. JV SUB shall prepare, prosecute and maintain all patents applications and issued patents relating to all (I) JV SUB KNOW-HOW and (II) JOINT IMPROVEMENTS that relate to the FIELD. With respect to JV SUB KNOW-HOW, JV SUB shall timely apprise ELAN of the status of any such prosecution and, in the event JV SUB shall decide not to seek patent protection for any JV SUB KNOW-HOW, ELAN shall have the option to take control of such prosecution. In the event that ELAN shall determine, in good faith, that any JOINT IMPROVEMENT predominantly relates to an area other than the FIELD, ELAN shall have the option to take control of the preparation, prosecution and maintenance of patent protection directed to such JOINT IMPROVEMENTS. In the event that ELAN shall exercise such option, ELAN shall have due regard to JV SUB's wishes regarding the patent prosecution strategy for such JOINT IMPROVEMENTS. In the event that ELAN does not exercise such right, JV SUB shall have the right to take responsibility for the preparation, prosecution and maintenance of patent protection directed to such JOINT IMPROVEMENTS. In the event that any JOINT IMPROVEMENT predominantly relates to the FIELD but also relates to an area other than the FIELD, JV SUB shall have due regard to ELAN's wishes as regards the patent prosecution strategy for such JOINT IMPROVEMENTS. [CONFIDENTIAL PORTION OMITTED] 3. [CONFIDENTIAL PORTION OMITTED]. 4. [CONFIDENTIAL PORTION OMITTED]. [CONFIDENTIAL PORTION OMITTED]. 5.1.1. [CONFIDENTIAL PORTION OMITTED]. 5.1.2. [CONFIDENTIAL PORTION OMITTED]. 5.1.3. [CONFIDENTIAL PORTION OMITTED]. 5.1.4. [CONFIDENTIAL PORTION OMITTED]. 5.2. [CONFIDENTIAL PORTION OMITTED]. 6. [CONFIDENTIAL PORTION OMITTED]. ARTICLE IX: TERM AND TERMINATION This AGREEMENT is concluded for a period commencing as of the date of this AGREEMENT and shall expire [CONFIDENTIAL PORTION OMITTED] starting from the EFFECTIVE DATE, or on a country by country basis for the [CONFIDENTIAL PORTION OMITTED] included in the ELAN PATENT RIGHTS or the JOINT IMPROVEMENTS, whichever is longer ("the TERM"). 2. In addition to the rights of early or premature termination provided for elsewhere in this AGREEMENT, in the event that any of the terms or provisions hereof are incurably breached by either Party, the non-breaching Party may immediately terminate this AGREEMENT by written notice. An incurable breach shall be committed when either Party is dissolved, liquidated, discontinued, becomes insolvent, or when any proceeding is filed or commenced by either Party under bankruptcy, insolvency or debtor relief laws (and not dismissed within ninety (90) days). Subject to the other provisions of this AGREEMENT, in the event of any other material breach, the non-breaching Party may terminate this AGREEMENT by the giving of written notice to the breaching Party that this AGREEMENT will terminate on the ninetieth (90th) day from notice unless cure is sooner effected. If the breaching Party has proposed a course of action to rectify the breach and is acting in good faith to rectify same but has not cured the breach by the ninetieth (90th) day, the said period shall be extended by such period as is reasonably necessary to permit the breach to be rectified. In the event that the breaching Party disputes the validity of the right of the non-breaching Party to terminate the AGREEMENT pursuant to this Paragraph, either Party may refer the dispute to an arbitrator pursuant to the provisions of Article X Paragraph 14. Pending the determination of the arbitrator, neither Party may regard the AGREEMENT as having been terminated and in particular shall not allege or claim to any third party that the AGREEMENT has been terminated pursuant to this Paragraph. 3. Upon termination of the AGREEMENT: 3.1. any sums that were due from JV SUB to ELAN prior to the exercise of the right to terminate this AGREEMENT, shall be paid in full within sixty (60) days of termination of this AGREEMENT; 3.2. all confidentiality provisions set out in this AGREEMENT shall remain in full force and effect for a period of [CONFIDENTIAL PORTION OMITTED]; 3.3. all representations and warranties shall insofar are appropriate remain in full force and effect; 3.4. the rights of inspection and audit shall continue in force for the period referred to in the relevant provisions of this AGREEMENT; 3.5. termination of this AGREEMENT for any reason shall not release any Party hereto from any liability which, at the time of such termination, has already accrued to the other Party or which is attributable to a period prior to such termination nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this AGREEMENT; 3.6. except as is necessary to enable ELAN to exercise the licenses granted by JV SUB to ELAN pursuant to Article II Paragraph 8.3, Article II Paragraph 10.2. and Article II Paragraph 11, JV SUB and ELAN shall promptly return to the other Party all CONFIDENTIAL INFORMATION received from the other Party (except one copy of which may be retained for archival purposes); 3.7. JV SUB and its SUBLICENSEES shall have an ongoing right to sell or otherwise dispose of the stock of any PRODUCTS on hand as of the date of termination of the AGREEMENT, which such sale shall be subject to Article IV and the other applicable terms of this AGREEMENT. The foregoing provisions of this Paragraph shall be subject to the provisions of such agreement or agreements as ELAN and one or more SUBLICENSEES conclude pursuant to Article II Paragraph 2.2; 3.8. in the event this AGREEMENT is terminated by ELAN pursuant to Article IX Paragraph 2, the licences granted by ELAN to JV SUB shall terminate and ELAN shall thenceforth be entitled to exploit the ELAN GLUCOSE MONITOR TECHNOLOGY, the JV SUB PATENT RIGHTS, the JV SUB KNOW-HOW together with any JV SUB IMPROVEMENTS, including the data, information, regulatory applications, regulatory approvals, pricing and reimbursement approvals and the TRADEMARK to enable ELAN to commercialise the PRODUCTS in which event the royalty obligations set forth in Article II Paragraph 8.3. shall continue for the term stated in that Paragraph; provided that the foregoing provisions shall be subject to the provisions of Article II Paragraph 2.2. and any agreements entered into pursuant to the said Paragraph; and in the event of termination of this AGREEMENT, the licences granted by JV SUB to the JV SUB PATENT RIGHTS and the JV SUB KNOW-HOW and the JOINT IMPROVEMENTS pursuant to Article II Paragraph 8.3. and to the TRADEMARK pursuant to Article II Paragraph 11 shall continue after the date of the termination of this AGREEMENT until the [CONFIDENTIAL PORTION OMITTED] in the JV SUB PATENT RIGHTS on a country by country basis, or [CONFIDENTIAL PORTION OMITTED] after the EFFECTIVE DATE (whichever is later) and thereafter the licence shall be fully paid up and irrevocable; and 3.9. Articles I, Article II Paragraphs 2.2, 8.3, 9, 10.2, 11, Article VI, Article VIII Paragraphs 1, 5 and 6, Article IX and Article X shall survive the termination or expiration of this AGREEMENT for any reason. ARTICLE X: SUNDRY CLAUSES Secrecy 1.1. Each of the Parties agrees, during the TERM, to hold in confidence and not disclose CONFIDENTIAL INFORMATION to any third parties, except to the extent required by applicable law or administrative or judicial process. Each Party may make such disclosure to its directors, officers and agents and, in the case of JV SUB, its potential and actual sublicensees and other parties to whom such disclosure is appropriate to enable JV SUB to conduct its regular business (each of whom shall be bound by JV SUB's customary confidential disclosure agreements), who shall be informed of such confidentiality obligation and for whose breach the disclosing Party shall be responsible. 1.2. Subject to the provisions of Paragraph 1.1, any information, whether written or oral (oral information shall be reduced to writing within one month by the Party giving the oral information and the written form shall be furnished to the other Party) pertaining to the ELAN GLUCOSE MONITOR TECHNOLOGY or the PRODUCTS that has been or will be communicated or delivered by ELAN to JV SUB, and any information from time to time communicated or delivered by JV SUB to ELAN, including, without limitation, trade secrets, business methods, and cost, supplier, manufacturing and customer information, shall be treated by JV SUB and ELAN, respectively, as CONFIDENTIAL INFORMATION, and shall not be disclosed or revealed to any third party whatsoever or used in any manner except as expressly provided for herein; provided, however, that such CONFIDENTIAL INFORMATION shall not be subject to the restrictions and prohibitions set forth in this section to the extent that such CONFIDENTIAL INFORMATION: 1.2.1. is available to the public in public literature or otherwise, or after disclosure by one Party to the other becomes public knowledge through no default of the Party receiving such information; or 1.2.2. was known to the Party receiving such information prior to the receipt of such information by such Party, whether received before or after the date of this AGREEMENT; or 1.2.3. is obtained by the Party receiving such information from a third party not subject to a requirement of confidentiality with respect to such information; or 1.2.4. is required to be disclosed pursuant to: (A) any order of a court having jurisdiction and power to order such information to be released or made public; or (B) other requirement of law; provided that if the receiving Party becomes legally required to disclose any CONFIDENTIAL INFORMATION, the receiving Party shall give the disclosing Party prompt notice of such fact so that the disclosing Party may obtain a protective order or other appropriate remedy concerning any such disclosure. The receiving Party shall fully cooperate with the disclosing Party in connection with the disclosing Party's efforts to obtain any such order or other remedy. If any such order or other remedy does not fully preclude disclosure, the receiving Party shall make such disclosure only to the extent that such disclosure is legally required; or 1.2.5. is independently developed by or for the Party by persons not having access to the CONFIDENTIAL INFORMATION of the other Party. 1.3. Each Party shall take all such precautions as it normally takes with its own CONFIDENTIAL INFORMATION to prevent any improper disclosure of such CONFIDENTIAL INFORMATION to any third party; provided, however, that such CONFIDENTIAL INFORMATION may be disclosed within the limits required to obtain any authorisation from the FDA or any other REGULATORY AUTHORITY or, with the prior written consent of the other Party, which shall not be unreasonably withheld or delayed, or as may otherwise be required in connection with the purposes of this AGREEMENT. 1.4. JV SUB agrees that it will not use, directly or indirectly, the ELAN GLUCOSE MONITOR TECHNOLOGY, or other CONFIDENTIAL INFORMATION disclosed to JV SUB or obtained from ELAN pursuant to this AGREEMENT, other than as expressly provided herein. ELAN agrees that it will not use, directly or indirectly, any JV SUB KNOW-HOW, JV SUB PATENT RIGHTS, or other CONFIDENTIAL INFORMATION disclosed to ELAN or obtained from JV SUB pursuant to this AGREEMENT, other than as expressly provided herein. 1.5. The Parties shall not (a) disclose to any person or entity, publicly or privately, this AGREEMENT or the substance of the transactions contemplated hereby without the prior written consent of the other Party; provided, that the foregoing covenant shall not be applicable to the extent required by applicable law or judicial or administrative process or periodic SEC reports filed by ELAN or BIOJECT in connection herewith, so long as the text thereof shall have been provided to the non disclosing Party and such non disclosing Party shall have approved the text thereof, which consent shall not be unreasonably withheld or delayed. 2. Assignments/ Subcontracting JV SUB shall not be permitted to assign any of its rights under the AGREEMENT without the prior written consent of ELAN, which consent will not be unreasonably withheld or delayed; provided, that such reasonableness standard shall not apply in the case of a proposed assignment or sublicense to any of the entities listed on the LISTED COMPANIES. ELAN may not assign to an unaffiliated third party (other than by operation of law in the event of an acquisition of ELAN, or a merger or similar transaction) its rights under this AGREEMENT without the prior written consent of JV SUB, which may be withheld in JV SUB's sole discretion. ELAN may assign all or part of its right and interest to an AFFILIATE without the prior written consent of JV SUB. 3. Certain changes of Control. In the event that JV SUB (or an interest therein in excess of [CONFIDENTIAL PORTION OMITTED] of the fully-diluted equity) is acquired (by merger, sale of assets or stock or otherwise) by (a) any of the LISTED COMPANIES or (b) any other entity to which ELAN does not consent, which consent shall not be unreasonably withheld or delayed, such reasonableness to be determined by reference to JV SUB's and/or its controlling persons' intention to continue diligent development and commercialisation of the Products, at the option of ELAN, the AGREEMENT shall be immediately terminated, without any further liability on the part of ELAN to JV SUB; provided that in such event the provisions of Article II Paragraph 8.3. and Article IX Paragraph 3.8. shall apply. 4. Parties bound This AGREEMENT shall be binding upon and enure for the benefit of Parties hereto, their successors and permitted assigns. 5. Severability If any provision in this AGREEMENT is agreed by the Parties to be, or is deemed to be, or becomes invalid, illegal, void or unenforceable under any law that is applicable hereto, (i) such provision will be deemed amended to conform to applicable laws so as to be valid and enforceable or, if it cannot be so amended without materially altering the intention of the Parties, it will be deleted, with effect from the date of such agreement or such earlier date as the Parties may agree, and (ii) the validity, legality and enforceability of the remaining provisions of this AGREEMENT shall not be impaired or affected in any way. 6. Force Majeure Neither Party to this AGREEMENT shall be liable for delay in the performance of any of its obligations hereunder if such delay results from causes beyond its reasonable control, including, without limitation, acts of God, fires, strikes, acts of war, or intervention of a Government Authority, non availability of raw materials, but any such delay or failure shall be remedied by such Party as soon as practicable. 7. Relationship of the Parties Nothing contained in this AGREEMENT is intended or is to be construed to constitute ELAN and JV SUB as partners or joint venturers or either Party as an employee of the other. Neither Party hereto shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertaking with any third party. 8. Amendments No amendment, modification or addition hereto shall be effective or binding on either Party unless set forth in writing and executed by a duly authorised representative of both Parties. 9. Waiver No waiver of any right under this AGREEMENT shall be deemed effective unless contained in a written document signed by the Party charged with such waiver, and no waiver of any breach or failure to perform shall be deemed to be a waiver of any future breach or failure to perform or of any other right arising under this AGREEMENT. 10. Headings The section headings contained in this AGREEMENT are included for convenience only and form no part of the agreement between the Parties. Save as otherwise provided herein, references to articles, paragraphs, clauses and appendices are to those contained in this AGREEMENT. 11. No effect on other agreements No provision of this AGREEMENT shall be construed so as to negate, modify or affect in any way the provisions of any other agreement between the Parties unless specifically referred to, and solely to the extent provided, in any such other agreement. 12. Applicable Law This AGREEMENT (a) shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. 13. Notice 13.1. Any notice to be given under this AGREEMENT shall be sent in writing in English by registered airmail or telefaxed to: - - ELAN at Elan Corporation, plc. Lincoln Place, Lincoln House, Dublin 2 Ireland. Attention: President, Elan Pharmaceutical Technologies, a division of ELAN Corporation plc Telephone: 353 1 709 4000 Telefax : 353 1 6624960 - - JV SUB at Bioject JV Subsidiary Inc. 7620 S.W. Bridgeport Road, Portland, Oregon 97224, United States of America. Attention: President and Chief Executive Officer Telephone: 1 503-639-7221 Telefax : 1 503-620-6431 or to such other address(es) and telefax numbers as may from time to time be notified by either Party to the other hereunder. 13.2. Any notice sent by mail shall be deemed to have been delivered within seven (7) working days after despatch and any notice sent by telefax shall be deemed to have been delivered within twenty four (24) hours of the time of the despatch. Notice of change of address shall be effective upon receipt; provided that such date of receipt must be a business day for the Party to whom the notice is delivered. 14. Arbitration Should the Parties fail to reach agreement with respect to a dispute or difference (other than as to a question relating to patent validity or as to a matter left to the discretion of a Party hereunder) between the Parties arising out of or in connection with this AGREEMENT, then the dispute or difference will be determined by arbitration in New York in accordance with the Non-Administered Arbitration Rules & Commentary (Amended 1993) of the CPR Institute for Dispute Resolution by one independent and impartial arbitrator who shall have had both training and experience as an arbitrator of general corporate and commercial matters, or depending on the nature of the dispute have experience of pharmaceutical device development and marketing (including clinical development and regulatory affairs) or be an independent patent attorney as the case may be. If the Parties to this AGREEMENT cannot agree on the identity of the arbitrator, then the arbitrator will be selected by the President of the CPR Institute for Dispute Resolution in accordance with the criteria set forth in the preceding sentence. The arbitrator may decide any issue as to whether, or as to the extent to which, any dispute is subject to the arbitration and other dispute resolution provisions in this AGREEMENT. The arbitrator must base the award on the provisions of this AGREEMENT and must render the award in a writing which must include an explanation of the reasons for such award. Any arbitration pursuant to this section will be governed by the substantive laws of the State of New York applicable to contracts made and to be performed in that state, without regard to conflicts of law rules, and by the arbitration law of the Federal Arbitration Act, and judgement upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The statute of limitations of the State of New York applicable to the commencement of a lawsuit will apply to the commencement of an arbitration under this section, except that no defences will be available based upon the passage of time during any active negotiation between the Parties in an attempt to resolve the dispute without arbitration. All fees, costs and expenses of the arbitrator, and all other costs and expenses of the arbitration, will be shared equally by the Parties to this AGREEMENT unless such Parties agree otherwise or unless the arbitrator in the award assesses such costs and expenses against one of such Parties or allocates such costs and expenses other than equally between such Parties. Each Party to this AGREEMENT acknowledges receipt of a copy of the Non-Administered Arbitration Rules & Commentary (Amended 1993) of the CPR Institute for Dispute Resolution. [CONFIDENTIAL PORTION OMITTED]. 15. Withholding Any income or other taxes which JV SUB is required by law to pay or withhold on behalf of ELAN with respect to royalties and any other moneys payable to ELAN under this AGREEMENT shall be deducted from the amount of such royalties and moneys due. JV SUB shall furnish ELAN with proof of such payments. Any such tax required to be paid or withheld shall be an expense of and borne solely by ELAN. JV SUB shall promptly provide ELAN with a certificate or other documentary evidence to enable ELAN to support a claim for a refund or a foreign tax credit with respect to any such tax so withheld or deducted by JV SUB. Both Parties will reasonably cooperate in completing and filing documents required under the provisions of any applicable tax treaty or under any other applicable law, in order to enable JV SUB to make such payments to ELAN without any deduction or withholding. 16. Entire Agreement This AGREEMENT including its Appendices sets forth the entire agreement and understanding of the Parties with respect to the subject matter hereof, and supersedes all prior discussions, agreements and writings in relating thereto, including the letter of agreement of 30th September 1997. 17. Counterparts This AGREEMENT may be executed in two counterparts, each of which shall be deemed an original and which together shall constitute one instrument. IN WITNESS THEREOF the Parties hereto have executed this AGREEMENT in duplicate. Executed by JV SUB on 15 October, 1997 By :/s/ James C. O'Shea Name: James C. O'Shea Title: President Executed by ELAN on 15 October, 1997 By:/s/ Thomas G. Lynch Name: Thomas G. Lynch Title: Director APPENDIX A Part I ELAN PATENT RIGHTS (where the TERRITORY is the United States of America, Canada and Mexico) [CONFIDENTIAL PORTION OMITTED] COUNTRY/ OUR DOCKET NO. APPLICATION NO. FILING DATE PATENT NUMBER ISSUE DATE [CONFIDENTIAL PORTION OMITTED] [CONFIDENTIAL PORTION OMITTED] COUNTRY/ OUR DOCKET NO. APPLICATION NO. FILING DATE PATENT NUMBER ISSUE DATE [CONFIDENTIAL PORTION OMITTED] APPENDIX A Part II ELAN PATENT RIGHTS (where the TERRITORY is world-wide) [CONFIDENTIAL PORTION OMITTED] COUNTRY/ OUR DOCKET NO. APPLICATION NO. FILING DATE PATENT NUMBER ISSUE DATE [CONFIDENTIAL PORTION OMITTED] [CONFIDENTIAL PORTION OMITTED] COUNTRY/ OUR DOCKET NO. APPLICATION NO. FILING DATE PATENT NUMBER ISSUE DATE [CONFIDENTIAL PORTION OMITTED] APPENDIX B LISTED COMPANIES [CONFIDENTIAL PORTION OMITTED] EX-10.41 3 EXHIBIT 10.41 SECURITIES PURCHASE AGREEMENT SECURITIES PURCHASE AGREEMENT dated as of October 15, 1997, between Bioject Medical Technologies Inc., an Oregon corporation (the "Company"), and Elan International Services, Ltd., a Bermuda corporation ("EIS). R E C I T A L S: A. The Company desires to issue and sell to EIS and EIS desires to purchase from the Company, on the Closing Date (as defined below), as provided herein, a promissory note in the original principal amount of $12,015,000, in the form attached hereto as Exhibit A (the "Promissory Note"), for aggregate consideration of $12,015,000 to be paid in cash by EIS to the Company on the Closing Date. B. The Company desires to issue and sell to EIS, and EIS desires to purchase from the Company, (i) 2,727,273 shares of the Company's common stock, without par value (the "Common Stock"), and (ii) a warrant to acquire 1,750,000 shares (subject to adjustment) of Common Stock, in the form attached hereto as Exhibit B (the "Warrant"), for aggregate consideration of $3,000,000 to be paid in cash by EIS to the Company on the Closing Date. C. In the event that Stockholder Approval (as defined herein) is obtained, the Promissory Note shall be exchanged by EIS for certain shares of Series A Convertible Preferred Stock (the "Series A Preferred Stock") and Series B Convertible Preferred Stock (the "Series B Preferred Stock"; together with the Series A Preferred Stock and the Series C Preferred Stock (as defined below), the "Preferred Stock"; together with the Common Stock and the Warrant, the "Securities"), as provided herein, which shall be issued to EIS pursuant to the Certificate of Designations in the form attached hereto as Exhibit C (the "Certificate of Designations"). D. In the event that the Stockholder Approval is obtained, EIS has agreed that for a period of 30 months thereafter EIS may, at the Company's option (but subject to the conditions contained herein), be required to fund up to $4,000,000 to the Company to purchase additional shares of preferred stock (the "Series C Preferred Stock"). E. The Company has previously caused to be formed Bioject JV Subsidiary Inc., an Oregon corporation ("Newco"), for the purpose of developing and commercializing certain technologies relating to glucose monitoring. The initial stockholders in Newco shall be the Company and EIS. The parties intend, as provided herein, that the proceeds of the issuance of Promissory Note shall be applied by the Company solely to fund the Company's initial investment in Newco, as provided herein. F. The Company and EIS are executing and delivering on the date hereof a Registration Rights Agreement in the form attached hereto as Exhibit D (the "Registration Rights Agreement"; together with this Agreement, the Securities, and each other document or instrument executed and delivered in connection with the transactions contemplated hereby, the "Transaction Documents") in respect of the initial purchase of Common Stock and the Common Stock underlying the Securities and any other Common Stock that may at any time be acquired or owned by EIS or its affiliates. A G R E E M E N T: The parties agree as follows: SECTION 1. Closings. (a) Time and Place. The closing of the transactions contemplated hereby (the "Closing") shall occur on the date hereof (the "Closing Date"), at the offices of counsel to EIS or such other place as the parties may agree. (b) Issuance of Securities. At the Closing, (x) the Company shall issue and sell to EIS, and EIS shall purchase from the Company the Promissory Note, upon the terms and subject to the conditions set forth herein, for an aggregate purchase price of $12,015,000, and (y) the Company shall issue and sell to EIS, and EIS shall purchase from the Company (i) 2,727,273 shares of Common Stock (the "Initial Common Stock") and the Warrant, for an aggregate purchase price of $3,000,000 (the "Closing Consideration"). Of such Closing Consideration, $.001 per share of Common Stock issueable upon exercise of the Warrant shall be deemed allocated toward the purchase price of the Warrant. (c) Delivery. At the Closing, EIS shall pay the purchase price for the Promissory Note, Initial Common Stock and the Warrant in cash by wire transfer to an account or accounts designated by the Company and the parties hereto shall execute and deliver to each other, as applicable: (i) the Promissory Note; (ii) a certificate or certificates for the shares of the Initial Common Stock; (iii) the Warrant; and (iv) certificates as to the incumbency of the officers executing this Agreement and each of the other documents or instruments executed in connection herewith. In addition, at the Closing, the Company shall cause to be delivered to EIS an opinion of counsel in form attached hereto as Exhibit E. (d) Additional Closings. (i) In the event that Stockholder Approval shall have been obtained on or prior to February 1, 1998, for a period of 30 months after the date thereof, upon at least 30 days notice, the Company shall be entitled from time to time, subject to the conditions herein, to require EIS to purchase all or part of the Series C Preferred Stock. The Series C Preferred Stock shall be redeemable and convertible in the same manner and subject to the same other conditions as the Series B Preferred Stock; provided that the issuance and conversion prices of each share of Series C Preferred Stock shall be equal to ten times the average of the last traded price for the shares of Common Stock as reported by the Nasdaq Stock Market for 10 consecutive trading days ending on the day that is two business days prior to the date of such issuance . In the event that Stockholder Approval has not been obtained on or prior to February 1, 1998, EIS, in its sole discretion, shall be entitled to deem such lack of approval as a rejection of the Proposal (as defined in Section 4(f)) by the Company's stockholders. (ii) It shall be a condition to EIS's obligation to purchase any Series C Preferred Stock that (A) each of the representations and warranties set forth in Section 2(a), (b)(iii), (c), (d) and (l) shall be true and correct in all material respects as if the date hereof were the proposed funding date thereof; provided, that any reference to the Quarterly Report shall refer to the most recent quarterly report on Form 10-Q and/or any report filed pursuant to Section 13 of the Securities Exchange Act of 1934 (the "Exchange Act"), required to be filed by the Company under applicable law immediately prior to such funding date and SEC Filings shall refer to all filings required to be made by the Company under applicable law on or prior to such date, (B) there shall be no default or breach in any material respect by the Company of a material obligation under any of the Transaction Documents or any other agreement between the Company or any of its affiliates, on the one hand, and EIS or any of their affiliates, on the other hand, and (C) the Company shall have executed and delivered to EIS each document or instrument that shall be customary and appropriate for such transaction, including duly executed and delivered counterparts of certificates for the Series C Preferred Stock. (e) Exemption from Registration. The Securities will be issued under an exemption or exemptions from registration under the Securities Act of 1933, as amended; accordingly, the certificates evidencing the Securities shall, upon issuance, contain the following legend: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT UNDER ANY CIRCUMSTANCES BE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS. (f) Registration Rights Agreement. On the date hereof, the Company, and EIS are each executing and delivering the Registration Rights Agreement, covering the shares of Common Stock issuable hereunder or upon conversion, exercise or exchange of any of the Securities or any other shares of Common Stock hereafter acquired by EIS or its affiliates from the Company. SECTION 2. Representations and Warranties of the Company. (a) Organization. The Company is duly organized, validly existing and in good standing under the laws of the State of Oregon and has all requisite corporate power and authority to own and lease its properties, to carry on its business as presently conducted and as proposed to be conducted and to consummate the transactions contemplated hereby. The Company is qualified and in good standing to do business in jurisdictions set forth on Schedule 2(a), which constitute all of the jurisdictions in which the nature of the business conducted or the property owned by it requires such qualification, except where the failure to so qualify would not have a material adverse effect on the business, prospects, properties or condition (financial or otherwise) of the Company (a "Material Adverse Effect"). (b) Capitalization. (i) The authorized and number of outstanding shares of capital stock of the Company as of September 30, 1997 is 22,475,688. (ii) Except as set forth in Schedule 2(b) and in the Company's quarterly report on Form 10-Q filed with the Securities and exchange Commission on August 14, 1997 (the "Quarterly Report"), as of the Closing there are no options, warrants or other rights outstanding to purchase or otherwise acquire, or any securities convertible into, any of the Company's authorized capital stock. Other than as set forth in this Agreement and as described in Schedule 2(b), there are no agreements, arrangements or understandings concerning the voting, acquisition or disposition of any of the Company's outstanding securities to which the Company is a party or of which it is otherwise aware, and, other than as set forth in Schedule 2(b) or in the Registration Rights Agreement, there are no agreements to register any of the Company's outstanding securities under the U.S. federal securities acts. (iii) All of the outstanding shares of capital stock of the Company have been issued in accordance with applicable state and federal laws and regulations governing the sale and purchase of securities, all of such shares of have duly and validly issued and are fully paid and non-assessable, and none of such shares carries preemptive or similar rights. (c) Authorization of Transaction Documents. The Company has full corporate power and authority to execute and deliver this Agreement and each of the other Transaction Documents, and to perform its obligations hereunder and thereunder. Except for Stockholder Approval the execution, delivery and performance by the Company of the Transaction Documents (including the issuance and sale of the Securities) have been authorized by all requisite corporate actions by the Company; and the Transaction Documents (including the issuance and sale of the Securities) have been duly executed and delivered by the Company are the valid and binding obligations of the Company, enforceable against each in accordance with their respective terms. (d) No Violation. The execution, delivery and performance by the Company of the Transaction Documents (including the issuance and sale of the Securities), and compliance with the provisions thereof by the Company, will not (i) violate any provision of applicable law, statute, rule or regulation applicable to the Company or any ruling, writ, injunction, order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to the Company or any of their respective properties or assets or (ii) conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute (with notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or result in the creation of, any Encumbrance (as defined below) upon any of the properties or assets of the Company under its Articles of Incorporation, as amended, its Certificate of Designations (in the form to be filed as provided herein) or By-laws, or any material contract to which the Company is a party, except where such violation, conflict or breach would not, individually or in the aggregate, have a Material Adverse Effect on the Company (as used in connection to either of them, a "Material Adverse Effect"). As used herein, "Encumbrance" shall mean any liens, charges, encumbrances, equities, claims, options, proxies, pledges, security interests, or other similar rights of any nature, except for such conflicts, breaches or defaults which would not, individually or in the aggregate, have a Material Adverse Effect. (e) Approvals. Except as set forth on Schedule 2(e), no material permit, authorization, consent or approval of or by, or any notification of or filing with, any person or entity (governmental or otherwise) is required in connection with the execution, delivery or performance of the Transaction Documents (including the issuance and sale of the Securities) by the Company or Newco. Except for the Stockholder Approval, there is no approval of the Company's stockholders required under applicable laws in connection with the execution and delivery the Transaction Documents or the consummation of the transactions contemplated thereby, including the filing of the Certificate of Designations and the issuance of the Securities. (f) Filings, Taxes and Financial Statements. (i) The Company has filed its annual report on Form 10-K for the year ended March 31, 1997, its related proxy materials and its quarterly reports on Form 10-Q for the quarter ended June 30, 1997 and the Quarterly Report (collectively, including all exhibits and schedules required to be filed in connection therewith, the "SEC Filings") with the Securities and Exchange Commission, the Nasdaq Stock Market and any other required person or entity (governmental or otherwise) in a timely manner and as otherwise required by applicable laws and regulations, including the federal securities acts. The audited financial statements of the Company for the fiscal year ended March 31, 1997 included in the SEC Filings (the "Audited Financial Statements"), and the Company's unaudited balance sheet for the period ending June 30, 1997, together with the accompanying statements of operations and cash flows including the notes thereto (the "June Financial Statements"; collectively, with the Audited Financial Statements, the "Financial Statements") are accurate and complete in all material respects and fairly present the financial condition of the Company as at the dates thereof and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods indicated (except as may be otherwise indicated in such financial statements or the notes thereto), subject, in the case of the June Financial Statements, to normal year-end audit adjustments (which shall not be material in the aggregate) and the absence of footnote disclosures. (ii) The Company has filed in a timely manner all material federal, state, local and foreign tax returns, reports and filings (collectively, "Returns"), including income, franchise, property and other taxes, and has paid or accrued the appropriate amounts reflected on such Returns. None of the Returns have been audited or challenged, nor has the Company received any notice of challenge nor have any of the amounts or other data included in the Returns been challenged or reviewed by any governmental authority. (iii) Except as listed in Schedule 2(f), which sets forth a true and accurate list and description of any such plans maintained or sponsored by the Company or to which the Company is required to make contributions, the Company does not maintain, sponsor, is not required to make contributions to or otherwise have any liability with respect to any pension, profit sharing, thrift or other retirement plan, employee stock ownership plan, deferred compensation, stock ownership, stock purchase, performance share, bonus or other incentive plan, severance plan, health or group insurance plan, welfare plan, or other similar plan, agreement, policy or understanding (whether written or oral), whether or not such plan is intended to be qualified under Section 401(a) of the Code, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, which plan covers any employee or former employee of the Company. (g) Absence of Changes. Except as set forth on Schedule 2(g), since June 30, 1997, there has not been (a) any material adverse change in the business, properties, condition (financial or otherwise), operations or prospects of the Company; (b) any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the business, properties, condition (financial or otherwise), operations or prospects of the Company; (c) any declaration, setting aside or payment of any dividend or other distribution or payment (whether in cash, stock or property) in respect of the capital stock of the Company, or any redemption or other acquisition of such stock by the Company; (d) any disposal or lapse of any trade secret, invention, patent, trademark, trademark registration, service mark, service mark registration, copyright, copyright registration, or any application therefor or filing in respect thereof; (e) loss of the services of any of the key officers or key employees of the Company; (f) any incurrence of or entry into any liability, mortgage, lien, commitment or transaction, including without limitation, any borrowing (or assumption or guarantee thereof) or guarantee of a third party's obligations, or capital expenditure (or lease in the nature of a conditional purchase of capital equipment) in excess of $50,000; or (g) any material change by the Company in accounting methods or principles or (h) any change in the assets, liabilities, condition (financial or otherwise), results or operations or prospects of the Company from those reflected on the Quarterly Report, except changes in the ordinary course of business that have not, individually or in the aggregate, had a Material Adverse Effect. (h) No Liabilities. Except as set forth in the Quarterly Report or Schedule 2(h) attached hereto, neither the Company nor Newco nor any of their respective subsidiaries has incurred or suffered any liability or obligation, matured or unmatured, contingent or otherwise, except in the ordinary course of business that have not, individually or in the aggregate, had a Material Adverse Effect. (i) Properties and Assets; Etc. (i) The Company owns all of its properties and assets, including patents, patent applications, continuations, continuations-in-part, extensions, trademarks and trademark applications, know-how and other intellectual property, as reflected in the Financial Statements, subject in each case, to no Encumbrances required to be disclosed in the Financial Statements except as set forth therein. Except as set forth on Schedule 2(i), (i) all of the Company's patents, trademarks, service marks, trade names, and copyrights are owned by the Company free and clear of all liens, claims and encumbrances and are valid and duly issued or existing; none of the Company's rights in or use of such patents, trademarks, service marks, trade names or copyrights has been or is currently being threatened to be, challenged; to the best of the Company's knowledge, without making any inquiry other than those, if any, routinely conducted by the Company in the ordinary course of business, no current or currently planned product based upon the Company's intellectual property would infringe any patent, trademark, service mark, trade name or copyright of any other person or entity issued or pending on the Closing Date if the Company were to distribute, sell or manufacture such products; and the Company is not aware, after due inquiry, of any actual or threatened claim by any person or entity alleging any infringement by the Company of a patent, trademark, service mark, trade name or copyright possessed by such Person; (ii) all of such patents, trademark registrations, service mark registrations, trade name registrations and copyrights and copyright registrations, whether foreign or domestic, have been duly issued and have not been canceled, abandoned, or otherwise terminated; and (iii) all of the Company's patent applications, trademark applications, service mark applications, trade name applications and copyright applications have been duly filed. (ii) Each of the Contracts listed as an exhibit to the Company's Annual Report on Form 10-K for the year ended March 31, 1997 is a legal and valid agreement binding upon each of the parties thereto and is in full force and effect and, to the best knowledge of the Company, there is no breach or default by any party thereunder. Such Contracts constitute all material agreements, arrangements or understandings required to be included in such annual Report under Securities and Exchange Commission regulations promulgated in connection therewith. (iii) The Company has and maintains adequate and sufficient insurance, including liability, casualty and products liability insurance, covering risks associated with its business, properties and assets, including insurance that is customary for companies similarly situated. (iv) To the best of its knowledge, the Company, its business and properties and assets are in compliance, in all material respects, with all applicable laws and regulations, including without limitation, those relating to (a) health, safety and employee relations, (ii) environmental matters, including the discharge of any hazardous or potentially hazardous materials into the environment, and (iii) the development, commercialization and sale of pharmaceutical and biotechnology products, including all applicable regulations of the U.S. Food and Drug Administration and comparable foreign regulatory authorities. (j) Legal Proceedings, etc. There is no legal, administrative, arbitration or other action or proceeding or governmental investigation pending or , to the best of the Company's knowledge threatened against the Company, or any director, officer or employee of the Company, which is required to be described in the Company's Quarterly Report on Form 10-Q and is not so described. The Company is not in violation of or default under, any material laws, judgments, injunctions, orders or decrees of any court, governmental department, commission, agency, instrumentality or arbitrator applicable to its business. (k) Disclosure. The Company's Annual Report on Form 10-K for the year ended March 31, 1997 and periodic reports subsequently filed under Section 13 of the Exchange Act, and the representations and warranties set forth herein and the Transaction Documents, when viewed collectively, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained herein and therein not misleading. (l) Brokers or Finders. Other than as set forth on Schedule 2(l), the Company has not retained any investment banker, broker or finder in connection with the transactions contemplated by the Transaction Documents; and the Company agrees to indemnify and hold EIS harmless against any liability, settlement or expense arising out of, or in connection with, any claim related thereto. SECTION 3. Representation and Warranties of EIS. EIS hereby represents and warrants to the Company as follows: (a) Organization. EIS is a corporation duly organized, validly existing and in good standing under the laws of Bermuda and has all requisite corporate power and authority to own and lease its properties, to carry on its business as presently conducted and as proposed to be conducted and to consummate the transactions contemplated hereby. EIS is qualified and in good standing to do business in each jurisdiction in which the nature of the business conducted or the property owned by it requires such qualification, except where the failure to so qualify would not reasonably be expected to have a material adverse effect on the business or condition (financial or otherwise) of EIS. (b) Authorization of Agreement. EIS has full legal right, power and authority to enter into this Agreement and purchase and accept the Note, and perform its obligations hereunder, which have been duly authorized by all requisite corporate action. This Agreement and the purchase of the Note are the valid and binding obligations of EIS, enforceable against them in accordance with their terms. (c) No Conflicts. The execution, delivery and performance by EIS of this Agreement, the purchase and acceptance of the Note and compliance with provisions hereof by EIS, will not (i) violate any provisions of applicable law, statute, rule or regulation applicable to EIS or any ruling, written, injunction, order, judgment or decree of any court, arbitration, administrative agency of other governmental body applicable to EIS of any of its properties or assets or (ii) conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with notice or lapse of time to both) a default (or give rise to any right of termination, cancellation or acceleration) under, or result in the creation of any Encumbrance upon any of the properties or assets of EIS under the Certificate of Incorporation or By-laws of EIS or any material contract to which EIS is party, except where such violation conflict or breach would not, individually or in the aggregate, have a material adverse effect on EIS. (d) Approvals. No permit, authorization, consents or approval of or by, or any notification of or filing with, any person or entity (governmental or otherwise) is required in connection with the execution, delivery or performance of this Agreement or the Note (including the funding and acceptance thereof) by EIS. (e) Investment Representations. (i) EIS is sophisticated in transactions of this type and capable of evaluating the merits and risks of the transactions described herein and in the other Transaction Documents, and have the capacity to protect their own interests. EIS has not been formed solely for the purpose of entering into the transactions described herein and therein and is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with the view to, or for sale in connection with, any distribution of any part thereof; provided, that EIS shall be permitted to convert or exchange such Securities and/or transfer them as permitted herein and under applicable law. EIS has been afforded the opportunity to ask questions of and information about the Company and its business and prospects, from management and representatives of the Company, and have relied on its own independent judgment in making a judgment about an investment in the Securities. (ii) Nothing contained in this Section 3(e) shall limit any of the Company's representations or warranties or limit EIS's recourse in respect thereof. (iii) Other than as set forth on Schedule 3(e)(iii), EIS have not retained any investment banker, broker or finder in connection with the transactions contemplated by the Transaction Documents; and EIS agree to indemnify and hold the Company harmless against any liability, settlement or expense arising out of, or in connection with, any claim related thereto. SECTION 4. Covenants of the Company. (a) Non-disclosure. From and after the date hereof, the Company shall not disclose to any person or entity (other than its directors, officers and agents who need to know such information in connection with the transactions described herein and the other Transaction Documents (each of whom shall be informed of this confidentiality provision and in respect of whose breaches the Company shall be responsible)) the content of this Agreement or any of the other Transaction Documents or the substance of the transactions described herein, without the prior written consent of EIS (which consent shall not be unreasonably withheld or delayed), except to the extent required by applicable laws or administrative or judicial processor in respect of press releases and periodic reports prepared in good faith by the Company; provided, that the Company shall provide EIS with a reasonable opportunity to review and approve such releases or reports. This Section 4 shall not be construed to prohibit disclosure of any information which has not been previously determined to be confidential by EIS, or which shall have become publicly disclosed (other than by breach of the Company's obligations hereunder). (b) Board of Directors. Coincident with Closing, the Company's board of directors shall be expanded by one member, from seven to eight members, and EIS shall be entitled to appoint a director to fill the vacancy so created (the "EIS Director"), who shall be a duly elected director. From and after the date hereof and for so long as EIS and/or their respective affiliates own Securities that represent ownership of at least 5% (and 10% from and after October 15, 2004) of the Common Stock, on a fully diluted basis the Company shall use its best efforts to cause the EIS Director to be elected to the Company's board of directors, by including the EIS Director in the management slate of directors at each meeting of stockholders at which an election of directors occurs. Appointment of the EIS Director shall be subject to the consent of the Company, which shall not be unreasonably withheld or delayed, and which shall be based upon regulatory and fitness of character considerations. (c) Fully-diluted Stock Ownership. Notwithstanding any other provision of this Agreement, in the event that EIS shall have determined that at any time it (together with its Affiliates, if applicable) holds or has the right to receive Common Stock (or securities or rights, options or warrants exercisable, exchangeable or convertible for or into Common Stock) representing in the aggregate in excess of 19.9% of the Company's outstanding Common Stock (assuming any such exercise, exchange or conversion, but not the exercise, exchange or conversion of any other similar securities), EIS shall have the right, in its sole discretion, rather than acquiring such securities from the Company, to exchange such number of securities, as are necessary to bring its holdings to below 19.9% of the voting securities of the Company, for non-voting, liquidation preference equity securities of the Company (which shall be reasonably satisfactory to the Company and EIS), which equity securities shall be entitled to all of the other rights and benefits of the Common Stock. In the event that EIS shall undertake to exercise such right, EIS shall retain the additional right to exchange such new class of equity security for Common Stock, in its discretion. (d) Certain Prohibited Activities. (i) For such time that the Promissory Note remains outstanding, the Company shall not, without EIS's written consent (which consent will not be unreasonably withheld or delayed): (a) acquire or dispose of any material asset or business, other than in the ordinary course of business; (b) merge or consolidate with any other corporation or acquire control of any other corporation or business entity; or (c) incur any indebtedness or liens outside the ordinary course of business, which ordinary course shall include equipment leases and working capital lines up to a maximum of the lesser of $5 million and 50% of the Company's aggregate consolidated accounts receiveable and inventory; (ii) In the event that Stockholder Approval is obtained, and after the redemption of the Promissory Note and issuance and sale of the Preferred Stock has occurred, the restrictions referred to in item (a) of Section 4(d) above shall continue, and the restrictions referred to in items (b) and (c) above shall be of no further force or effect; provided that, they shall be replaced by the following restriction: without the written consent of EIS (which consent will not be unreasonably withheld or delayed) the Company shall not incur any indebtedness in excess of $10 million aggregate principal amount unless the Company can reasonably establish (based on prudent and customary commercial practices and standards in the capital markets) that the Company may incur such indebtedness from an institutional lender, venture capital firm or reputable so-called "hedge" fund, on a prudent and reasonable basis, based on the Company's then credit-worthiness, prospects, solvency and business (each of item (a) and (b) of Section 5(e)(i) and this Section 5(e)(ii), as applicable, a "Restricted Transaction"). Notwithstanding the foregoing, the Company may incur working capital lines and equipment leases from unaffiliated third parties in bona fide financing transactions in principal amounts up to the lesser of $5 million and 50% of the Company's aggregate consolidated accounts receivable and inventory. (e) Stockholder Approval. The Company shall prepare a Proxy Statement, call a Special Meeting of Stockholders to be held prior to February 1, 1998, and use its best efforts (including, without limitation, subject to their fiduciary duties as directors, the board of director affirmative recommendation that the stockholders of the Company vote to approve issuance and sale of the Series A and Series B Preferred Stock in exchange for the Promissory Note), all to the fullest extent permitted and as required under applicable law, to obtain thereat the approval (the "Stockholder Approval") of the proposal to issue and sell the Series A and Series B Preferred Stock and to authorize the issuance of the Series C Preferred Stock and amend the Company's Articles of Incorporation in connection therewith in exchange for the Promissory Note (the "Proposal"). In the event that the Stockholders' Approval shall not have been obtained on or prior to February 1, 1998, EIS shall be entitled, in their sole discretion and upon at least 30-days notice to the Company, to consider such lack of approval as a rejection of the Proposal. The Company shall provide a draft copy of such Proxy Statement to EIS at least five business days prior to the anticipated date of filing with the SEC, and the filing of the Proxy Statement shall be subject to EIS's approval thereof, which shall not be unreasonably withheld or delayed. (f) Use of Proceeds. The Company shall use the proceeds of the sale of the Series C Preferred Stock, if any, solely for the purpose of meeting its capitalization and funding requirements to Newco, described as Additional Funding in the Bioject JV Subsidiary Inc. Subscription and Stockholder Agreement dated as of the date hereof. SECTION 5. Mutual Covenants of the Parties. (a) Exchange. In the event that Stockholder Approval is obtained, EIS shall tender the Promissory Note to the Company in exchange for the issuance to EIS of (i) that number of shares of the Series A Preferred Stock equal to (a) $10 million plus accrued and unpaid interest divided by (b) $15, and (ii) 134,333 shares of the Series B Preferred Stock such tender and exchange to be completed within 10 business days of the date of Stockholder Approval. (b) Further Assurances. From and after the date hereof, each of the parties hereto agree to do or cause to be done such further acts and things and deliver or cause to be delivered to each other such additional assignments, agreements, powers and instruments, as each may reasonably require or deem advisable to carry into effect the purposes of the Transaction Documents or to better to assure and confirm unto each other their respective rights, powers and remedies hereunder and thereunder. (c) Preferred Stock Early Redemption. In the event that the Company desires to engage in a Restricted Transaction to which EIS has reasonably withheld its consent (s provided herein), the Company shall have the right to redeem the remaining outstanding Preferred Stock, by paying to EIS the amount of unpaid dividends then accrued and unpaid, and issuing to EIS a warrant (the "Contingent Warrant") in customary form and otherwise reasonably satisfactory to EIS which shall entitle EIS to purchase that number of shares of Common Stock (or securities or other property of its successor or acquirer, if any, in accordance with the Anti-Dilution Adjustments) into which the Preferred Stock would have been convertible had it not been redeemed under this provision, at an aggregate price equal to the sum of the entire amount of the Preferred Stock and an interest component on such sum of 9% per annum from redemption until the date of exercise. The Contingent Warrant shall be transferable in accordance with Section 16 hereof. (d) Technology Collaboration. (i) Each of the parties hereto agree that commencing with the first quarter of 1998, upon written request from the Company, EIS shall cause to be invested up to $500,000 in the form of grants to the Company in support of the development of the Company's existing needle- free injection technologies (the "Technology Collaboration") in four equal, quarterly (in arrears) payments of $125,000 each. (ii) The first such technology referred to in Section 5(e)(i) shall be one or more pre-filled ampule projects mutually acceptable to EIS and the Company; and that other projects may be substituted on a mutually satisfactory basis if it is determined by the Company that the initial projects have no practical commercial potential. (iii) All intellectual property and results of projects shall belong to the Company; provided, that EIS shall have a right of first refusal, on then- current market terms, to conduct further development or commercialization of such intellectual property or results in conjunction with the Company, for the period of one year following completion of work directly funded by the grants contemplated herein. During such one-year period, the Company shall not take any actions, including in concert with any third party, which would negatively effect EIS's right. (e) Standstill. EIS agrees that, for a period of three years from the date hereof, unless (i) a party shall have been specifically invited in writing by the Company or (ii) a party unaffiliated with EIS, without participation or encouragement of EIS or any of its affiliates (as such term is defined under the Securities Exchange Act of 1934 (the "1934 Act")), shall announce a tender offer or solicit proxies with respect to an acquisition proposal which has not been solicited by the Company's board of directors or attempts to control the management or business or affairs of the Company or otherwise acquire more than 10% of the Company's voting securities (outright or on an as converted basis; without approval from the Company's Board of Directors), neither EIS nor its affiliates shall in any manner, directly or indirectly, (a) effect or seek, offer or propose to effect or participate in (publicly or otherwise) (i) any acquisition of securities (or beneficial ownership thereof) or assets of the Company or its subsidiaries, (ii) any tender or exchange offer, merger or other business combination involving the Company or any of its subsidiaries, (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or its subsidiaries, or (iv) any solicitation of proxies (as such terms are defined under the regulations of the Securities and Exchange Commission) or consents to vote any voting securities of the Company; (b) form, join or participate in a group (as defined under the 1934 Act); (c) otherwise act to seek control or influence the management, board of directors or policies of the Company, or (d) take any action which may force the Company to make a public announcement regarding any matters enumerated in (a) above. SECTION 6. Entire Agreement. This Agreement and the other Transaction Documents contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings among the parties with respect thereto. SECTION 7. Survival and Indemnification. (a) Survival Period. The representations and warranties of the Company contained herein shall survive for a period of one year after the date hereof. (b) Indemnification. In addition to all rights and remedies available to the parties hereunder at law or in equity, the Company (in such capacity, an "Indemnifying Party") shall indemnify EIS, and its respective affiliates, and EIS' and its respective affiliates' stockholders, officers, directors, employees, agents, representatives, successors and assigns (collectively, the "Indemnified Person"), and save and hold EIS harmless from and against and pay on behalf of or reimburse each such Indemnified Person, as and when incurred, for any and all loss, liability, demand, claim, action, cause of action, cost, damage, deficiency, tax, penalty, fine or expense, whether or not arising out of any claims by or on behalf of such Indemnified Person or any third party, including interest, penalties, reasonable attorneys' fees and expenses and all amounts paid in investigation, defense or settlement of any of the foregoing (collectively, "Losses"), that any such Indemnified Person may suffer, sustain incur or become subject to, as a result of, in connection with, relating or incidental to or by virtue of: (i) any misrepresentation or breach of warranty on the part of the Indemnifying Party under Section 2 of this Agreement; or (ii) any nonfulfillment, default or breach of any covenant or agreement on the part of the Indemnifying Party under Section 4 of this Agreement. (c) Maximum Recovery. The maximum recovery of EIS under this Section 7 shall not exceed $15 million. No Indemnified Party shall assert any such claim unless Losses in respect thereof incurred by any Indemnified Party, when aggregated with all previous Losses hereunder, equal or exceed $250,000, and the obligation of the Indemnifying Party to indemnify shall not apply to the first $250,000 of losses to the Indemnified Person. (d) Exception. Notwithstanding the foregoing, and subject to the following sentence, upon judicial determination that is final and no longer appealable, that the act or omission giving rise to the indemnification set forth above resulted primarily out of or was based primarily upon the Indemnified Person's negligence(unless such Indemnified Person's negligence was based upon the Indemnified Persons reliance in good faith upon any of the representations, warranties, covenants or promises made by the Indemnifying Party herein) the Indemnifying Party shall not be responsible for any Losses sought to be indemnified in connection therewith, and the Indemnifying Party shall be entitled to recover from the Indemnified Persons all amounts previously paid in full or partial satisfaction of such indemnity, together with all costs and expenses (including reasonable attorneys fees) of the Indemnifying Party reasonably incurred in connection with the Indemnified Party's claim for indemnity, together with interest at the rate per annum publicly announced by Morgan Guaranty Trust Company as its prime rate from the time of payment of such amounts to the Indemnified Person until repayment to the Indemnifying Party. (e) Investigation. All indemnification rights hereunder shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby to the extent provided in Section 7(b) above, irrespective of any investigation, inquiry or examination made for or on behalf of, or any knowledge of the Indemnified Persons or the acceptance of any certificate or opinion. (f) Contribution. If the indemnity provided for the this Section 7 shall be, in whole or in part, unavailable to any Indemnified Person, due to Section 7(b) being declared unenforceable by a court of competent jurisdiction based upon reasons of public policy, so that Section 7(b) shall be insufficient to hold each such Indemnified Person harmless from Losses which would otherwise be indemnified hereunder, then the Indemnifying Party and the Indemnified Person shall each contribute to the amount paid or payable for such Loss in such proportion as is appropriate to reflect not only the relative benefits received by the Indemnifying Party on the one hand and the Indemnified Person on the other, but also the relative fault of the Indemnifying Party and be in addition to any liability that the Indemnifying Party may otherwise have. Subject to Section 7(h) hereunder, the indemnity, contribution and expense reimbursement obligations that the Indemnifying Party has under this Section 7 shall survive the expiration of the Transaction Documents. The parties hereto further agree that the indemnification and reimbursement commitments set forth in this Agreement shall apply whether or not the Indemnified Person is a formal part to any such lawsuit, claims or other proceedings. (g) Limitation. No claim shall be brought by an Indemnified Person in respect of any misrepresentation or breach of warranty under this Agreement after one year from and after the date hereof; and any claim for nonfulfillment, default or breach of any covenant shall be brought within one year of the date of that such Indemnified Person became aware or should have become aware of the nonfulfillment, default or breach. Except as set forth in the previous sentence and in Section 7(c) above, this Section 7 is not intended to limit the rights or remedies otherwise available to any party hereto with respect to this Agreement or the Transaction Documents. SECTION 8. Notices. All notices, demands and requests of any kind to be delivered to any party in connection with this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by nationally-recognized overnight courier or by registered or certified airmail, return receipt requested and postage prepaid, or by facsimile transmission, addressed as follows: (i) if to the Company, to: Bioject Medical Technologies, Inc. 7620 S.W. Bridgeport Road Portland, Oregon Facsimile: 503-620-6431 Attention: James C. O'Shea with a copy to: Bogle and Gates P.L.LC. Two Union Square 601 Union St. Seattle, WA 98101 Facsimile: (206) 621-2660 Attn: Christopher Barry (ii) if to EIS, to: Elan International Services, Ltd. Flatts Smiths SL04 Bermuda Facsimile: (441) 292-2224 Attention: President with a copy to: Brock Fensterstock Silverstein McAuliffe & Wade LLC 153 East 53rd Street New York, New York 10022 Facsimile: (212) 371-5500 Attention: David Robbins or to such other address as the party to whom notice is to be given may have furnished to the other party hereto in writing in accordance with provisions of this Section 8. Any such notice or communication shall be deemed to have been received (i) in the case of personal delivery or facsimile transmission, on the date of such delivery, (ii) in the case of nationally-recognized overnight courier, on the second business day after the date when sent and (iii) in the case of mailing, on the fifth business day following that day on which the piece of mail containing such communication is posted. Notice hereunder may be given on behalf of the parties by their respective attorneys. SECTION 9. Withholding Taxes. Amounts of income or other taxes which the Company is required by law to pay or withhold with respect to payments or distributions made by it to EIS pursuant to the terms of this Agreement and the Securities (the "Tax Amount") shall be deducted from such payment or distribution. In the event that such a distribution made in property other than cash would require the Company by law to pay or withhold income taxes, prior to such distribution the Company shall advise EIS of the Tax Amount, and EIS shall promptly remit such Tax Amount to the Company in cash and the Company shall make such distribution of property to EIS, and in such event, the Company will (i) promptly pay the Tax Amount to the relevant taxing authority and (ii) provide to EIS such documentation necessary to permit EIS to reclaim the Tax Amount as a Foreign Tax Credit. Notwithstanding the foregoing, the Company shall not withhold, and EIS shall not be required to pay, the Tax Amount if (i) EIS shall determine in good faith that on the basis of a written opinion of an independent tax advisor that there is substantial authority to determine that the Company is not required to withhold the Tax Amount and (ii) EIS shall agree in writing to indemnify the Company from and against all liability arising from a failure to pay or withhold the Tax Amount, including without limitation the Tax Amount, and any interest or penalty assessed thereon by such taxing authority. It shall be a condition to any assignment of any Security that the assignee thereof be bound by this Section 9. SECTION 10. Amendments. This Agreement may not be modified or amended, or any of the provisions hereof waived, except by written agreement of the Company and EIS. SECTION 11. Counterparts and Facsimile. The Transaction Documents may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute one agreement. Each of the Transaction Documents may be signed and delivered to the other party by facsimile transmission; such transmission shall be deemed a valid signature. SECTION 12. Headings. The section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of the Agreement. SECTION 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon, without giving effect to principles of conflicts of laws. SECTION 14. Expenses. Each of the parties shall be responsible for its own costs and expenses incurred in connection with the transactions contemplated hereby and by the other Transaction Documents. SECTION 15. Public Releases; Etc. The parties shall reasonably agree upon the contents of any press release or releases and other public disclosure in respect of the transactions contemplated hereby, and except as may otherwise be required by applicable law or judicial or administrative process or which the Company concludes in good faith is required by applicable securities laws and regulations. SECTION 16. Schedules, etc. All statements contained in any exhibit or schedule delivered by or on behalf of the parties hereto, or in connection with the transactions contemplated hereby, are an integral part of this Agreement and shall be deemed representations and warranties hereunder. SECTION 17. Assignments. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement, the other Transaction Documents, and the Securities may be transferred by EIS to affiliates and subsidiaries without restriction, and in addition, to five non-affiliated institutions, who are accredited investors (as that term is defined under Regulation D of the Securities Act of 1933). [Signature page follows] IN WITNESS WHEREOF, each of the undersigned has duly executed this Securities Purchase Agreement as of the date first written above. Bioject Medical Technologies Inc. By:/s/ James C. O'Shea Name: James C. O'Shea Title: President Elan International Services, Ltd. By:/s/ Kevin Insley Name: Kevin Insley Title: President and Chief Financial Officer EX-10.42 4 EXHIBIT 10.42 BIOJECT MEDICAL TECHNOLOGIES, INC. REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT is made as of October 15, 1997, by and among Bioject Medical Technologies Inc., an Oregon corporation (the "Company"), and Elan International Services, Ltd., a Bermuda corporation ("EIS"). R E C I T A L S: A. Pursuant to a Securities Purchase Agreement dated as of the date hereof (the "Purchase Agreement"), EIS has acquired (x) certain shares of common stock without par value (the "Common Stock") of the Company and a warrant to purchase up to 1,750,000 shares (subject to adjustment) of Common Stock (the "Warrant"), and (y) a promissory note (the Promissory Note"), which under certain circumstances shall be exchanged by EIS for shares of two series of preferred stock (the "Preferred Stock"), which Preferred Stock may be convertible into shares of Common Stock. B. The closing under the Purchase Agreement has occurred on the date hereof; it being a condition to such closing that the parties execute and deliver this Agreement. C. The parties desire to set forth herein their agreement related to the granting of certain registration rights to the Holders (as defined below) of any Common Stock or securities convertible into Common Stock. A G R E E M E N T: The parties hereto agree as follows: 1. Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings: "Affiliate" of any Person shall mean any other Person controlling, controlled by or under common control with such particular Person. In the case of a natural Person, his Affiliates include members of such Person's immediate family, natural lineal descendants of such Person or a trust for the exclusive benefit of such Person and his immediate family and natural lineal descendants. "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Holders", "holders" or "Holders of Registrable Securities" shall mean EIS and any Person who shall have acquired Registrable Securities from EIS as permitted herein pursuant to Section 9 hereof, either individually or jointly as the case may be. "Person" shall mean an individual, a partnership, a company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental quasi-governmental entity or any department, agency or political subdivision thereof. "Registrable Securities" means (i) any Common Stock issued or issuable under the Purchase Agreement and the Warrant, (ii) any Common Stock issued or issuable upon conversion of or in connection with the holding of the Preferred Stock , (iii) any Common Stock issued or issuable in respect of the securities referred to in clauses (i) or (ii) above upon any stock split, stock dividend, recapitalization or similar event, and (iv) any other stock acquired by EIS or its affiliates from the Company; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction (including a transaction pursuant to a registration statement under this Agreement and transaction pursuant to Rule 144 promulgated under the Securities Act) in which registration rights are not transferred pursuant to Section 9 hereof. The terms "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement. "Registration Expenses" shall mean all expenses, other than Selling Expenses, incurred by the Company in complying with Sections 2 or 3 hereof, including without limitation, all registration, qualification and filing fees, exchange listing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, the expense of any special audits incident to or required by any such registration and the reasonable fees and disbursements, not to exceed $10,000 in the aggregate, of one counsel for the Holders, such counsel to be selected by Holders holding a majority of the Registrable Securities held by the Holders and included in such registration. "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Holders and the costs of any accountants, counsel or other experts retained by the Holders. "1934 Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 2. Demand Registrations. (a) Requests for Registration. Any Holder which holds Registrable Securities representing at least the majority of the Registered Securities then outstanding has the right at any time from time to time, to request registration under the Securities Act of all or part of their Registrable Securities on Form S-1, S-2 or S-3 (if available) or any similar registration (each, a "Demand Registration"), such form to be selected by the Company, it being understood that the Company is not required to file a registration statement with respect to common stock not deemed outstanding within the meaning of General Instruction I.B.3. of Form S-3. Each written request for a Demand Registration (as defined below) shall specify the approximate number of Registrable Securities requested to be registered. Within 10 days after receipt of any such request, the Company will give written notice of such requested registration to all other Holders of Registrable Securities and, if they request to be included in such registration, the Company shall include such Holders' Registrable Securities in such offering if they have responded affirmatively within 10 days after the receipt of the Company's notice. The Holders in aggregate will be entitled to request two Demand Registrations. A registration will not count as one of the permitted Demand Registrations until it has become effective (unless such Demand Registration has not become effective due solely to the fault of the Holders requesting such registration, including a request by such Holders that such registration be withdrawn). In the event that a the Holders shall exercise their right to Demand Registration under this section, and such Demand Registration shall be underwritten, the Company and the Holders exercising such right shall bear the costs associated with the underwritten registration on an equal basis. The Company shall be liable for payment of all expenses associated with any Demand Registrations which are not underwritten in accordance with the terms hereof. (b) Priority on Demand Registrations. If a Demand Registration is an underwritten offering and the managing underwriters advise the Company in writing that in their opinion the number of Registrable Securities and, if permitted hereunder, other securities requested to be included in such offering, exceeds the number of Registrable Securities and other securities, if any, which can be sold in such offering without adversely affecting the marketability of the offering, the Company will include in such registration: (i) first, the Registrable Securities requested to be included in such registration by the Holders (or, if necessary, such Registrable Securities pro rata among the Holders thereof based upon the number of Registrable Securities owned by each such Holder) together with any securities held by third parties holding a similar, previously granted right to be included in such registration; and (ii) thereafter, other securities requested to be included in such registration. (c) Restrictions on Demand Registrations. The Company may postpone for up to six months in any 12-month period, the filing or the effectiveness of a registration statement for a Demand Registration if the Company determines in good faith that such Demand Registration would reasonably be expected to have a material adverse effect on any proposal or plan by the Company to engage in any financing, acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or similar transaction or would require disclosure of any information that the board of directors of the Company determines in good faith the disclosure of which would be detrimental to the Company; provided, that in such event, the Holders initially requesting such Demand Registration will be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration will not count as one of the permitted Demand Registrations hereunder and the Company will pay any Registration Expenses in connection with such withdrawn registration. (d) Selection of Underwriters. The Holders will have the right to select the investment banker(s) and manager(s) to administer an offering pursuant to a Demand Registration, subject to the Company's approval, which will not be unreasonably withheld. (e) Other Registration Rights. Except as provided in this Agreement, so long as any Holder owns any Registrable Securities, the Company will not grant to any Persons the right to request the Company to register any equity securities of the Company, or any securities convertible or exchangeable into or exercisable for such securities, which is in conflict with the rights granted to the Holders hereunder, without the prior written consent of the Holders of at least 50% of the Registrable Securities held by the Holders; it being understood that the Company may grant rights to other Persons to (i) participate in Piggyback Registrations so long as such rights are subordinate or pari passu to the rights of the holders of Registrable Securities with respect to such Piggyback Registrations and (ii) request registrations so long as the Holders of Registrable Securities are entitled to participate in any such registrations with such Persons pro rata on the basis of the number of shares owned by each such Holder. 3. Piggyback Registrations. (a) Right to Piggyback. At any time the Company shall propose to register Common Stock under the Securities Act (other than in a registration on Form S-3 relating to sales of securities to participants in a Company dividend reinvestment plan, S-4 or S-8 or any successor form or in connection with an acquisition or exchange offer or an offering of securities solely to the existing stockholders or employees of the Company) (each, a "Piggyback Registration"), the Company will give prompt written notice to all Holders of Registrable Securities of its intention to effect such a registration and, subject to Section 3(b) and the other terms of this Agreement, will include in such registration all Registrable Securities which are permitted under applicable securities laws to be included in the Form of registration statement selected by the Company and with respect to which the Company has received written requests for inclusion therein within 15 days after the receipt of the Company's notice. (b) Priority on Piggyback Registrations. If a Piggyback Registration is an underwritten registration of Common Stock, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, the Company will include in such registration: (i) the securities the Company proposes to sell; (ii) any securities having the right to be included in such registration prior to the securities of the Holders, provided that such registration right shall have existed prior to the date hereof; (iii) the Registrable Securities requested to be included in such registration by the Holders and such other Persons and any securities requested to be included in such registration by any other Person, pro rata among the Holders of such Registrable Securities and such other Persons, on the basis of the number of shares owned by each of such Holders subject to the rights of such other Persons under agreements existing as of the date hereof; and (iv) thereafter, other securities requested to be included in such registration. The Holders of any Registrable Securities included in such a registration must execute an underwriting agreement in form and substance satisfactory to the managing underwriters. (c) Right to Terminate Registration. If, at any time after giving written notice of its intention to register any of its securities as set forth in Section 3(a) and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to each Holder of Registrable Securities and thereupon be relieved of its obligation to register any Registrable Securities in connection with such registration (provided that the Company shall pay the Registration Expenses in connection therewith). (d) Selection of Underwriters. The Company will have the right to select the investment banker(s) and manager(s) to administer an offering pursuant to a Piggyback Registration. 4. Expenses of Registration. Subject to the final sentence of Section 2(a), Registration Expenses incurred in connection with all registrations pursuant to Section 2 shall be borne by the Company. All Selling Expenses relating to securities registered on behalf of the Holders of Registrable Securities shall be borne by such holders. Registration expenses incurred in connection with registration pursuant to Section 3 shall be borne by the Company and the Holders on a pro rata basis in accordance with the number of Shares sold by each. 5. Holdback Agreements. (a) The Company agrees (i) not to effect any public offering, sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during the seven days prior to and during the 90-day period beginning on the effective date of any underwritten Demand Registration or any underwritten Piggyback Registration (except as part of such underwritten registration or pursuant to registrations on Form S-8 or any successor form), unless the underwriters managing the registered public offering otherwise agree, and (ii) to use reasonable efforts to cause each holder of at least 5% (on a fully- diluted basis) of its Common Stock, or any securities convertible into or exchangeable or exercisable for Common Stock, purchased from the Company at any time after the date of this Agreement (other than in a registered public offering) to agree not to effect any public sale or distribution (including sales pursuant to Rule 144) of any such securities during such periods (except as part of such underwritten registration, if otherwise permitted), unless the underwriters managing the registered public offering otherwise agree. (b) Each holder of Registrable Securities agrees, if requested by the managing underwriter or underwriters in an underwritten offering of securities of the Company, not to effect any offer, sale, distribution or transfer (or offer or agree to do so) of Registrable Securities, including a sale pursuant to Rule 144 (or any similar provision then effect) under the Securities Act (except as part of such underwritten registration), during the seven-day period prior to, and during the 90-day period or such shorter period as may be agreed to by the parties hereto) following the effective date of such Registration Statement to the extent timely notified in writing by the Company or the managing underwriter or underwriters. 6. Registration Procedures. Whenever the Holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement, the Company will use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of distribution thereof, and pursuant thereto the Company will as expeditiously as possible: (a) subject to Section 2(c) hereof, prepare and file with the Commission a registration statement on any form for which the Company qualifies with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective (provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will (i) furnish to the counsel selected by the Holders copies of all such documents proposed to be filed, which documents will be subject to the review of such counsel, and (ii) notify each holder of Registrable Securities covered by such registration of any stop order issued or threatened by the Commission); (b) subject to Section 2(c) hereof, prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than nine months and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement; (c) furnish to each seller of Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller; (d) use its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdiction as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6(d), (ii) subject itself to taxation in any jurisdiction or (iii) consent to general service of process in any such jurisdiction); (e) notify each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of any such seller, the Company will prepare a supplement of amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading; provided that the Company shall not be required to amend the registration statement or supplement the Prospectus for a period of up to six months if the board of director determines in good faith that to do so would reasonably be expected to have a material adverse effect on any proposal or plan by the Company to engage in any financing, acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or similar transaction or would require the disclosure of any information that the board of directors determines in good faith the disclosure of which would be detrimental to the Company, it being understood that the period for which the Company is obligated to keep the Registration Statement effective shall be extended for a number of days equal to the number of days the Company delays amendments or supplements pursuant to this provision. Upon receipt of any notice pursuant to this section 6(e) Holders shall suspend all offers and sales of securities of the Company and all use of any prospectus until advised by the Company that offers and sales may resume, and shall keep confidential the fact and content of any notice given by the Company pursuant to this section 6(e) (f) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if not so listed, to be listed on the NASD automated quotation system and, if listed on the NASD automated quotation system, use its best efforts to secure designation of all such Registrable Securities covered by such registration statement as a NASDAQ National market system security within the meaning of Rule 11Aa2-1 of the Commission or, failing that, to secure NASDAQ authorization for such Registrable Securities and, without limiting the generality of the foregoing, to arrange for at least two market makers to register as such with respect to such Registrable Securities with the NASD; (g) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement; (h) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including without limitation, effecting a stock split or a combination of shares); (i) make available for inspection by a representative of the Holders of Registrable Securities included in the registration statement, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonable requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; (j) otherwise use its reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months beginning with the first day of the Company's first full calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; (k) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any common stock included in such registration statement for sale in any jurisdiction, the Company will use its reasonable best efforts promptly to obtain the withdrawal of such order; and (l) obtain a so-called "cold comfort" letter from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters. 7. Indemnification. (a) The Company agrees to indemnify, to the fullest extent permitted by applicable law, each Holder of Registrable Securities, its officers and directors and each Person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities, expenses or any amounts paid in settlement of any litigation, investigation or proceeding commenced or threatened (collectively, "Claims") to which each such indemnified party may become subject under the Securities Act insofar as such Claim arose out of (i) any untrue or alleged untrue statement of material fact contained, on the effective date thereof, in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such holder expressly for use therein or by such holder's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such holder with a sufficient number of copies of the same. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities. (b) In connection with any registration statements in which a holder of Registrable Securities is participating, each such Holder will furnish to the Company in writing such customary information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus (the "Seller's Information") and, to the fullest extent permitted by applicable law will indemnify the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act) against any and all Claims to which each such indemnified party may become subject under the Securities Act insofar as such Claim arose out of (i) any untrue or alleged untrue statement of material fact contained, on the effective date thereof, in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) any violations by such Person of any federal, state or common law rule or regulation applicable to such Person and relating to action required of or inaction by such Person in connection with any such registration; provided that with respect to a Claim arising pursuant to clause (i) or (ii) above, the material misstatement or omission is contained in such Seller's Information; provided, further, that the obligation to indemnify will be individual to each Holder and will be limited to the net amount of proceeds received by such Holder from the sale of Registrable Securities pursuant to such registration statement. (c) Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (but the failure to provide such notice shall not release the indemnifying party of its obligation under paragraphs (a) and (b), unless and then only to the extent that, the indemnifying party has been prejudiced by such failure to provide such notice) and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. (d) The indemnifying party shall not be liable to indemnify an indemnified party for any settlement, or consent to judgment of any such action effected without the indemnifying party's consent (but such consent will not be unreasonably withheld). Furthermore, the indemnifying party shall not, except with the approval of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to each indemnified party of a release from all liability in respect to such claim or litigation without any payment or consideration provided by each such indemnified party. (e) If the indemnification provided for in this Section 7 is unavailable to an indemnified party under clauses (a) and (b) above in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company, the underwriters, the sellers of Registrable Securities and any other sellers participating in the registration statement from the sale of shares pursuant to the registered offering of securities to which indemnity is sought but also the relative fault of the Company, the underwriters the sellers of Registrable Securities and any other sellers participating in the registration statement in connection with the statement or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, the underwriters, the sellers of Registrable Securities and any other sellers participating in the registration statement shall be deemed to be based on the relative relationship of the total net proceeds from the offering (before deducting expenses) to the Company, the total underwriting commissions and fees from the offering (before deducting expenses) to the underwriters and the total net proceeds from the offering (before deducting expenses) to the sellers of Registrable Securities and any other sellers participating in the registration statement. The relative fault of the Company, the underwriters, the sellers of Registrable Securities and any other sellers participating in the registration statement shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by registration statement and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (f) The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and will survive the transfer of securities. 8. Participation in Underwritten Registrations. No Person may participate in any registration hereunder which is underwritten unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements, (b) as expeditiously as possible notifies the Company of the occurrence of any event as a result of which such prospectus contains an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (c) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 9. Transfer of Registration Rights. The rights granted to any Person under this Agreement may be assigned to a transferee or assignee in connection with any transfer or assignment of Registrable Securities by a Holder; provided, that: (a) such transfer may otherwise be effected in accordance with applicable securities laws, (b) if not already a party hereto, the assignee or transferee agrees in writing prior to such transfer to be bound by the provisions of this Agreement applicable to the transferor, (c) such transferee shall own Registrable Securities representing at least 1,000,000 shares of Common Stock, subject to the Anti-dilution Adjustments, and (d) EIS shall act as agent and representative for such Holder for the giving and receiving of notices hereunder. 10. Information by Holder. Each Holder shall furnish the Company such written information regarding such Holder and any distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration qualification or compliance referred to in this Agreement. 11. Exchange Act Compliance. After the IPO, the Company shall comply with all of the reporting requirements of the Securities Exchange Act of 1934 applicable to it and shall comply with all other public information reporting requirements of the Commission which are conditions to the availability of Rule 144 for the sale of the Registrable Securities. The Company shall cooperate with each Purchaser in supplying such information as may be necessary for such Purchaser to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of Rule 144. 12. Limitation on Registration. The Company shall not be obligated to effect a registration of any Holder's Registrable Securities pursuant to Sections 2 or 3 hereof if all of the Registrable Securities have been sold under Rule 144, Regulation S or similar provision under the Securities Act so that there is no further restriction on the transfer by the transferee. The Company shall not be required to include any Registerable Securities of a Holder in a registration if all of such Holder's Registerable Securities could be sold within a three month period pursuant to Rule 144 or other similar rule or regulation. 13. Miscellaneous. (a) No Inconsistent Agreements. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Holders of Registrable Securities in this Agreement. (b) Remedies. Any Person having rights under any provision of this Agreement will be entitled to enforce such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement; provided that in no event shall any Holder have the right to enjoin or interfere with any offering of securities by the Company. (c) Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only upon the prior written consent of the Company and Holders of at least 50% of the Registrable Securities; provided, that without the prior written consent of all the Holders, no such amendment or waiver shall reduce the foregoing percentage. (d) Successors and Assigns. Subject to Section 9 hereof, all covenants and agreements in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. In particular, no Holder of Registrable Securities shall transfer registered securities (or securities convertible into, exerciseable or exchangeable for Registrable Securities) other than pursuant to Rule 144 or sale pursuant to an effective registration statement, whether or not the transferee shall have rights under this Agreement, without obtaining an agreement from the transferee to be bound by the terms of this Agreement; and in addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of Holders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent holder of Registrable Securities. (e) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. (f) Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. (g) Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. (h) Governing Law. All questions concerning the construction, validity and interpretation of this Agreement and the exhibits and schedules hereto will be governed by the internal law, and not the law of conflicts, of New York. (i) Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient or by telecopy, one day after being sent to the recipient by reputable overnight courier service (charges prepaid) or three days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications will be sent to the parties hereto at the addresses indicated on the signature page hereto and to the Company at the address indicated below: Bioject Medical Technologies Inc. 7620 S.W. Bridgeport Road Portland, Oregon 97224 Telecopier: 503-620-6431 Attention: President (j) Termination. This Agreement shall terminate on the date as of which each Holder has sold all remaining Registrable Securities in a transaction or transactions of the type described in Section 12 hereof. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. Bioject Medical Technologies Inc. By:/s/ James C. O'Shea Name: James C. O'Shea Title: President Elan International Services, Ltd. By:/s/ Kevin Insley Name: Kevin Insley Title: President and Chief Financial Officer EX-10.43 5 EXHIBIT 10.43 NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. NO SALE OR DISPOSITION OF THIS WARRANT OR OF ANY SHARES OF COMMON STOCK ISSUED PURSUANT HERETO MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (ii) AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY IN FORM AND CONTENT TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. BIOJECT MEDICAL TECHNOLOGIES INC. SERIES "K" WARRANT TO PURCHASE SHARES OF COMMON STOCK THIS CERTIFIES THAT, for value received, Elan International Services, Ltd., a Bermuda corporation, or its affiliates or assigns or any other holder of this Warrant, as permitted herein (each, a "Holder"), is entitled to subscribe for and purchase up to 1,750,000 shares as adjusted pursuant to Section 4 hereof(as so adjusted, the "Shares") of the fully paid and nonassessable common stock without par value (the "Common Stock"), of Bioject Medical Technologies Inc., an Oregon corporation (the "Company"), at the price of $2.50 per share (such price, and such other price as shall result, from time to time, from the adjustments specified in Section 4 below, the "Warrant Price"), subject to the provisions and upon the terms and conditions hereinafter set forth. 1. Term. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time, and from time to time, from and after the date hereof and until 5:00 p.m. New York City Time October 15, 2002. To the extent not exercised at 5:00 p.m. New York City Time on October 15, 2002, this Warrant shall completely and automatically terminate and expire, and thereafter it shall be of no force or effect whatsoever. 2. Method of Exercise; Payment; Issuance of New Warrant. (a) The purchase right represented by this Warrant may be exercised by the Holder(s), in whole or in part and from time to time, by the surrender of this Warrant (with the notice of exercise form attached hereto as Annex A duly executed) at the principal office of the Company and by the payment to the Company of an amount, in cash or other immediately available funds, equal to the then applicable Warrant Price per Share multiplied by the number of Shares then being purchased. (b) The person or persons in whose name(s) any certificate(s) representing shares of Common Stock shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised. Upon any exercise of the rights represented by this Warrant, certificates for the Shares purchased shall be delivered to the Holder(s) hereof as soon as possible and in any event within 10 business days of receipt of such notice and payment, and unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of Shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the holder hereof as soon as possible and in any event within such 30-day period. 3. Stock Fully Paid, Reservation of Shares. All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, fully paid and nonassessable, and will be free from all taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon the exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 4. Adjustment of Warrant Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to the adjustment from time to time upon the occurrence of certain events, as follows: (a) Reclassification, Merger, Etc. In case of (i) any reclassification, reorganization, change or conversion of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value), or (ii) any consolidation of the Company with or into another corporation (other than a merger or consolidation with another corporation in which the Company is the acquiring and the surviving corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or (iii) any sale of all or substantially all of the assets of the Company, then the Company, or such successor or purchasing corporation, as the case may be, shall duly execute and deliver to the holder of this Warrant a new Warrant or a supplement hereto (in form and substance reasonably satisfactory to the holder of this Warrant), so that the holder of this Warrant shall have the right to receive, at a total purchase price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and in lieu of the shares of Common Stock theretofore issuable upon the exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, reorganization, change, conversion, merger or consolidation by a holder of the number of shares of Common Stock then purchasable under this Warrant. Such new Warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 4. The provisions of this Section 4(a) shall similarly attach to successive reclassifications, reorganizations, changes, mergers, consolidations and transfers. (b) Subdivision or Combination of Shares. If the Company at any time during which this Warrant remains outstanding and unexpired shall subdivide or combine its Common Stock, (i) in the case of a subdivision, the Warrant Price shall be proportionately decreased and the number of Shares purchasable hereunder shall be proportionately increased, and (ii) in the case of a combination, the Warrant Price shall be proportionately increased and the number of Shares purchasable hereunder shall be proportionately decreased. (c) Stock Dividends; Etc. If the Company at any time while this Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Common Stock payable in Common Stock (or rights, options or warrants in respect thereof (collectively, "Options")), or (ii) issue any warrants, other than those currently outstanding or which the Company, prior to the date hereof has obligated itself to issue, or Options, other than up to 3,650,000 shares of Common Stock pursuant to a duly authorized and constituted stock option plan, to officers, directors, employees or consultants to the Company, having an exercise price (on a per-share basis) below the fair market value of a share of Common Stock on the date of authorization or grant of such Options, or (iii) make any other distribution with respect to Common Stock (except any distribution specifically provided for in Sections 4(a) and (b) above), the price at which the holder of this Warrant shall be able to purchase Shares shall be adjusted by multiplying the Warrant Price in effect immediately prior to such date of determination of the holders of securities entitled to receive such distribution, by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution, as if all of such Options had been exercised and the Company received the consideration payable in respect thereof. Upon each adjustment in the Warrant Price pursuant to this Section 4(c), the number of Shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter. (d) Repurchases or Redemptions of Common Stock or Options. If the Company at any time while this Warrant is outstanding and unexpired shall repurchase or redeem any outstanding shares of Common Stock or any Options, other than its shares of Series C Preferred Stock, at a price which is greater than the then-current Market Price (for purposes hereof, Market Price shall be defined as the average closing price of the Common Stock for the 10 trading days ending on the day that is two business days prior to the date upon which the Company shall purchase or redeem any outstanding shares of Common Stock), the Warrant Price shall thereupon be adjusted by multiplying the Warrant Price in effect at the time of such repurchase by a fraction (i) the numerator of which shall be Warrant Price in effect immediately prior to such repurchase or redemption and (ii) the denominator of which shall be the fair market value of the consideration paid for the shares of Common Stock and/or Options at the time of purchase. Upon each adjustment in the Warrant Price pursuant to this Section 4(d), the number of Shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter. (e) No Impairment. The Company will not, by amendment of its charter or bylaws or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment. (f) Notice of Adjustments. Whenever the Warrant Price or the number of Shares purchasable hereunder shall be adjusted pursuant to this Section 4, the Company shall prepare a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated. Such certificate shall be signed by its chief financial officer and shall be delivered to the holder of this Warrant. (g) Fractional Shares. No fractional shares of Common Stock will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor based on the fair market value of the Common Stock on the date of exercise as reasonably determined in good faith by the Company's Board of Directors. (h) Registration Requirement. This Warrant may not be exercised by or for the account or benefit of any person other than Elan International Services, Ltd., or a transferee permitted hereunder, unless (i) the exercise transaction is covered by an effective registration statement under the Securities Act of 1933, as amended (the "Act") and any applicable state securities laws; or (ii) registration under the Act, or any applicable state securities laws is not required, and the Company has received an opinion of counsel to such effect, in form and content satisfactory to the Company. (i) Transferrability. This Warrant shall be non-transferrable prior to February 1, 1998 and thereafter shall be transferrable only to (i) affiliates of the Holder or (ii) five non-affiliates thereof who are accredited institutions (as defined under Regulation D of the Securities Exchange Act of 1934, as amended). 5. Compliance with Securities Act; Disposition of Warrant or Shares of Common Stock.(a) The holder of this Warrant, by acceptance hereof, agrees that this Warrant and the Shares to be issued upon exercise hereof are being acquired for investment and that such holder will not offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon exercise hereof except under circumstances which will not result in a violation of applicable securities laws. This Warrant and all Shares issued upon exercise of this Warrant (unless registered under the Act) shall be stamped or imprinted with a legend in substantially the following form: "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS RELATED THERETO OR (ii) AN OPINION OF COUNSEL FOR THE HOLDER, IN FORM AND CONTENT SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. (b) With respect to any offer, sale or other disposition of this Warrant or any Shares acquired pursuant to the exercise of this Warrant prior to registration of such Shares, the holder hereof and each subsequent holder of this Warrant agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such holder's counsel in form and content satisfactory to the Company, if requested by the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state law then in effect) of this Warrant or such Shares and indicating whether or not under the Act certificates for this Warrant or such Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with the Act. Promptly upon receiving such written notice and satisfactory opinion, if so requested, the Company, as promptly as practicable, shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such Shares, all in accordance with the terms of the notice delivered to the Company. Notwithstanding the foregoing, this Warrant or such Shares may be offered, sold or otherwise disposed of in accordance with Rule 144 as promulgated under the Act ("Rule 144"), provided that the Company shall have been furnished with such information as the Company may reasonably request to provide a reasonable assurance that the provisions of Rule 144 have been satisfied. Each certificate representing this Warrant or the Shares thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to insure compliance with the Act, unless in the aforesaid opinion of counsel for the holder, such legend is not required in order to insure compliance with the Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. The shares issuable upon exercise of this Warrant are entitled to the benefit of certain registration rights as set forth in a Registration Rights Agreement dated as of the date hereof between the Company and the initial Holder named herein. 6. Rights as Shareholders. No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be deemed the holder of Shares or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 7. Representations and Warranties. The Company represents and warrants to the holder of this Warrant as follows: (a) This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms; (b) The Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable; and (c) The execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company's charter or bylaws, as amended, or by-laws, and do not and will not constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound. 8. Miscellaneous. (a) This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by both the Company and the holders of warrants that are outstanding at the time to purchase a majority of the shares of Common Stock issuable upon exercise of this Warrant remaining on the date of the action taken. (b) Any notice, request or other document required or permitted to be given or delivered to the holder hereof or the Company shall (i) be in writing, (ii) be delivered personally or sent by mail or overnight courier to the intended recipient to each such holder at its address as shown on the books of the Company or to the Company at the address indicated therefor on the signature page of this Warrant, unless the recipient has given notice of another address, and (iii) be effective on receipt if delivered personally, tw business days after dispatch if mailed, and one business day after dispatch if sent by overnight courier service. (c) Subject to the satisfaction of all of the provisions of this Warrant, the holder hereof may transfer all or any portion of this Warrant at any time to (i) an affiliate of the Holder initially namd herein and (ii) an aggregate of five non-affiliated institutions or investment vehicles, who are accredited investors (as that term is defined under Regulation D of the Securities Act of 1933). (d) The Company covenants to the holder hereof that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft or destruction, upon receipt of a bond or indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant, the Company will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant. (e) The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. (f) This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York. [Signature page follows] IN WITNESS WHEREOF, Bioject Medical Technologies Inc. has executed this Warrant as of the date set forth below. Bioject Medical Technologies Inc. By:/s/ James C. O'Shea Name: James C. O'Shea Title: President Dated: October 15, 1997 Annex A NOTICE OF EXERCISE To: Bioject Medical Technologies Inc. 1.The undersigned hereby elects to purchase ____________ shares of Common Stock of Bioject Medical Technologies Inc. pursuant to the terms of the attached Warrant, and tenders herewith full payment of the purchase price of such shares, in cash or other immediately available funds. 2.Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below: _____________________________________(Name) (Address) 3.The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. Signature:__________________________ Name:_____________________________ Address:___________________________ ___________________________ ___________________________ Social Security or taxpayer identification number:________________________ EX-10.44 6 Exhibit 10.44 PROMISSORY NOTE U.S.$12,015,000 New York, New York October 15, 1997 FOR VALUE RECEIVED, and good and valuable consideration, the undersigned, Bioject Medical Technologies Inc., an Oregon corporation with offices at 7620 SW Bridgeport Road, Portland, Oregon 97224 (the "Company"), unconditionally promises to pay to Elan International Services, Ltd., a Bermuda corporation (together with any other holder of this Note, as permitted herein, the "Holder"), at such place as may be designated by the Holder to the Company, the principal amount of U.S.$12,015,000, together with interest thereon from and after the date hereof, at a rate per annum equal to the lesser of (x) 9% and (y) the maximum rate of interest permitted by applicable law, compounded on a semi-annual basis commencing as of the First Payment Date (as defined below). The rate of interest payable per annum shall be adjusted to 12% effective from and after January 1, 1998. Interest only shall be payable 180 days from and after the date hereof (the "First Payment Date"); thereafter interest only shall be payable quarterly in arrears on each March 31, June 30, September 30 and December 31 (or if any such date is not a business day, the following business day). This Note shall be non-negotiable prior to February 1, 1998 (other than to affiliates of the Holder originally named herein) and thereafter shall be transferrable only to (i) affiliates of the Holder or (ii) up to an aggregate of five institutional investors that are non-affiliates of the Holder and that are accredited investors(as defined under Regulation D of the Securities Exchange Act of 1934, as amended). The entire principal amount of this Note (together with any accrued and unpaid interest hereon) shall be due and payable on October 15, 2001; however, all or any portion of the outstanding principal amount of this Note (together with any accrued and unpaid interest hereon) may be prepaid at any time by the Company from and after February 1, 1998 upon at least 10 days written notice to the Holder. This Note (and interest hereon) shall immediately become due and payable, without notice or demand, upon the occurrence of any of the following events: (i) the filing by or against the Company of any petition under the United States Bankruptcy Code or any similar state proceeding (which, in the event of a filing against the Company, is not cured or stayed within 30 days); (ii) the application for, or appointment of, a receiver of the Company's property; (iii) the appointment of a committee of the Company's creditors; (iv) the making by the Company of an assignment for benefit of creditors; or (v) the default in payment or performance of this Note or of any of the obligations of this Note which shall remain uncured 30 days after written notice thereof has been given by the Holder to the Company. The Company hereby waives grace, demand and presentment for payment, notice of nonpayment, protest and notice of protest, diligence, filing suit, and all other notice and promises to pay the Holder its costs of collection of all amounts due hereunder, including reasonable attorneys' fees. In the event of any default or breach of this Note by the Company, this Note (and accrued and unpaid interest on this Note) shall, in addition to all other rights and remedies of the Holder hereunder and under applicable law, be and become immediately due and payable; this Note shall continue to bear interest after such default or breach at the interest rate otherwise in effect hereunder plus 3% per annum (but in any event not in excess of the maximum rate of interest permitted by applicable law). This Note is made in connection with a Securities Purchase Agreement dated as of the date hereof (the "Agreement") between the Company and the Holder originally named herein. This Note is the Promissory Note referred to in the Agreement and the Holder is intended to be afforded the benefits thereof. This Note may not be changed or terminated orally and shall be construed in accordance with the internal laws of the State of New York without reference to the principles of conflicts of laws thereof. [Signature page to follow] IN WITNESS WHEREOF, the Company has executed this Note on the date first above written. Bioject Medical Technologies Inc. By:/s/ James C. O'Shea Name: James C. O'Shea Title: President ATTEST: By:/s/Peggy J. Miller Name: Peggy J. Miller EX-10.45 7 EXHIBIT 10.45 NEWCO SUBSCRIPTION AND STOCKHOLDERS AGREEMENT SUBSCRIPTION AND STOCKHOLDERS AGREEMENT, dated as of October 15, 1997, by and among Bioject JV Subsidiary Inc., an Oregon corporation ("Newco" or the "Company"), Bioject Medical Technologies Inc., an Oregon corporation ("Bioject"), and Elan International Services, Ltd., a Bermuda corporation ("EIS"; together with Bioject, the "Stockholders"; each sometimes referred to herein as a "Stockholder"). R E C I T A L S: A. The Company desires to issue and sell to EIS and Bioject (the "Purchasers"), and the Purchasers desire to purchase from the Company, for aggregate consideration of $15,000,000, shares of the Company's common stock (the "Shares"), without par value (the "Common Stock"), as set forth herein. The Shares issuable hereunder are entitled to the benefits of a Registration Rights Agreement between the Company and the Purchasers dated as of the date hereof and attached hereto as Exhibit A (the "Registration Rights Agreement"). B. After consummation of the transactions contemplated hereby, EIS initially shall own Shares representing 19.9% of the Common Stock, and Bioject initially shall own Shares representing 80.1% of the Common Stock. C. The Stockholders and the Company desire to set forth herein certain provisions relating to the governance of the Company and transfer of shares of Common Stock and/or certain securities convertible, exchangeable or exercisable for or into shares of Common Stock. A G R E E M E N T: The parties agree as follows: ARTICLE I DEFINITIONS; AUTHORIZATIONS; CLOSINGS 1.1 Defined Terms. As used herein, the terms below shall have the following meanings: "Affiliate" shall have the meaning set forth in Section 12b-2 of the Securities Exchange Act of 1934, as amended. "Company Securities" shall mean the Common Stock and any additional share of Common Stock issued or issuable to any Stockholder upon the conversion, exchange or exercise of any other security or right. "Fully Diluted Common Stock" shall mean all of the Common Stock of the Company, assuming conversion, exercise or exchange of all outstanding convertible, exchangeable or exercisable securities, options, warrants and similar instruments for or into Common Stock. "License Agreement" shall mean that agreement dated as of the date hereof by and between Elan Corporation, plc, an Irish public limited company ("Elan") and the Company in connection with the licensing of Glucose Monitor Technology (as defined therein) by Elan to the Company. "Permitted Transferee" shall mean (i) any Affiliate of EIS or Bioject, as applicable, or (ii) any other Person who acquires Company Securities from EIS or Bioject in a transaction that is exempt from registration under the Securities Act of 1933, as amended, other than under Rule 144 thereunder or a similar rule or regulation providing for the sale of securities to the public. "Person" shall mean an individual, partnership, joint venture, corporation, trust or unincorporated organization, a government or any department, agency or political subdivision thereof, or any other entity. "Restricted Securities" shall mean Company Securities issued pursuant to this Agreement, including Common Stock and any securities convertible, exercisable or exchangeable for or into Common Stock or any other shares of Common Stock hereafter acquired by EIS or Bioject. "Stockholder" means any of EIS, Bioject, any Permitted Transferee or any other Person who subsequently becomes bound by this Agreement as a holder of Company Securities. 1.2 Authorizations; Etc. The Company has authorized the issuance (i) to EIS of 199,000 shares of Common Stock, and (ii) to Bioject of 801,000 shares of Common Stock issuable as provided in Section 1.3 hereof. 1.3 Closings. (a) The closing of the transactions contemplated hereby (the "Closing") shall occur on the date hereof, at the offices of counsel to EIS in New York, New York, or such other place as the parties may agree. (b) As a condition of the Closing of the transactions contemplated hereby, the Company shall produce its certificate of incorporation and by-laws for review and approval (which approval shall not be unreasonably withheld) by EIS. (c) At the Closing, (x) the Company shall issue and sell to EIS, and EIS shall purchase from the Company, upon the terms and subject to the conditions set forth herein, for an aggregate purchase price of $2,985,000, 199,000 shares of Common Stock and (y) the Company shall issue and sell to Bioject, and Bioject shall purchase from the Company, upon the terms and conditions set forth herein, for an aggregate purchase price of $12,015,000, 801,000 shares of Common Stock. (d) At the Closing, the parties hereto shall execute and deliver to each other, as applicable: (1) (i) certificates in respect of the Common Stock described above; (ii) the Registration Rights Agreement (together with this Agreement, the "Newco Transaction Documents"); and (2) certificates as to the incumbency of the officers executing the Newco Transaction Documents and such other matters as shall be customary for transactions of this type and as may be reasonably requested by each of the parties hereto of the other. In addition, at the Closing, the Company shall cause to be delivered to the Purchasers an opinion of counsel, in a form reasonably satisfactory to the Purchasers, covering the due authority of the Company and the due authorization of the Newco Transaction Documents, the due issuance of the Securities, no violations of law or charter documents and other customary matters, which opinion may contain customary exceptions. (e) The Shares will be issued under an exemption or exemptions from registration under the Securities Act; accordingly, the certificates evidencing the Shares shall, upon issuance, contain the following legend: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT UNDER ANY CIRCUMSTANCES BE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT. The Common Stock is afforded the rights and benefits as described in the Registration Rights Agreement. 1.4 Additional Funding. (a) Each of the Stockholders agrees to provide additional funding to the Company (the "Additional Funding") following the earlier of the date Bioject's shareholders approve the issuance of Preferred Stock to EIS and February 1, 1998; provided, that (i) the Company's board of directors shall determine, in good faith, that such funds are required at such time for development of the first product or products based upon Glucose Monitor Technology (as defined in the License Agreement, the "Products") and the Glucose Monitor Technology, and (ii) such development of the Products is consistent with the Company's then- current business plan, which business plan shall have been approved by the Company's board of directors and approved by Bioject and EIS (which approval shall not be unreasonably withheld or delayed). (b) The Stockholders shall be obligated to provide the additional funds in combined increments of $1 million, which shall be provided 80.1% by Bioject, to an aggregate maximum of $4,005,000, and 19.9% by EIS, to an aggregate maximum of $995,000. In no event shall EIS be obligated to fund an amount in excess of 25% of the amount of Additional Funding provided by Bioject to the Company, and in any event, EIS's obligation to provide it's portion of the Additional Funding shall terminate at the conclusion of the 30-month period following the earlier of the date Bioject's shareholders approve the issuance of Preferred Stock to EIS and February 1, 1998. (c) It shall be a condition to the Stockholders' respective obligations to make any Additional Funding, or payments in connection with Further Development (as defined below), that (A) there shall be no material default or breach by the Company of any material obligations under any of the Newco Transaction Documents (as hereinafter defined) or any other agreement between the Company or any of its affiliates, on the one hand, and the Stockholders or any of their affiliates, on the other hand, (B) the Company shall have executed and delivered to each Stockholder each document or instrument that shall be customary and appropriate for such transaction as reasonably determined by such Stockholder and the Company, and (C) each Stockholder shall consent to make its own portion of such Additional Funding or Further Development payments, which consent shall not be unreasonably withheld or delayed. (d) At the option of the Company's Board of Directors, the Additional Funding shall be evidenced by Common Stock or Preferred Stock of the Company, with such price and terms as the Board of Directors shall in good faith determine. 1.5. Further Development. After such time, if any, as Newco has expended [confidential portion omitted] million on research and development in connection with the research, development and commercialization of the Products resulting from Glucose Monitor Technology (including the Additional Funding), in the event that the Company's board of directors shall reasonably determine in good faith that the Company shall require further funding in order to complete such research, development and commercialization (the "Further Development"), EIS shall undertake to provide such funding in accordance with the following limits and conditions: (a) the maximum contribution which must be made by EIS under this Section shall be [confidential portion omitted] million; (b) EIS shall have reasonably and in good faith determined that the Further Development funding is likely to result in the [confidential portion omitted], as contemplated by the Company's then-current business plan; (c) such funding shall be in minimum increments of $500,000; (d) the Company shall have a market capitalization (if publicly held), or a valuation as determined by a financial advisory or investment firm satisfactory to each of Bioject and EIS (if privately held) of less than [confidential portion omitted] million at the time of the Company's request for such funding; (e) such Further Development funding shall constitute senior debt of the Company, and be evidenced by a secured promissory note issued upon terms and conditions satisfactory to each of EIS and the Company acting reasonably, which shall be consistent with similar "arms-length" transactions then-being consummated in the capital markets; such promissory note to bear interest at a rate per annum equal to [confidential portion omitted] for a term of three years. 1.6 Representations and Warranties of the Company. The Company hereby represents and warrants to each of the Stockholders as follows, as of the date hereof: (a) Organization. The Company is a corporation duly organized, validly existing and is in good standing under the laws of Oregon, and has all the requisite corporate power and authority to own and lease its properties, to carry on its business as presently conducted and as proposed to be conducted and to carry out the transaction contemplated hereby. The Company is qualified and in good standing to do business in each jurisdiction in which the nature of the business conducted or the property owned by it requires such qualification, except where the failure to so qualify would not reasonably be expected to have a material adverse effect on the business of the Company. (b) Capitalization. (i) The authorized and outstanding shares of capital stock of the Company as of the date hereof, are set forth on Schedule 1.6(b)(i) hereto. (ii) All of the outstanding shares of capital stock of the Company have been issued in accordance with applicable laws and regulations governing the sale and purchase of securities and none of such shares carries preemptive or similar rights. (c) Authorization. The execution, delivery and performance by the Company of this Agreement and each of the Transaction Documents, have been duly authorized by all requisite corporate actions; and this Agreement and each other of the Transaction Documents have been duly executed and delivered by the Company and are the valid and binding obligation of the Company, enforceable against it in accordance with their respective terms. (d) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Newco Transaction Documents, the issuance, sale and delivery of the Common Stock (and the issuance of any Common Stock issuable upon the conversion of any convertible security, and compliance with the provisions hereof by the Company, will not (a) violate any provision of applicable law, statute, rule or regulation applicable to the Company or any ruling, writ, injunction, order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to the Company or any of their respective properties or assets or (b) conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or result in the creation of, any Encumbrance (as defined below) upon any of the properties or assets of the Company under, the charter or organizational documents of either or any material contract to which the Company is a party, except where such violation, conflict or breach would not, individually or in the aggregate, have a material adverse effect on the Company. As used herein, "Encumbrance" shall mean any liens, charges, encumbrances, equities, claims, options, proxies, pledges, security interests, or other similar rights of any nature. (e) Approvals. No permit, authorization, consent or approval of or by, or any notification of or filing with, any person or entity (governmental or private) is required in connection with the execution, delivery or performance of this Agreement by the Company. (f) Authorization of the Shares; Etc. The issuance, sale and delivery by the Company of the Shares, as contemplated by the Newco Transactions Documents, have been duly authorized by all requisite corporate action of the Company, and such securities, when issued as contemplated hereby, will be validly issued and outstanding, fully paid and nonassessable and not subject to preemptive or any other similar rights of the stockholders of the Company or others. (g) Disclosure. To the best of its knowledge, this Agreement and the other Newco Transaction Documents do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained herein and therein not misleading. 1.7 Representations and Warranties of the Stockholders. Each of EIS and Bioject hereby represent and warrant to the Company as follows: (a) Organization. Each of the Stockholders is a corporation duly organized, validly existing and, if applicable, in good standing under the laws of its jurisdiction of organization and has all the requisite corporate power and authority to own and lease its properties, to carry on its business as presently conducted and as proposed to be conducted and to carry out the transactions contemplated hereby. (b) Authority. Each of the Stockholders has full legal right, power and authority to enter into this Agreement and the Newco Transaction Documents and to perform their respective obligations hereunder and thereunder, which have been duly authorized and by all requisite corporate action. This Agreement is the valid and binding obligation of the Stockholders, enforceable against them in accordance with its terms. (c) No Conflicts. The execution, delivery and performance by each of the Stockholders of this Agreement and the other Newco Transaction Documents, purchase of the Common Stock (and the purchase of any Common Stock issuable upon the conversion or exercise of any convertible or exchangeable security), and compliance with the provisions hereof by the Stockholders will not (a) violate any provision of applicable law, statute, rule or regulation applicable to the Stockholders or any ruling, writ, injunction, order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to the Stockholders or any of their respective properties or assets or (b) conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or result in the creation of, any Encumbrance (as defined below) upon any of the properties or assets of the Stockholders under, the charter or organizational documents of either or any material contract to which the Stockholders are a party, except where such violation, conflict or breach would not, individually or in the aggregate, have a material adverse effect on the Stockholders. As used herein, "Encumbrance" shall mean any liens, charges, encumbrances, equities, claims, options, proxies, pledges, security interests, or other similar rights of any nature (d) Approvals. No permit, authorization, consent or approval of or by, or any notification of or filing with, any person or entity (governmental or private) (collectively, "Approval") is required in connection with the execution, delivery or performance of this Agreement by the Stockholders; nor is any Approval required by the Stockholders in order to fulfill their respective obligations hereunder or under any of the Newco Transaction Documents. (e) Investment Representations. Each of the Stockholders is capable of evaluating the merits and risks of their respective investment in the Company. None of the Stockholders have been formed solely for the purpose of making this investment and are acquiring the Securities and, as applicable, the underlying Common Stock for investment for their own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution of any part thereof. The Stockholders understand that the Shares have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or applicable state and other securities laws by reason of a specific exemption from the registration provisions of the Securities Act and applicable state and other securities laws, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Stockholders' representations as expressed herein. The Stockholders understand that no public market now exists for any of the Shares and that there is no assurance that a public market will ever exist for the Shares. ARTICLE II BOARD OF DIRECTORS 2.1 Board of Directors. From and after the date hereof, and until such time as the Company's securities are registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or listed on a stock exchange or quoted on an electronic quotation system, each of EIS and Bioject and their respective Permitted Transferees shall use its best efforts (including voting all of their shares of Common Stock) to cause the board of directors of the Company to consist of five directors, designated as set forth below; provided that the parties shall make such adjustments in the arrangements required by this Section 2.1 as the board of directors shall deem necessary and proper in connection with obtaining material investments from unaffiliated third parties: (a) Designation of Directors. EIS shall be entitled to designate one director (the "EIS Director") and Bioject shall be entitled to designate four directors (the "Bioject Directors"). The Company's by-laws shall not provide for a board of directors that contains staggered terms. As of the date hereof, the Company shall have a five-member board. (b) Committees of the Board of Directors and Subsidiaries. The rights to designate directors provided in Section 2.1(a) shall also apply, proportionally, to any committees of the board of directors and to any board of directors of any Subsidiary of the Company. 2.2 Removal. In the event that (a) EIS shall request, by written notice thereof to Bioject, that an EIS Director be removed, or (b) Bioject shall request, by written notice thereof to EIS, that a Bioject Director be removed, then each Stockholder shall take all actions required by Section 2.4 to effect such result. If the majority of the Company's board of directors shall object to the appointment of any director on a commercially reasonable basis, such director shall be removed (or not elected) and the party that designates such director shall designate another director. 2.3 Vacancies. In the event that a vacancy is created on the board of directors at any time by the death, disability, retirement, resignation or removal of any director, or otherwise there shall exist or occur any vacancy on the board, each of EIS and Bioject and each of their respective Permitted Transferees hereby agrees to cause the director(s) designated by it and then serving (subject to each such person's fiduciary duties as a director) to vote for that individual designated to fill such vacancy and serve as a director by whichever of the Stockholders that had designated (pursuant to Section 2.1 hereof) the director whose death, disability, retirement, resignation or removal resulted in such vacancy on the board; provided, however, that such other individual so designated may not previously have been a director of the Company who was removed for cause from the board. 2.4 Covenant to Vote. (a) Each of EIS and Bioject and each of their respective Permitted Transferees hereby agrees to take or assist such other Persons to take all actions necessary to call, or cause the Company or the appropriate officers or directors of the Company to call, a special or annual meeting of stockholders of the Company and to vote all shares of Common Stock owned or held of record by such Person at any such annual or special meeting in favor of, or to consent by written consent in lieu of any such meeting to, the election of a board of directors consistent with, and the taking of any other action to effect the intent of, this Article II. In addition, each of EIS and Bioject and each of their respective Permitted Transferees agrees to vote, or consent with respect to, the shares of Common Stock owned or held of record by such Person, or over which such Person has voting control, upon any other matter arising under this Agreement submitted to a vote or consent of the Company's stockholders in a manner so as to implement the terms of this Agreement. (b) Approval of a majority of the board shall be required for any and all material determinations regarding the Company, including (i) acquisition of material assets (including without limitation, intellectual property), (ii) incurrence of debt or liens, (iii) payment of dividends or distributions in respect of or redemption of equity, (iv) disposition of material assets and changes in business lines or material Company budgets, or (v) any other transaction not in the ordinary course of business. 2.5 Termination of Voting Agreements. The covenants and agreements contained in this Article II shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement and (ii) the date that either (1) EIS and its Permitted Transferees and (2) Bioject and its Permitted Transferees each own in the aggregate Securities representing less than 5% of the Fully Diluted Common Stock of the Company. ARTICLE III TRANSFERS OF RESTRICTED SECURITIES 3.1 General. From and after the date hereof, and until such time as the Company's securities are registered under the Exchange Act, or listed on a stock exchange or quoted on an electronic quotation system, no Stockholder shall, directly or indirectly, sell, assign, pledge, encumber, hypothecate or otherwise transfer (in each case, a "Transfer") any Company Securities except in accordance with this Agreement. The Company shall not, and shall not permit any transfer agent or registrar for the Company Securities to, transfer upon the books of the Company any Company Securities from any Stockholder to any Transferee (as hereinafter defined), in any manner, except in accordance with this Agreement, and any purported transfer not in compliance with this Agreement shall be void. 3.2 Legends; Securities Subject to this Agreement. In the event a Stockholder shall Transfer any Restricted Securities (including any such Restricted Securities acquired after the date hereof) to any Person (all Persons acquiring Restricted Securities from a Stockholder, as described in this Article III, regardless of the method of transfer, shall be referred to collectively as "Transferees" and individually as a "Transferee") in accordance with this Agreement, such securities shall nonetheless bear legends as provided in this Agreement and in Section 6.1 hereof, as the case may be; provided, however, that the provisions of this Section 3.2 shall not apply in respect of a sale of Restricted Securities in a registered public offering under the Securities Act or pursuant to Rule 144, or any successor rule under the Securities Act. 3.3 No Violations or Breach. Notwithstanding any other provision of this Agreement, no Stockholder shall, directly or indirectly, Transfer any Restricted Securities at any time if such action would constitute a violation of any federal or state securities or blue sky laws or a breach of the conditions to any exemption from registration of Restricted Securities under any such laws or a breach of any undertaking or agreement of such Stockholder entered into pursuant to such laws or in connection with obtaining an exemption thereunder. 3.4 Transferee Bound. No Stockholder shall effect a Transfer of Restricted Securities unless such Transferee shall agree to be bound by this Agreement, and shall further agree to permit EIS or Bioject, as applicable, to act on their behalf in accordance with the provisions of this Agreement. ARTICLE IV RIGHT OF FIRST OFFER 4.1 Transfers by the Stockholders. (a) Notice of Intention. If at any time a Stockholder shall desire to Transfer any Restricted Securities owned by it (such Stockholder desiring to Transfer such securities being referred to herein as a "Selling Stockholder"), in any transaction or series of related transactions, then such Selling Stockholder shall deliver prior written notice of its desire to Transfer (a "Notice of Intention") to (i) the Company and (ii) the party who is not the Selling Stockholder (for purposes of this Article IV, the party who is "not the Selling Stockholder" shall mean Bioject if the Selling Stockholder is the EIS or an EIS Transferee, and EIS if the Selling Stockholder is Bioject or a Bioject Transferee), and (iii) any Permitted Transferees, as applicable, setting forth such Selling Stockholder's desire to make such Transfer, the number and class of Company Securities proposed to be transferred (the "Offered Shares") and the proposed form of transaction (the "Transaction Proposal"), together with any documentation relating thereto and the price at which such Selling Stockholder proposes to Transfer the Offered Shares (the "Offer Price"). The "Right of First Offer" provided for in this Article IV shall be subject to any "Tag-Along Right" benefitting a Stockholder which may be provided for by Article V, subject to the exceptions set forth therein. The parties shall make such adjustments in the arrangements required by this Article IV as the board of directors shall deem necessary and proper in connection with obtaining material investments from unaffiliated third parties. (b) Notice of Exercise. Upon receipt of the Notice of Intention, the party who is not the Selling Stockholder shall have the right to purchase at the Offer Price the Offered Shares, exercisable by the delivery of notice to the Selling Stockholder (the "Notice of Exercise"), with a copy to the Company within 10 business days from the date of receipt of the Notice of Intention. If no such Notice of Exercise has been delivered by the party who is not the Selling Stockholder within such 10 business-day period, or such Notice of Exercise does not relate to all the Offered Shares covered by the Notice of Intention, then the Selling Stockholder shall be entitled to Transfer the Offered Shares to the intended Transferee. (c) Obligation to Sell. In the event that the party who is not the Selling Stockholder exercises its right to purchase Offered Shares in accordance with Section 4.1(b), then the Selling Stockholder must sell the Offered Shares to such party, in the amounts set forth in the Notice of Intention, after not less than five business and not more than 15 business days from the date of the delivery of the Notice of Exercise. (d) Termination. The rights and obligations of each of the Stockholders pursuant to the Right of First Offer provided herein shall terminate with respect to each such party on the earlier of (i) the tenth anniversary of the date hereof and (ii) with respect to such party's rights, the first date that EIS on the one hand, and Bioject on the other, plus, in each case, their respective Permitted Transferees, beneficially own, in the aggregate, Company Securities representing less than 2 1/2% of the Fully Diluted Common Stock and, with respect to each such group's obligations, the first date that the other group (including Permitted Transferees) beneficially own, in the aggregate, Company Securities representing less than 2 1/2% of the Fully Diluted Common Stock and (iii) the date the Company's common stock is registered under the Exchange Act or listed on a stock exchange or quoted on an electronic quotation system. 4.2 Closing. At the closing of the purchase of Offered Shares (scheduled in accordance with Section 4.1(c)), the Selling Stockholder shall deliver certificates evidencing the Offered Shares being sold, duly endorsed, or accompanied by written instruments of transfer in form reasonably satisfactory to the party who is not the Selling Stockholder, duly executed by the Selling Stockholder, free and clear of any adverse claims, against payment of the purchase price therefor in cash, and such other customary documents as shall be necessary in connection therewith. ARTICLE V TAG-ALONG RIGHTS 5.1 Tag-Along Procedures. For purposes of this Section "Common Stock" shall include Common Stock underlying securities convertible thereto; provided that the parties shall make such adjustments in the arrangements required by this Section 5.1 as the board of directors shall deem necessary and proper in connection with obtaining material investments from unaffiliated third parties. (a) Tag-Along Right. Subject to Section 5.3, any one Stockholder (the "Transferring Stockholder") shall not Transfer (either directly or indirectly), in any one transaction or series of related transactions, to any Person or group of Persons, Company Securities representing, in the aggregate, more than 5% of the Common Stock unless the terms and conditions of such Transfer shall include an offer to the other Stockholders (the "Remaining Stockholders"), at the same price and on the same terms and conditions as the Transferring Stockholder has agreed to sell its Company Securities. (b) Notice. In the event a Transferring Stockholder proposes to Transfer any Common Stock in a transaction subject to this Section 5.1, it shall notify, or cause to be notified, the Remaining Stockholders in writing of each such proposed Transfer. Such notice shall set forth: (i) the name of the transferee and the number of shares of Common Stock proposed to be transferred, (ii) the proposed amount and form of consideration and terms and conditions of payment offered by the transferee (the "Transferee Terms") and (iii) that the transferee has been informed of the "Tag-Along Right" provided for in this Section 5.1, if such right is applicable, and has agreed to purchase shares of Common Stock from the Transferring Stockholder in accordance with the terms hereof. (c) Exercise. The Tag-Along Right may be exercised by the Remaining Stockholders by delivery of a written notice to the Transferring Stockholder (the "Tag-Along Notice") within five business days following receipt of the notice specified in the preceding subsection. The Tag-Along Notice shall state the number of shares of Common Stock owned by the Remaining Stockholder which the Remaining Stockholder wishes to include in such Transfer; provided, however, that without the written consent of the Transferring Stockholder, the number of shares belonging to the Remaining Stockholder included in such Transfer may not be greater than such Remaining Stockholder's percentage beneficial ownership of Common Stock (on a fully diluted basis) multiplied by the total number of shares of common stock to be sold by both the transferring stockholder and all remaining stockholders. Upon receipt of a Tag-Along Notice, the Transferring Stockholder shall be obligated to transfer at least the entire number of shares of Common Stock set forth in the Tag-Along Notice to the Transferee on the Transferee Terms; provided, however, that the Transferring Stockholder shall not consummate the purchase and sale of any shares hereunder if the Transferee does not purchase all shares. If no Tag- Along Notice has been delivered to the Transferring Stockholder prior to the expiration of the five-day period referred to above and if the provisions of this Section have been complied with in all respects, the Transferring Stockholder shall have the right for a 60 day calendar day period to Transfer Common Stock to the Transferee on the Transferee Terms without further notice to any other party, but after such 60-day period, no such Transfer may be made without again giving notice to the Remaining Stockholders of the proposed Transfer and complying with the requirements of this Article V. 5.2 Closing. At the closing of any Transfer of Common Stock subject to this Article V, the Transferring Stockholder, and the Remaining Stockholder, in the event such Tag-Along Right is exercised, shall deliver certificates evidencing such shares of Common Stock as have been Transferred by each, duly endorsed, or accompanied by written instruments of transfer in form reasonably satisfactory to the Transferee, free and clear of any adverse claim, against payment of the purchase price therefor. 5.3 Exceptions. Notwithstanding the foregoing, this Article V shall not apply to any sale of Common Stock pursuant to an effective registration statement under the Securities Act in a bona fide public offering, sales made in compliance with Rule 144, or any successor rule under the Securities Act. 5.4 Termination. This Article V shall terminate on earlier of (i) the seventh anniversary of the date hereof or (ii) the first date that either EIS or Bioject beneficially own shares of Common Stock representing less than 2 1/2% of the Fully Diluted Common Stock or (iii) the date the Company's common stock is registered under the Exchange Act or listed on a stock exchange or quoted on an electronic quotation system. ARTICLE VI MISCELLANEOUS 6.1 Administrative Services Agreement. In consideration of EIS's agreement to invest in the Company, as soon as practicable after the date hereof, the Company and Bioject shall enter into an administrative services and support agreement (which shall be reasonably satisfactory to EIS) which shall contain provisions to the effect that Bioject shall provide commercially reasonable and customary support and administrative services to the Company in connection with the performance of the Company's obligations hereunder and under the License Agreement. 6.2 Endorsement of Stock Certificates. Each of the Stockholders hereby agrees that, in addition to any legends required by any other agreement, each outstanding certificate representing shares of Company Securities subject to this Agreement shall bear an endorsement reading substantially as follows until the restrictions (including without limitation, the transfer restrictions) with respect to such Company Securities are no longer effective: THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF OCTOBER 15, 1997, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF WITHOUT COMPLYING WITH THE TERMS AND CONDITIONS OF SUCH AGREEMENTS. 6.3 Term. Except as otherwise provided herein, this Agreement shall terminate upon the sale of all Company Securities now owned by EIS and Bioject (or their respective Permitted Transferees) in compliance with the provisions hereof to parties not bound hereby, as provided herein. 6.4 Injunctive Relief. The parties hereto hereby agree and acknowledge that it will be impossible to measure in money the damages that would be suffered if any party should breach any obligation, covenant or representation herein imposed or made, and that, in the event of such breach, a non-breaching party will be irreparably damaged and will not have an adequate remedy at law. Any such non-breaching party shall, therefore, be entitled to injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the other parties hereto shall raise the defense that there is an adequate remedy at law. 6.5 Notices. All notices, other communications or documents provided for or permitted to be given hereunder, shall be made in writing and shall be given either personally by hand-delivery, by telex or facsimile transmission, by mailing the same in a sealed envelope, certified first-class mail, postage prepaid, return receipt requested, or by air courier guaranteeing overnight delivery: (i) if to the Company or Bioject, to: Bioject JV Subsidiary Inc. or Bioject Medical Technologies Inc. 7620 S.W. Bridgeport Road Portland, Oregon 97224 Telecopier: 503-620-6431 Attention: President with a copy to: Bogle & Gates P.L.L.C. Two Union Square 601 Union Street Seattle, Washington 98101-2346 Telecopier:206-620-2660 Attention: Christopher Barry (ii) if to EIS, to: Elan International Services, Ltd. Flatts Smiths SL04 Bermuda Telecopier: (441) 292-2224 Attention: President with a copy to: Brock Fensterstock Silverstein McAuliffe & Wade LLC 153 East 53rd Street New York, New York 10022 Telecopier: (212) 371-5500 Attention: David Robbins Each Stockholder, by written notice given to the Company in accordance with this Section 6.5 may change the address to which notices, other communication or documents are to be sent to such Stockholder. All notices, other communications or documents shall be deemed to have been duly given when received. Whenever pursuant to this Agreement any notice is required to be given by any Stockholder to any other Stockholder or Stockholders, such Stockholder may request from the Company a list of addresses of all Stockholders of the Company, which list shall be promptly furnished to such Stockholder. 6.6 Assignment. Except as expressly permitted hereunder, neither this Agreement nor any of the rights or obligations hereunder may be assigned by any party hereto without the prior written consent of the other parties hereto. Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the parties and successors and assigns of each of the parties. If any Stockholder shall acquire any Restricted Securities in any manner, whether by operation of law or otherwise, such Restricted Securities shall be held subject to all of the terms of this Agreement. 6.7 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon without regard to the principles of conflicts of laws. 6.8 Headings. The headings in this Agreement are inserted for convenience of reference only and shall not constitute a part of this Agreement. 6.9 Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 6.10 Amendments and Waiver. No provision of this Agreement may be amended, nor performance of any covenant or agreement waived, except by a written instrument executed by each of the Company, EIS and Bioject. Neither a failure nor a delay in exercising any right, power or privilege of a party hereunder shall operate as a waiver of, or a consent to the modification of, the terms hereof unless given by that party in writing. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach. 6.11 Inspection. So long as this Agreement shall be in effect, this Agreement shall be made available for inspection by any stockholder of the Company at the principal offices of the Company. 6.12 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same Agreement. [Signature page follows] IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. Bioject JV Subsidiary Inc. By:/s/ James C. O'Shea Name: James C. O'Shea Title: President Bioject Medical Technologies Inc. By:/s/ James C. O'Shea Name: James C. O'Shea Title: President Elan International Services, Ltd. By:/s/ Kevin Insley Name: Kevin Insley Title: President and Chief Financial Officer EX-10.46 8 EXHIBIT 10.46 BIOJECT JV SUBSIDIARY INC. REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT is made as of October 15, 1997, by and among Bioject JV Subsidiary Inc., an Oregon corporation (the "Company"), and Elan International Services, Ltd., a Bermuda corporation ("EIS"). R E C I T A L S: A.Pursuant to a Subscription and Stockholders Agreement (the "Subscription Agreement") dated as of the date hereof, EIS has acquired certain shares of common stock without par value (the "Common Stock") of the Company. B. The closing under the Subscription Agreement has occurred on the date hereof; it being a condition to such closing that the parties execute and deliver this Agreement. C. The parties desire to set forth herein their agreement related to the granting of certain registration rights to the Holders (as defined below) of any Common Stock or securities convertible into Common Stock. A G R E E M E N T: The parties hereto agree as follows: 1. Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings: "Affiliate" of any Person shall mean any other Person controlling, controlled by or under common control with such particular Person. In the case of a natural Person, his Affiliates include members of such Person's immediate family, natural lineal descendants of such Person or a trust for the exclusive benefit of such Person and his immediate family and natural lineal descendants. "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Holders", "holders" or "Holders of Registrable Securities" shall mean EIS and any Person who shall have acquired Registrable Securities from EIS as permitted herein pursuant to Section 9 hereof, either individually or jointly as the case may be. "Person" shall mean an individual, a partnership, a company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental quasi-governmental entity or any department, agency or political subdivision thereof. "Registrable Securities" means (i) any Common Stock issued or issuable under the Subscription Agreement, (ii) any Common Stock issued or issuable upon conversion of or in connection with securities convertible thereinto, and (iii) any Common Stock issued or issuable in respect of the securities referred to in clause (ii) above upon any stock split, stock dividend, recapitalization or similar event; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction (including a transaction pursuant to a registration statement under this Agreement and transaction pursuant to Rule 144 promulgated under the Securities Act) in which registration rights are not transferred pursuant to Section 9 hereof. The terms "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement. "Registration Expenses" shall mean all expenses, other than Selling Expenses, incurred by the Company in complying with Sections 2 or 3 hereof, including without limitation, all registration, qualification and filing fees, exchange listing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, the expense of any special audits incident to or required by any such registration and the reasonable fees and disbursements, not to exceed $10,000 in the aggregate, of one counsel for the Holders, such counsel to be selected by Holders holding a majority of the Registrable Securities held by the Holders and included in such registration. "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Holders and the costs of any accountants, counsel or other experts retained by the Holders. "1934 Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 2. Demand Registrations. (a) Requests for Registration. Any Holder which holds Registrable Securities representing at least the majority of the Registered Securities then outstanding has the right at any time from and after the earlier to occur of the (i) Company's Initial Public Offering of securities (an "IPO"), if any and (ii) third anniversary of the date hereof, to request registration under the Securities Act of all or part of their Registrable Securities on Form S-1, S-2 or S-3 (if available) or any similar registration (each, a "Demand Registration"), such form to be selected by the Company, it being understood that the Company is not required to file a registration statement with respect to common stock not deemed outstanding within the meaning of General Instruction I.B.3. of Form S-3. Each written request for a Demand Registration (as defined below) shall specify the approximate number of Registrable Securities requested to be registered. Within 10 days after receipt of any such request, the Company will give written notice of such requested registration to all other Holders of Registrable Securities and, if they request to be included in such registration, the Company shall include such Holders' Registrable Securities in such offering if they have responded affirmatively within 10 days after the receipt of the Company's notice. The Holders in aggregate will be entitled to request two Demand Registrations. A registration will not count as one of the permitted Demand Registrations until it has become effective (unless such Demand Registration has not become effective due solely to the fault of the Holders requesting such registration, including a request by such Holders that such registration be withdrawn). In the event that the Holders shall exercise their right to Demand Registration under this section, and such Demand Registration shall be underwritten, the Company and the Holders exercising such right shall bear the costs associated with the underwritten on an equal basis. The Company shall pay all Registration Expenses in connection with any Demand Registrations which are not underwritten in accordance with the terms hereof. (b) Priority on Demand Registrations. If a Demand Registration is an underwritten offering and the managing underwriters advise the Company in writing that in their opinion the number of Registrable Securities and, if permitted hereunder, other securities requested to be included in such offering, exceeds the number of Registrable Securities and other securities, if any, which can be sold in such offering without adversely affecting the marketability of the offering, the Company will include in such registration: (i) first, the Registrable Securities requested to be included in such registration by the Holders (or, if necessary, such Registrable Securities pro rata among the Holders thereof based upon the number of Registrable Securities owned by each such Holder) together with any securities held by third parties (x) who may become Holders under this Agreement or (y) holding a similar, previously granted right to be included in such registration; and (ii) thereafter, other securities requested to be included in such registration. (c) Restrictions on Demand Registrations. The Company may postpone for up to six months in any 12 month period, the filing or the effectiveness of a registration statement for a Demand Registration if the Company determines in good faith that such Demand Registration would reasonably be expected to have a material adverse effect on any proposal or plan by the Company to engage in any financing, acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or similar transaction or would require disclosure of any information that the board of directors of the Company determines in good faith the disclosure of which would be detrimental to the Company; provided, that in such event, the Holders initially requesting such Demand Registration will be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration will not count as one of the permitted Demand Registrations hereunder and the Company will pay any Registration Expenses in connection with such withdrawn registration. (d) Selection of Underwriters. The Holders will have the right to select the investment banker(s) and manager(s) to administer an offering pursuant to a Demand Registration, subject to the Company's approval, which will not be unreasonably withheld. (e) Other Registration Rights. Except as provided in this Agreement, so long as any Holder owns any Registrable Securities, the Company will not grant to any Persons the right to request the Company to register any equity securities of the Company, or any securities convertible or exchangeable into or exercisable for such securities, which is in conflict with the rights granted to the Holders hereunder, without the prior written consent of the Holders of at least 50% of the Registrable Securities held by the Holders; it being understood that the Company may grant rights to other Persons to (i) participate in Piggyback Registrations so long as such rights are subordinate or pari passu to the rights of the holders of Registrable Securities with respect to such Piggyback Registrations and (ii) request registrations so long as the Holders of Registrable Securities are entitled to participate in any such registrations with such Persons pro rata on the basis of the number of shares owned by each such Holder. 3. Piggyback Registrations. (a) Right to Piggyback. At any time the Company shall propose to register Common Stock under the Securities Act (other than in a registration on Form S-3 relating to sales of securities to participants in a Company dividend reinvestment plan, S-4 or S-8 or any successor form or in connection with an acquisition or exchange offer or an offering of securities solely to the existing stockholders or employees of the Company) (each, a "Piggyback Registration"), the Company will give prompt written notice to all Holders of Registrable Securities of its intention to effect such a registration and, subject to Section 3(b) and the other terms of this Agreement, will include in such registration all Registrable Securities which are permitted under applicable securities laws to be included in the Form of registration statement selected by the Company and with respect to which the Company has received written requests for inclusion therein within 15 days after the receipt of the Company's notice. (b) Priority on Piggyback Registrations. If a Piggyback Registration is an underwritten registration of Common Stock, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, the Company will include in such registration: (i) the securities the Company proposes to sell; (ii) the Registrable Securities requested to be included in such registration by the Holders and any securities requested to be included in such registration by any other Person, pro rata among the Holders of such Registrable Securities and such other Persons, on the basis of the number of shares owned by each of such Holders subject to the rights of such other Persons under agreements existing as of the date hereof; and (iii) thereafter, other securities requested to be included in such registration. The Holders of any Registrable Securities included in such a registration must execute an underwriting agreement in form and substance satisfactory to the managing underwriters. (c) Right to Terminate Registration. If, at any time after giving written notice of its intention to register any of its securities as set forth in Section 3(a) and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to each Holder of Registrable Securities and thereupon be relieved of its obligation to register any Registrable Securities in connection with such registration (provided that the Company shall pay the Registration Expenses in connection therewith). (d) Selection of Underwriters. The Company will have the right to select the investment banker(s) and manager(s) to administer an offering pursuant to a Piggyback Registration. 4. Expenses of Registration. Subject to the final sentence of Section 2(a), Registration Expenses incurred in connection with all registrations pursuant to Section 2 shall be borne by the Company. All Selling Expenses relating to securities registered on behalf of the Holders of Registrable Securities shall be borne by such holders. Registration expenses incurred in connection with registration pursuant to Section 3 shall be borne by the Company and the Holders on a pro rata basis in accordance with the number of Shares sold by each. 5. Holdback Agreements. (a) The Company agrees (i) not to effect any public offering, sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during the seven days prior to and during the 90-day period beginning on the effective date of any underwritten Demand Registration or any underwritten Piggyback Registration (except as part of such underwritten registration or pursuant to registrations on Form S-8 or any successor form), unless the underwriters managing the registered public offering otherwise agree, and (ii) to use reasonable efforts to cause each holder of at least 5% (on a fully- diluted basis) of its Common Stock, or any securities convertible into or exchangeable or exercisable for Common Stock, purchased from the Company at any time after the date of this Agreement (other than in a registered public offering) to agree not to effect any public sale or distribution (including sales pursuant to Rule 144) of any such securities during such periods (except as part of such underwritten registration, if otherwise permitted), unless the underwriters managing the registered public offering otherwise agree. (b) Each holder of Registrable Securities agrees, if requested by the managing underwriter or underwriters in an underwritten offering of securities of the Company, not to effect any offer, sale, distribution or transfer (or offer or agree to do so) of Registrable Securities, including a sale pursuant to Rule 144 (or any similar provision then effect) under the Securities Act (except as part of such underwritten registration), during the seven-day period prior to, and during the 90-day period (or, in the case of an IPO, 180- day period) or such shorter period as may be agreed to by the parties hereto) following the effective date of such Registration Statement to the extent timely notified in writing by the Company or the managing underwriter or underwriters. 6. Registration Procedures. Whenever the Holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement, the Company will use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of distribution thereof, and pursuant thereto the Company will as expeditiously as possible: (a) subject to Section 2(c) hereof, prepare and file with the Commission a registration statement on any form for which the Company qualifies with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective (provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will (i) furnish to the counsel selected by the Holders copies of all such documents proposed to be filed, which documents will be subject to the review of such counsel, and (ii) notify each holder of Registrable Securities covered by such registration of any stop order issued or threatened by the Commission); (b) subject to Section 2(c) hereof, prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than nine months and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement; (c) furnish to each seller of Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller; (d) use its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdiction as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6(d), (ii) subject itself to taxation in any jurisdiction or (iii) consent to general service of process in any such jurisdiction); (e) notify each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of any such seller, the Company will prepare a supplement of amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading; provided that the Company shall not be required to amend the registration statement or supplement the Prospectus for a period of up to six months if the board of director determines in good faith that to do so would reasonably be expected to have a material adverse effect on any proposal or plan by the Company to engage in any financing, acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or similar transaction or would require the disclosure of any information that the board of directors determines in good faith the disclosure of which would be detrimental to the Company, it being understood that the period for which the Company is obligated to keep the Registration Statement effective shall be extended for a number of days equal to the number of days the Company delays amendments or supplements pursuant to this provision. Upon receipt of any notice pursuant to this section 6(e) Holders shall suspend all offers and sales of securities of the Company and all use of any prospectus until advised by the Company that offers and sales may resume, and shall keep confidential the fact and content of any notice given by the Company pursuant to this section 6(e) (f) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if not so listed, to be listed on the NASD automated quotation system and, if listed on the NASD automated quotation system, use its best efforts to secure designation of all such Registrable Securities covered by such registration statement as a NASDAQ National market system security within the meaning of Rule 11Aa2-1 of the Commission or, failing that, to secure NASDAQ authorization for such Registrable Securities and, without limiting the generality of the foregoing, to arrange for at least two market makers to register as such with respect to such Registrable Securities with the NASD; (g) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement; (h) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including without limitation, effecting a stock split or a combination of shares); (i) make available for inspection by a representative of the Holders of Registrable Securities included in the registration statement, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonable requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; (j) otherwise use its reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months beginning with the first day of the Company's first full calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; (k) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any common stock included in such registration statement for sale in any jurisdiction, the Company will use its reasonable best efforts promptly to obtain the withdrawal of such order; and (l) obtain a so-called "cold comfort" letter from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters. 7. Indemnification. (a) The Company agrees to indemnify, to the fullest extent permitted by applicable law, each Holder of Registrable Securities, its officers and directors and each Person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities, expenses or any amounts paid in settlement of any litigation, investigation or proceeding commenced or threatened (collectively, "Claims") to which each such indemnified party may become subject under the Securities Act insofar as such Claim arose out of (i) any untrue or alleged untrue statement of material fact contained, on the effective date thereof, in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such holder expressly for use therein or by such holder's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such holder with a sufficient number of copies of the same. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities. (b) In connection with any registration statements in which a holder of Registrable Securities is participating, each such Holder will furnish to the Company in writing such customary information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus (the "Seller's Information") and, to the fullest extent permitted by applicable law will indemnify the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act) against any and all Claims to which each such indemnified party may become subject under the Securities Act insofar as such Claim arose out of (i) any untrue or alleged untrue statement of material fact contained, on the effective date thereof, in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) any violations by such Person of any federal, state or common law rule or regulation applicable to such Person and relating to action required of or inaction by such Person in connection with any such registration; provided that with respect to a Claim arising pursuant to clause (i) or (ii) above, the material misstatement or omission is contained in such Seller's Information; provided, further, that the obligation to indemnify will be individual to each Holder and will be limited to the net amount of proceeds received by such Holder from the sale of Registrable Securities pursuant to such registration statement. (c) Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (but the failure to provide such notice shall not release the indemnifying party of its obligation under paragraphs (a) and (b), unless and then only to the extent that, the indemnifying party has been prejudiced by such failure to provide such notice) and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. (d) The indemnifying party shall not be liable to indemnify an indemnified party for any settlement, or consent to judgment of any such action effected without the indemnifying party's consent (but such consent will not be unreasonably withheld). Furthermore, the indemnifying party shall not, except with the approval of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to each indemnified party of a release from all liability in respect to such claim or litigation without any payment or consideration provided by each such indemnified party. (e) If the indemnification provided for in this Section 7 is unavailable to an indemnified party under clauses (a) and (b) above in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company, the underwriters, the sellers of Registrable Securities and any other sellers participating in the registration statement from the sale of shares pursuant to the registered offering of securities to which indemnity is sought but also the relative fault of the Company, the underwriters the sellers of Registrable Securities and any other sellers participating in the registration statement in connection with the statement or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, the underwriters, the sellers of Registrable Securities and any other sellers participating in the registration statement shall be deemed to be based on the relative relationship of the total net proceeds from the offering (before deducting expenses) to the Company, the total underwriting commissions and fees from the offering (before deducting expenses) to the underwriters and the total net proceeds from the offering (before deducting expenses) to the sellers of Registrable Securities and any other sellers participating in the registration statement. The relative fault of the Company, the underwriters, the sellers of Registrable Securities and any other sellers participating in the registration statement shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by registration statement and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (f) The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and will survive the transfer of securities. 8. Participation in Underwritten Registrations. No Person may participate in any registration hereunder which is underwritten unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements, (b) as expeditiously as possible notifies the Company of the occurrence of any event as a result of which such prospectus contains an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (c) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 9. Transfer of Registration Rights. The rights granted to any Person under this Agreement may be assigned to a transferee or assignee in connection with any transfer or assignment of Registrable Securities by a Holder; provided, that: (a) such transfer may otherwise be effected in accordance with applicable securities laws, (b) if not already a party hereto, the assignee or transferee agrees in writing prior to such transfer to be bound by the provisions of this Agreement applicable to the transferor, (c) such transferee shall own Registrable Securities representing at least 1,000,000 shares of Common Stock, subject to the Anti-dilution Adjustments, and (d) EIS shall act as agent and representative for such Holder for the giving and receiving of notices hereunder. 10. Information by Holder. Each Holder shall furnish the Company such written information regarding such Holder and any distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration qualification or compliance referred to in this Agreement. 11. Exchange Act Compliance. After the IPO, the Company shall comply with all of the reporting requirements of the Securities Exchange Act of 1934 applicable to it and shall comply with all other public information reporting requirements of the Commission which are conditions to the availability of Rule 144 for the sale of the Registrable Securities. The Company shall cooperate with each Purchaser in supplying such information as may be necessary for such Purchaser to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of Rule 144. 12. Limitation on Registration. The Company shall not be obligated to effect a registration of any Holder's Registrable Securities pursuant to Sections 2 or 3 hereof if all of the Registrable Securities have been sold under Rule 144, Regulation S or similar provision under the Securities Act so that there is no further restriction on the transfer by the transferee. The Company shall not be required to include any Registerable Securities of a Holder in a registration if all of such Holder's Registerable Securities could be sold within a three month period pursuant to Rule 144 or other similar rule or regulation. 13. Miscellaneous. (a) No Inconsistent Agreements. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Holders of Registrable Securities in this Agreement. (b) Remedies. Any Person having rights under any provision of this Agreement will be entitled to enforce such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement; provided that in no event shall any Holder have the right to enjoin or interfere with any offering of securities by the Company. (c) Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only upon the prior written consent of the Company and Holders of at least 50% of the Registrable Securities; provided, that without the prior written consent of all the Holders, no such amendment or waiver shall reduce the foregoing percentage. (d) Successors and Assigns. Subject to Section 9 hereof, all covenants and agreements in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. In particular, no Holder of Registrable Securities shall transfer registered securities (or securities convertible into, exerciseable or exchangeable for Registrable Securities) other than pursuant to Rule 144 or sale pursuant to an effective registration statement, whether or not the transferee shall have rights under this Agreement, without obtaining an agreement from the transferee to be bound by the terms of this Agreement; and in addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of Holders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent holder of Registrable Securities. (e) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. (f) Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. (g) Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. (h) Governing Law. All questions concerning the construction, validity and interpretation of this Agreement and the exhibits and schedules hereto will be governed by the internal law, and not the law of conflicts, of New York. (i) Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient or by telecopy, one day after being sent to the recipient by reputable overnight courier service (charges prepaid) or three days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications will be sent to the parties hereto at the addresses indicated on the signature page hereto and to the Company at the address indicated below: Bioject Medical Technologies Inc. 7620 S.W. Bridgeport Road Portland, Oregon 97224 Telecopier: 503-620-6431 Attention: President (j) Termination. This Agreement shall terminate on the date as of which each Holder has sold all remaining Registrable Securities in a transaction or transactions of the type described in Section 12 hereof. (k) Additional Parties. Subsequent purchasers of Common Stock, or securities convertible, exercisable or exchangeable into of for Common Stock, may become party to this Agreement upon execution by the Company and such purchaser of a counterpart hereto, whereupon such Persons may become Holders hereunder and their Common Stock or securities may become Registerable Securities hereunder; provided that, such Person may be entitled to registration rights equal to, but in no event greater than, the Holders initially named herein. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. Elan International Services, Ltd. By:/s/ Kevin Insley Name: Kevin Insley Title: President and Chief Financial Officer Bioject JV Subsidiary Inc. By:/s/ James C. O'Shea Name: James C. O'Shea Title: President -----END PRIVACY-ENHANCED MESSAGE-----