-----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, AhjwEwS82Ji0NZvApS18eo1QwTSqOQDKr7oAnzx3vbN1Q/PupvT4LNSqS7QJarzv vPzXSG45XOknPhuj7TLysA== 0000912282-00-000103.txt : 20000321 0000912282-00-000103.hdr.sgml : 20000321 ACCESSION NUMBER: 0000912282-00-000103 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20000320 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: S-3 SEC ACT: SEC FILE NUMBER: 333-32848 FILM NUMBER: 574053 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 S-3 1 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on March 20, 2000 Registration No. 333-______ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------------------- BIOJECT MEDICAL TECHNOLOGIES INC. (Exact name of registrant as specified in its charter) Oregon 93-1099680 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation) 7620 SW Bridgeport Road Portland, Oregon 97224 (503) 639-7221 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) James C. O'Shea Chief Executive Officer Bioject Medical Technologies Inc. 7620 SW Bridgeport Road Portland, Oregon 97224 (503) 639-7221 (Name, address, including zip code, and telephone number, including area code, of agent for service) With Copies to: Christopher J. Barry Dorsey & Whitney LLP 1420 Fifth Avenue Seattle, Washington 98006 (206) 903-8800 ------------- Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] - --------------- If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE Title of securities Amount to be Proposed maximum offering Proposed maximum aggregate Amount of to be registered registered(1) price per share(2) offering price(2) registration fee - ----------------------------------------------------------------------------------------------------------------------------------- Common Stock, no par value 65,796 $12.375 $814,226 $215
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, this registration statement also covers such indeterminate number of shares of common stock as may be required to prevent dilution resulting from stock splits, stock dividends or similar events, or changes in the exercise price of the warrants. (2) Estimated solely for purposes of computing the registration fee and based upon the average of the high and low sale prices for the common stock on March 17, 2000, as reported on the Nasdaq SmallCap Market. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Subject to completion, dated March 20, 2000 PROSPECTUS 65,796 Shares BIOJECT MEDICAL TECHNOLGIES INC. Common Stock Shares of common stock of Bioject Medical Technologies Inc. are being offered by this Prospectus. The shares will be sold from time to time by the selling Shareholders named in this Prospectus. We will not receive any of the proceeds from the sale of the shares. Our common stock is traded on the Nasdaq SmallCap Market under the symbol "BJCT." On March 17, 2000, the last sale price of our common stock as reported on the Nasdaq SmallCap Market was $12.8125 per share. ------------------------ Investment in the common stock involves a high degree of risk. See section titled "Risk Factors" beginning on page 7 to read about certain factors you should consider before buying shares of common stock. ------------------------ Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ------------------------ The information in this Prospectus is not complete and may be changed. The Selling Shareholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This Prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. The date of this Prospectus is _______________, 2000. TABLE OF CONTENTS About This Prospectus.................................................2 Where You Can Find More Information...................................3 About Bioject Medical Technologies Inc. ..............................4 Forward-Looking Statements............................................7 Risk Factors..........................................................7 Use of Proceeds......................................................13 Selling Shareholders.................................................13 Plan of Distribution.................................................14 Legal Matters........................................................14 Experts..............................................................14 ABOUT THIS PROSPECTUS This Prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the "SEC"). The Prospectus relates to 65,796 shares (the "Shares") of our common stock which the Selling Shareholders named in this Prospectus (the "Selling Shareholders") may sell from time to time. We will not receive any of the proceeds from these sales. We have agreed to pay the expenses incurred in registering the Shares, including legal and accounting fees. The Shares have not been registered under the securities laws of any state or other jurisdiction as of the date of this Prospectus. Brokers or dealers should confirm the existence of an exemption from registration or effectuate such registration in connection with any offer and sale of the Shares. This Prospectus describes certain risk factors that you should consider before purchasing the Shares. See "Risk Factors" beginning on page 7. You should read this Prospectus together with the additional information described under the heading "Where You Can Find More Information." 2 WHERE YOU CAN FIND MORE INFORMATION Federal securities law requires us to file information with the SEC concerning our business and operations. We file annual, quarterly and special reports, proxy statements and other information with the SEC. You can read and copy these documents at the public reference facility maintained by the SEC at Judiciary Plaza, 450 Fifth Street, NW, Room 1024, Washington, DC 20549. You can also copy and inspect such reports, proxy statements and other information at the following regional offices of the SEC: - -------------------------------------------------------------------------------- New York Regional Office Chicago Regional Office Seven World Trade Center Citicorp Center Suite 1300 500 West Madison Street, Suite 1400 New York, NY 10048 Chicago, Illinois 60661 - -------------------------------------------------------------------------------- Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public on the SEC's web site at http://www.sec.gov. You can also inspect our reports, proxy statements and other information at the offices of the Nasdaq Stock Market. The SEC allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information that we incorporate by reference is considered to be part of this Prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"): 1. Our Annual Report on Form 10-K for the year ended March 31, 1999. 2. Our Quarterly Reports on Form 10-Q for the periods ended June 30, 1999, September 30, 1999 (and as amended on January 14, 2000 and March 15, 2000) and December 31, 1999 (as amended on March 15, 2000 and March 17, 2000). 3. The Definitive Proxy Statement for the Annual Meeting of Bioject on Schedule 14A, dated August 12, 1999. 4. Our Current Reports on Form 8-K filed on April 20, 1999, June 29, 1999, July 13, 1999 and March 3, 2000. 5. The description of our Common Stock contained in our registration statement under Section 12 of the Exchange Act, dated January 29, 1987, and any amendment or report updating such description, including without limitation, Amendment No. 1 thereto dated October 5, 1987, Amendment No. 2 thereto dated October 26, 1987, Amendment No. 3 thereto dated December 23, 1987, Amendment No. 4 thereto dated January 27, 1988 and Amendment No. 5 thereto dated February 9, 1988, our Current Reports on Form 8-K dated December 17, 1992, November 29, 1995 and December 14, 1995. This Prospectus is part of a registration statement we filed with the SEC (Registration No. 333-______). You may request a free copy of any of the above filings by writing or calling: Chris Farrell Secretary 7620 SW Bridgeport Road Portland, Oregon 97224 (503) 639-7221 You should rely only on the information incorporated by reference or provided in this Prospectus or any supplement to this Prospectus. We have not authorized anyone else to provide you with different information. The Selling Shareholders should not make an offer of these Shares in any state where the offer is not permitted. You should not assume that the information in this Prospectus or any supplement to this Prospectus is accurate as of any date other than the date on the cover page of this Prospectus or any supplement. 3 ABOUT BIOJECT MEDICAL TECHNOLOGIES INC. We develop, manufacture and market jet injection systems for needle-free drug delivery. We sell our products directly to healthcare providers. We also license our technology to leading pharmaceutical and biotechnology companies for whose products our technology provides increased medical efficacy or enhanced market acceptance. Our needle-free operations are conducted by Bioject Inc., an Oregon corporation, which is our wholly owned subsidiary. Bioject Inc. commenced operations in 1985. Bioject Medical Technologies Inc. was formed in December 1992 for the sole purpose of acquiring all the capital stock of Bioject Medical Systems Ltd., a company organized under the laws of British Columbia, Canada, in a stock-for-stock exchange. This stock acquisition established Bioject Medical Technologies Inc., a U.S. domestic corporation, as the publicly-traded parent company of Bioject Inc. and Bioject Medical Systems Ltd. Bioject Medical Systems Ltd. was then terminated in fiscal 1997. Our blood glucose monitoring development operations were conducted by Marathon Medical Technologies Inc. ("Marathon Medical") (formerly Bioject JV Subsidiary Inc.), an Oregon corporation, which is our wholly owned subsidiary. The blood glucose monitoring development operation was discontinued in June 1999. All references to Bioject are to Bioject Medical Technologies Inc. and its subsidiaries, unless the context requires otherwise. Bioject's executive offices and operations are located at 7620 SW Bridgeport Road, Portland, Oregon 97224, and our telephone number is (503) 639-7221. We manufacture and market a professional needle-free injection system, the Biojector(R) 2000, which allows healthcare professionals to inject medications through the skin, both intramuscularly and subcutaneously, without a needle. Using this technology to administer injections virtually eliminates the risk of contaminated needlestick injuries and the resulting blood-borne pathogen transmission, which is a major concern throughout the healthcare industry. The Biojector 2000 system consists of two components: a handheld, reusable jet-injector (the "Biojector 2000" or "B-2000") and a sterile, single-use disposable syringe (the "Biojector syringe"). We also manufacture and market a device that allows the Biojector syringe to be filled without a needle (the "Vial Adapter"). The Vial Adapter may be purchased either separately or as a pre-packaged component of the B-2000 system. The B-2000 system is capable of delivering needle-free injections in varying doses up to 1 ml. We has also developed the B-2020 and B-4000 jet-injection systems. The B-2020 system is similar in design and intended use to the B-2000 system except that it is designed to deliver injections in varying doses up to 1.5 ml. The B-4000 system is intended to be used by non-professionals to self-administer injections of various medications in varying doses up to 1 ml. We have not yet received regulatory clearance to begin selling either the B-2020 or the B-4000 systems. We are also developing a single-use disposable and multi-use disposable injector, the "Iject" intended to be used by both professionals and non-professionals to either administer or self-administer medications up to 1 ml. We have not yet applied for regulatory clearance for this product. We also market the Vitajet 3 (R) ("Vitajet"), a spring-powered, needle-free self-injection device, the rights to which were acquired in a transaction with Vitajet Corporation in March 1998. The Vitajet currently has regulatory clearance for administering injections of insulin. Our long-term goal is to establish our needle-free injection systems as the preferred drug delivery method for all medications administered by intramuscular or subcutaneous injection. Bioject focuses its current product sales efforts for the Biojector 2000 system on: i) flu immunization clinics and providers; ii) healthcare providers in states such as California, where legislation is in place that favors alternatives to needle-syringes; iii) potentially high volume, national accounts that will use or distribute Bioject's products across a large region; and iv) the U.S. military. We are also focusing efforts to sell the B-2000 to multiple sclerosis patients through a distributor. We have established manufacturing capability for the Vitajet at our manufacturing facility in Portland, Oregon, and plans to enter into agreements with distributors to sell the Vitajet to insulin users. We are also developing various marketing strategies to sell the Vitajet directly to end-users. We are actively pursuing strategic partnering relationships with a number of pharmaceutical and biotechnology companies under which we plan to grant specified rights or licenses to some or all of our products. The strategy anticipates that the rights or licenses will allow strategic partners to i) use the licensed products for specific applications or purposes or ii) market the licensed products in conjunction with certain of their products. 4 Under a January 1995, agreement with Hoffman LaRoche Inc. ("Roche") Bioject agreed to develop a needle-free injection system for Roche to use with certain of its products. The B-2020 system was designed as a result of this agreement. Bioject and Roche intended that Roche would be granted worldwide rights to distribute the B-2020 for a specific class of medications. In June 1999, Roche advised us that because of the additional time and cost required to gain regulatory clearance to use the B-2020 in conjunction with the Roche drugs and because of an overall change in its marketing strategy for the drugs in question, it did not intend to pursue distributing the B-2020 and is relinquishing its exclusive rights to the product. In September 1997, we entered into a joint venture agreement with Elan Corporation plc. for the development and commercialization of certain blood glucose monitoring technology which we licensed from Elan. In May 1999, rather than continue to fund the cost of its development, we entered into negotiations to sell Marathon's blood glucose monitoring technology, and certain fixed assets related to developing the technology, to a third party. The sale was completed on June 30, 1999. The gross proceeds from the sale were $4 million. The gain realized on the sale was approximately $2.9 million, net of associated expenses of the transaction and a $500,000 provision for expenses to wind-up Marathon's operations. The terms of the sale of the blood glucose monitoring technology also provide for Bioject to receive a royalty on net sales of future products, if any, which may be developed in the future from the licensed technology. The agreement calls for a royalty of three percent of net sales until Bioject has received total royalty payments of $10 million. The agreement then calls for royalty payments of one percent of net sales thereafter. There can be no assurance that future products will be successfully developed from the blood glucose monitoring technology or that such products, if developed, will be commercially successful. In connection with the sale of the blood glucose monitoring technology, we entered into an agreement with Elan to purchase its 19.9% common stock interest in Marathon. We now own 100% of Marathon's stock. In July 1998, we entered into an agreement with Merck & Co. which provided Merck limited-term rights to use the B-2000 needle-free injection system with selected Merck vaccines. As part of the agreement, Bioject also granted Merck exclusive rights to negotiate a long-term license to the B-2000 for certain medical indications. We received $1.5 million in non-refundable fees under this agreement in the fiscal year ended March 31, 1999. In February 1999, citing a refinement in its vaccine development strategy, Merck advised us that it would not continue discussions to seek long-term license rights to our technology. No further fees are due to us from Merck pursuant to the agreement. In June 1999, we entered into a binding letter agreement with Amgen Inc. that provided for an evaluation of Bioject's jet injection technology for use with certain biopharmaceutical products. Terms of the agreement provided for up to $500,000 in licensing and technology fees based upon meeting certain milestones. On February 29, 2000, we entered into a development and clinical supply agreement with Amgen for the delivery of an Amgen product with our Iject(TM) needle-free injection system. In connection with the agreement, Amgen made a $1.5 million investment in Bioject's common stock. In October 1999, Bioject announced a strategic alliance with AngioSense, Inc. to jointly develop innovative delivery systems to treat cardiovascular disease. Bioject's needle-free drug delivery systems will be modified for delivering bio-therapeutic solutions as a surgical instrument for minimally invasive surgical procedures with several proprietary catheters being developed by AngioSense for catheter-based cardiology interventions. The alliance grants AngioSense an exclusive license to Bioject's Biojector 2000(R) and Vitajet 3(R) jet injectors, as well as a customized version of Bioject's Iject(TM), a single-use disposable jet injector with a self-contained, pre-filled medication cartridge to treat or diagnose cardiac or cardiovascular diseases. According to the terms of the agreement, Bioject received an equity position of approximately 10 percent in AngioSense upon completion of certain product development milestones. In addition to a long-term manufacturing and supply agreement with AngioSense, Bioject will receive royalties on future product sales, and will receive significant funding to support the development of the disposable injector portion of the AngioSense delivery system. In December 1999, Bioject and Serono Laboratories, Inc., the U.S. affiliate of Ares-Serono, S.A., a leading biotechnology company headquartered in Geneva, Switzerland, announced an exclusive license agreement in the U.S. and Canada to deliver Serono's Saizen(R) recombinant human growth hormone with a customized version of Bioject's Vitajet(TM)3 needle-free delivery system. In connection with the agreement, Serono paid an undisclosed license fee to Bioject and signed a definitive supply agreement that commences upon FDA clearance. Clinical studies evaluating the 5 bioequivalence of Saizen(R)when delivered with the Bioject needle-free delivery system have been completed. A 510(k) pre-market notification has been submitted to the U.S. Food and Drug Administration (FDA). A primary focus of our research efforts is on clinical research in the area of DNA-based vaccines and medications. To the best of our knowledge, our jet injection device is being used in two clinical studies relating to development of DNA-based medications. Currently, to the best of our knowledge, our devices are being used in more than twenty DNA-related clinical research projects both within and outside of the United States. These research projects are being conducted by companies leading the development of DNA-based medications as well as by the leading universities and governmental institutions conducting research in this area. Included in these studies are a Phase I clinical trial of a DNA-based lymphoma vaccine being conducted at Stanford University and a Phase I clinical trial of a DNA-based malaria vaccine being conducted at the U.S. Naval Medical Research Center. Preliminary data from clinical studies with animals indicates that the use of the Biojector technology may result in better performance of some DNA-based medications than can be achieved through use of conventional needle-syringes. There can be no assurance that further clinical studies will prove conclusively that our technology is more effective in delivering DNA-based medications than alternative delivery systems that are currently available or that may be developed in the future. In January 2000, we filed a resale registration statement on Form S-3, to register 164,619 shares of our common stock for resale by selling shareholders. The registration statement was declared effective on March 17, 2000. We will not receive any proceeds from the sale of any of the shares sold by selling shareholders. In February 2000, we filed a resale registration statement on Form S-3, to register 372,869 shares of our common stock for resale by selling shareholders. The registration statement was declared effective on March 20, 2000. We will not receive any proceeds from the sale of any of the shares sold by selling shareholders. In March 2000, we filed a resale registration statement on Form S-3, to register the 65,796 shares of common stock issued to Amgen in connection with the license and development agreement. "Biojector," "Bioject," "Vitajet" and "Medivax" are registered trademarks of Bioject. 6 FORWARD-LOOKING STATEMENTS Certain statements in this Registration Statement and the documents incorporated by reference to this Registration Statement constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect," "is expected," "anticipates" or "does not anticipate," "plans," "estimates" or "intends," or stating that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Bioject, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, among others, those described under "Risk Factors" and identified as risks or uncertainties in the documents incorporated by reference. RISK FACTORS An investment in the Shares involves a high degree of risk. You should consider carefully the following risk factors, together with the other information in this Prospectus, before buying any Shares. You should also be aware that certain statements contained in this Prospectus that are not related to historical results are forward-looking statements. These forward-looking statements, such as statements of our strategies, plans, objectives, expectations and intentions, involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. If our products are not accepted by the market, our business could fail. Our success will depend on market acceptance of our needle-free injection drug delivery systems, the Biojector 2000 system and the Vitajet system and on market acceptance of other products under development. If our products do not achieve market acceptance, our business could fail. Currently, the dominant technology used for intramuscular and subcutaneous injections is the hollow-needle syringe. Needle-syringes, while low in cost, have limitations, particularly relating to contaminated needlestick injuries. Use of the Biojector 2000 system for intramuscular and subcutaneous injections eliminates the associated risk of these injuries; however, the cost per injection is significantly higher. The Biojector 2000, the Vitajet system or any of our products under development may be unable to compete successfully with needle-syringes. A previous needle-free injection system manufactured by us did not achieve market acceptance and is no longer being marketed. The Biojector 2000 was introduced in January 1993. Failure of the Biojector 2000 system to gain market acceptance would have a material adverse effect on our financial condition and results of operations. We have reduced our sales force and may be unable to penetrate targeted market segments. In late fiscal 1998 and early fiscal 1999, we dramatically reduced our direct product sales force from one national and five district sales managers to one national sales manager who is focused on specifically targeted market segments. This reduced sales force may not have sufficient resources to adequately penetrate one or more of the targeted market segments. Further, if the sales force is successful in penetrating one or more of the targeted market segments, we are unable to assure you that our products will be accepted in those segments or that product acceptance will result in product revenues which, together with revenues from corporate licensing and supply agreements, will be sufficient for us to operate profitably. We may be unable to enter into Strategic Corporate Licensing and Supply Agreements, which could cause our business to suffer. A key component of our sales and marketing strategy is to enter into licensing and supply arrangements with leading pharmaceutical and biotechnology companies whose products Bioject's technology provides either increased medical effectiveness or a higher degree of market acceptance. If we cannot enter into these agreements on terms favorable to us or at all, our business may suffer. In January 1995, Bioject and Roche entered into an agreement, whereby the parties anticipated that the product development phase of the agreement would develop into a supply and distribution agreement between Bioject and Roche. In June 1999, Roche advised us that due to a longer and more costly than expected regulatory process to gain clearance to use the B-2020 in conjunction with Roche's products, Roche had changed its marketing strategy. In making that change in marketing strategy, Roche was abandoning its exclusive distribution rights to the B-2020 and would not be seeking a supply of the B-2020 from Bioject. In July 1998, Bioject and Merck & Co. entered into an agreement, whereby the parties anticipated that the 7 initial July 1998, agreement would lead to a long-term licensing and supply agreement between the two companies. In February 1999, Merck & Co. advised us that it would not continue, at the present time, to pursue exclusive license to or supply of our products. Both of these agreements resulted in significant short-term revenue. Neither agreement developed into the long-term revenue stream anticipated by our strategic partnering strategy. We may be unable to enter into future licensing or supply agreements with major pharmaceutical or biotechnology companies. Even if we enter into these agreements, they may not result in sustainable long-term revenues which, when combined with revenues from product sales, could be sufficient for us to operate profitably. An important component of our corporate licensing and supply agreement strategy is specifically targeted at entering into agreements of this nature with pharmaceutical and biotechnology companies developing DNA-based vaccines and medications. The component of the strategy which focuses on companies developing DNA-based therapies arises in great part from preliminary data from clinical studies with animals which indicates that use of the Biojector technology may result in better performance of some DNA-based medications than can be achieved through the use of traditional needle-syringes. We cannot assure you that further clinical studies will prove conclusively that our technology is more effective in delivering DNA-based medications than alternative delivery systems that are either currently available or that may be developed in the future. Further, should our technology prove to be more effective in delivering DNA-based medications, we may be unable to gain regulatory clearance to deliver any DNA-based medications using our products. Further, even if intradermal delivery of DNA-based medications is critical to effective delivery of those compounds, we may be unable to gain regulatory clearance for intradermal delivery of DNA-based medications with our products. In addition, there can be no assurance that any company will be successful in developing one or more DNA-based therapies or successful in bringing those therapies to market. Further, should any companies be successful in developing and marketing DNA-based therapies, we may be unable to enter into long-term license or supply agreements with any such company, which could cause our financial condition and results of operations to suffer. We may never receive future royalties from the Blood Glucose Monitoring Technology, which could cause our financial condition to suffer. In May 1999, rather than continue to fund the cost of its development, we entered into negotiations to sell Marathon's blood glucose monitoring technology, and certain fixed assets related to developing the technology, to a third party. The sale was completed on June 30, 1999. The terms of the sale of the blood glucose monitoring technology provide for us to receive a royalty on net sales of future products, if any, which may be developed in the future from the licensed technology. The agreement calls for a royalty of three percent of net sales until we have received total royalty payments of $10 million. The agreement then calls for royalty payments of one percent of net sales thereafter. Future products may never be successfully developed from the blood glucose monitoring technology, and if products are developed, they may not be commercially successful, which would mean that we would receive no future royalties and this could cause our financial condition to suffer. We have a history of losses and may never be profitable. Since our formation in 1985, we have incurred significant annual operating losses and negative cash flow. At December 31, 1999, we had an accumulated deficit of $59 million. $47 million of the accumulated deficit relates to losses incurred in the needle-free segment of our operations. $12 million of the accumulated deficit relates to losses from our operations to develop the blood glucose monitoring technology. We may never be profitable, which could have a negative effect on our stock price. Historically, our revenues have been derived primarily from licensing and technology fees and from limited product sales. The product sales were principally sales to dealers in order to stock their inventories and to Homecare Management, Inc. More recently, we have sold our products to end-users, primarily to public health clinics for vaccinations and to nursing organizations for flu immunizations. We have not attained profitability at these sales levels. We may never be able to generate significant revenues or achieve profitability. Because of these uncertainties at March 31, 1999, our independent public accountants qualified their opinion with respect to our ability to continue as a going concern. We will need additional financing in the future, and if we cannot obtain the necessary financing our business could fail. To date, our revenues from operations have not been sufficient to meet our cash requirements. As a result, since our inception in 1985, we have financed our operations, working capital needs and capital expenditures primarily from private placements of securities, exercises of stock options, proceeds received from our initial public offering in 1986, proceeds received from a public offering of Common Stock in November 1993, licensing and technology revenues, equity investments from Elan, proceeds from the sale of the glucose monitoring technology and more recently through sales of products. We plan to fund our future cash requirements through revenues, debt, and sales of equity securities. However, we may be unable to obtain the financing sufficient to fund our business activities on favorable terms or at all. Failure to obtain adequate financing would have a material adverse impact on our business. In 8 addition, sale of our equity securities on unfavorable terms to meet our obligations could result in material dilution to the existing shareholders. We have outstanding convertible preferred stock, which is convertible into common stock at prices which may be lower than market price at the time of conversion which could result in dilution to existing common stock holders. Our Common Stock is subject to the rights and preferences of the Series A and C Convertible Preferred Stock, which may be converted into common stock at prices which may be lower than market price at the time of conversion causing substantial dilution to existing holders of common stock. The Series A Convertible Preferred Stock is convertible to Common Stock at a conversion price of $7.50 per share. The Series C Preferred Stock is convertible to Common Stock at a conversion price of $3.0625 per share. In October 2004, unless it is converted earlier by the holders or redeemed by us, the shares of Series A and C Convertible Preferred Stock and accrued but unpaid dividends convert automatically into Common Stock. We have limited manufacturing experience, and may be unable to produce our products at the unit costs necessary for the products to be competitive in the market, which could cause our financial condition to suffer. We have limited experience manufacturing our products in commercially viable quantities. We have increased our production capacity for the Biojector 2000 system through automation of, and changes in, production methods, in order to achieve savings through higher volumes of production. If we are unable to do so, then our results of operations and financial condition could suffer. The current cost per injection of the Biojector 2000 system is substantially higher than that of traditional needle-syringes, our principal competition. A key element of our business strategy has been to reduce the overall manufacturing cost through automating production and packaging. This automation is substantially complete. There can be no assurance that we will achieve sales and manufacturing volumes necessary to realize cost savings from volume production at levels necessary to result in significant unit manufacturing cost reductions. Failure to do so will continue to make competing with needle-syringes on the basis of cost very difficult and will adversely affect our financial condition and results of operations. While we believe that our experience manufacturing the Biojector enhances the probability of its success in manufacturing the Vitajet or other devices we may develop, we have had limited experience manufacturing the Vitajet and as of March 31, 1999, have only recently completed installing a manufacturing line to produce the Vitajet. We may be unable to successfully manufacture the Vitajet or other devices at a unit cost that will allow the product to be sold profitably. Failure to do so would adversely affect our financial condition and results of operations. We are subject to extensive government regulation and must continue to comply with these regulations or our business could suffer. Our products and manufacturing operations are subject to extensive government regulation in both the U.S. and abroad. If we cannot comply with these regulations, we may be unable to distribute our products, which could cause our business to suffer or fail. In the U.S., the development, manufacture, marketing and promotion of medical devices are regulated by the Food and Drug Administration ("FDA") under the Federal Food, Drug, and Cosmetic Act ("FD&C"). In 1987, we received clearance from the FDA under Section 510(k) of the FD&C to market a hand-held CO2-powered needle-free injection system. The FD&C provides that new premarket notifications under Section 510(k) of the FD&C are required to be filed when, among other things, there is a major change or modification in the intended use of a device or a change or modification to a legally marketed device that could significantly affect its safety or effectiveness. A device manufacturer is expected to make the initial determination as to whether the change to its device or its intended use is of a kind that would necessitate the filing of a new 510(k) notification. Although the Biojector 2000 system incorporates changes from the system with respect to which our 1987 510(k) marketing clearance was received and expands its intended use, we made the determination that these were not major changes or modifications in intended use or changes in the device that could significantly affect the safety or effectiveness of the device. Accordingly, we further concluded that the 1987 510(k) clearance permitted us to market the Biojector 2000 system in the U.S. In June 1994, we received clearance from the FDA under 510(k) to market a version of our Biojector 2000 system in a configuration targeted at high volume injection applications. In October 1996, we received 510(k) clearance for a needle-free disposable vial access device. In March 1997, we received additional 510(k) clearance for certain enhancements to our Biojector 2000 system. We currently have an application pending before the FDA for 510(k) clearance for modification to the Vitajet 3 device. The FDA may not concur with our determination that our current and future products can be qualified by means of a 510(k) submission. Future changes to manufacturing procedures could require that we file a new 510(k) notification. Also, future products, product enhancements or changes, or changes in product use may require clearance under Section 510(k), or they may require FDA premarket approval ("PMA") or other regulatory clearances. PMAs and regulatory clearances other than 9 510(k) clearance generally involve more extensive prefiling testing than a 510(k) clearance and a longer FDA review process. Under current FDA policy, applications involving pre-filled syringes would be evaluated by the FDA as drugs rather than devices, requiring FDA new drug applications ("NDAS") or ANDAs. Depending on the circumstances, drug regulation can be much more extensive and time consuming than device regulation. FDA regulatory processes are time consuming and expensive. Product applications submitted by us may not be cleared or approved by the FDA. In addition, our products must be manufactured in compliance with Good Manufacturing Practices ("GMP") as specified in regulations under the FDA Act. The FDA has broad discretion in enforcing the FDA Act, and noncompliance with the Act could result in a variety of regulatory actions ranging from product detentions, device alerts or field corrections, to mandatory recalls, seizures, injunctive actions, and civil or criminal penalties. If we cannot meet international product standards, we will be unable to distribute our products outside of the United States which could cause our business to suffer. Distribution of our products in countries other than the U.S. may be subject to regulation in those countries. Failure to satisfy these regulations would impact our ability to sell our products in these countries and could cause our business to suffer. In June 1998, we received certification from TUV Product Services for our quality system, which meets the requirements of ISO 9001 and EN 46001. In June 1999, TUV Product Services audited our quality system and found that it still meets the requirements of ISO 9001. In November 1999, we received certification from TUV Product Services for the applicable requirements of EC-Directive 93/42/EEC Annex. II.3 Medical Device Directive. This certification allows us to label our products with the CE Mark and sell them in the European Community. We may be unable to continue to meet the standards of ISO 9001 or CE Mark certification. If the healthcare industry limits coverage or reimbursement levels, the acceptance of our products could suffer. The price of our products exceeds the price of needle-syringes and if coverage or reimbursement levels are reduced, market acceptance of our products could be harmed. The healthcare industry is subject to changing political, economic and regulatory influences that may affect the procurement practices and operations of healthcare facilities. During the past several years, the healthcare industry has been subject to increased government regulation of reimbursement rates and capital expenditures. Among other things, third party payers are increasingly attempting to contain or reduce healthcare costs by limiting both coverage and levels of reimbursement for healthcare products and procedures. Because the price of the Biojector 2000 system exceeds the price of needle-syringe, cost control policies of third party payers, including government agencies, may adversely affect acceptance and use of the Biojector 2000 system. We are highly dependent on third-party relationships, and our business could suffer if we cannot maintain these relationships. We are dependent on third parties for distribution of the Biojector 2000 system to certain market segments, for the manufacture of component parts, and for assistance with the development and distribution of future application-specific systems. If we cannot maintain these relationships, or if the third parties are unable to provide the services we require, our business could suffer. Our current manufacturing processes for the Biojector 2000 jet injector and disposable syringes as well as manufacturing processes to produce the Vitajet consist primarily of assembling component parts supplied by outside suppliers. Some of these components are currently obtained from single sources, with some components requiring significant production lead times. In the past, we have experienced delays in the delivery of certain components. To date such delays have not had a material adverse effect on our operations. We may experience delays in the future, and these delays could have a material adverse effect on our financial condition and results of operations. In the past, we have entered into agreements with certain major pharmaceutical or biotechnology companies for development and distribution of needle-free injection systems and for use of our needle-free injection systems in conjunction with the pharmaceutical companies' products. In all cases to date these companies have had the right to terminate those agreements at certain phases as defined in the agreements. In several instances, those agreements have been terminated before yielding sustained long-term licensing or product sales revenues. Entering into agreements of this nature is an important part of our overall business strategy. We may be unable to interest any major pharmaceutical or biotechnology companies in entering into such agreements. If interested parties are found, we may be unsuccessful at negotiating and entering into long-term licensing and supply agreements with the interested parties. Further, if such agreements are entered into, there can be no assurance that the companies' interest and participation in the agreements and projects will continue and result in long-term, sustainable revenues as contemplated by this aspect of our overall business strategy. Failure to enter into future licensing and product supply agreements with major pharmaceutical or 10 biotechnology companies and failure of those future agreements to result in significant, sustainable long-term revenues could adversely affect our financial condition. If we are unable to manage our growth, our results of operations could suffer. If our products achieve market acceptance or if we are successful in entering into product supply agreements with major pharmaceutical or biotechnology companies, we expect to experience rapid growth. Such growth would require expanded customer service and support, increased personnel, expanded operational and financial systems, and implementing new and expanded control procedures. We may be unable to attract sufficient qualified personnel or successfully manage expanded operations. As we expand, we may periodically experience constraints that would adversely affect our ability to satisfy customer demand in a timely fashion. Failure to manage growth effectively could adversely affect our financial condition and results of operations. We may be unable to compete in the medical equipment field, which could cause our business to fail. The medical equipment market is highly competitive and competition is likely to intensify. If we cannot compete, our business will fail. Our products compete primarily with traditional needle-syringes, "safety syringes" and also with other alternative drug delivery systems. While we believe our products provide a superior drug delivery method, there can be no assurance that we will be able to compete successfully with existing or newly developed drug delivery products. Many of our competitors have longer operating histories as well as substantially greater financial, technical, marketing and customer support resources. One or more of these competitors may develop an alternative drug delivery system that competes more directly with our products, and our products may be unable to compete successfully with such a product. We are dependent on a single technology, and if it cannot compete or find market acceptance, our business will suffer. Our strategy has been to focus our development and marketing efforts on our needle-free injection technology. Focus on this single technology leaves us vulnerable to competing products and alternative drug delivery systems. If our technology cannot find market acceptance or cannot compete against other technologies, business will suffer. We perceive that healthcare providers' desire to minimize the use of the traditional needle-syringe has stimulated development of a variety of alternative drug delivery systems such as "safety syringes," jet injection systems, nasal delivery systems and transdermal diffusion "patches". In addition, pharmaceutical companies frequently attempt to develop drugs for oral delivery instead of injection. While we believe that for the foreseeable future there will continue be a significant need for injections, alternative drug delivery methods may be developed which are preferable to injection. We rely on patents and proprietary rights to protect our proprietary technology. We rely on a combination of trade secrets, confidentiality agreements and procedures, and patents to protect our proprietary technologies. We have been granted a number of patents in the United States and several patents in other countries covering certain technology embodied in our current jet injection system and certain manufacturing processes. Additional patent applications are pending in the U.S. and certain foreign countries. The claims contained in any patent application may not be allowed, or any patent or our patents collectively will not provide adequate protection for our products and technology. In the absence of patent protection, we may be vulnerable to competitors who attempt to copy our products or gain access to our trade secrets and know-how. In addition, the laws of foreign countries may not protect our proprietary rights to this technology to the same extent as the laws of the U.S. We believe we have independently developed our technology and attempt to ensure that our products do not infringe the proprietary rights of others. We know of no such infringement claims. However, any claims could have a material adverse affect on our financial condition and results of operations. If our products fail or cause harm, we could be subject to substantial product liability, which could cause our business to suffer. Producers of medical devices may face substantial liability for damages in the event of product failure or if it is alleged the product caused harm. We currently maintain product liability insurance and, to date, have experienced only one product liability claim. There can be no assurance, however, that we will not be subject to a number of such claims, that our product liability insurance would cover such claims, or that adequate insurance will continue to be available to us on acceptable terms in the future. Our business could be adversely affected by product liability claims or by the cost of insuring against such claims. We are highly dependent on our key employees, and our business could suffer if they were to leave. Our success depends on the retention of our executive officers and other key employees. Competition exists for qualified personnel 11 and our success will depend, in part, on attracting and retaining qualified personnel. Failure in these efforts could have a material adverse effect on our business, financial condition or results of operations. There are a large number of shares eligible for sale into the public market in the near future, which may reduce the price of our common stock. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, or the perception that such sales could occur. We have a large number of shares of common stock outstanding and available for resale beginning at various points in time in the future. These sales also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. The shares of our common stock currently outstanding will become eligible for sale without registration pursuant to Rule 144 under the Securities Act, subject to certain conditions of Rule 144. Certain holders of our common stock also have certain demand and piggyback registration rights enabling them to register their shares under the Securities Act for sale. We have registered approximately 2.4 million shares for resale on Form S-3 registration statements as well as approximately 1.53 million shares issuable upon exercise of warrants. In addition, we have approximately 3.7 million shares of common stock reserved for issuance under our stock option plan. As of December 31, 1999, options to purchase approximately 580,000 shares of common stock were outstanding and will be eligible for sale in the public market from time to time subject to vesting. These stock options generally have exercise prices significantly below the current price of our common stock. The possible sale of a significant number of these shares may cause the price of our common stock to fall. We may be unable to maintain our listing on Nasdaq, which could cause our stock price to fall and decrease the liquidity of our common stock. Our Common Stock is quoted on the NASDAQ SmallCap Market. If we cannot comply with the continuing requirements, we may be delisted which could cause the stock price to fall and decrease the liquidity of our common stock for existing shareholders. There are a number of continuing requirements that must be met in order for the Common Stock to remain eligible for quotation on the NASDAQ National Market or the NASDAQ SmallCap Market. The failure to meet the maintenance criteria in the future could result in the delisting of our Common Stock from NASDAQ. In such event, trading, if any, in the Common Stock may then continue to be conducted in the non- NASDAQ over-the-counter market. As a result, an investor may find it more difficult to dispose of or to obtain accurate quotations as to the market value of our Common Stock. In addition, if the Common Stock were delisted from trading on NASDAQ and the trading price of the Common Stock were less than $5.00 per share, trading in the Common Stock would also be subject to the requirements of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock. The additional burdens imposed on broker-dealers may discourage broker-dealers from effecting transactions in penny stocks, which could reduce the liquidity of the shares of Common Stock and thereby have a material adverse effect on the trading market for the securities. On April 9,1999, we were advised by NASDAQ that we were out of compliance with the NASDAQ rule that requires companies listed on the exchange to maintain a minimum bid price of $1.00 for their stock. On July 9, 1999, the last sale price of our common stock as reported on the NASDAQ National Market System was $0.50 per share. On October 13, 1999, a one-for-five reverse stock split was effected. At July 15,1999, 29,011,236 shares of Common Stock were outstanding, as well as options, warrants and convertible preferred stock to acquire an additional 24,378,928 shares of Common Stock. The Reverse Stock Split, decreased the number of outstanding shares of Common Stock to approximately 5.8 million shares and approximately 4.8 million shares were reserved for issuance upon exercise of outstanding options, warrants and the conversion of convertible preferred stock. As of December 31, 1999, approximately 89.1 million shares are available for future issuances. Our stock price may be highly volatile, which increases the risk of securities litigation. The market for our Common Stock and for the securities of other early-stage, small market-capitalization companies has been highly volatile in recent years. This increases the risk of securities litigation relating to such volatility. We believe that factors such as quarter-to-quarter fluctuations in financial results, reduction in the number of outstanding shares due to the recent reverse stock split, new product introductions by us or our competition, public announcements, changing regulatory environments, sales of Common Stock by certain existing shareholders, substantial product orders and announcement of licensing or product supply agreements with major pharmaceutical or biotechnology companies could contribute to the volatility of the price of our Common Stock, causing it to fluctuate dramatically. General economic trends such as recessionary cycles and changing interest rates may also adversely affect the market price of our Common Stock. 12 USE OF PROCEEDS The Shares offered hereby are being registered for the account of the Selling Shareholders and, accordingly, we will not receive any of the proceeds from the sale of the Shares. SELLING SHAREHOLDERS The Shares being offered for resale by the Selling Shareholders were acquired in a private placement of our common stock to Amgen Inc. The term "Selling Shareholder" includes all persons acquiring securities and persons acquiring such securities in permitted transfers from the original holders thereof in transactions not requiring registration under the Securities Act. The following table sets forth certain information regarding the beneficial ownership of shares of Common Stock by the Selling Shareholders as of March 1, 2000, and as adjusted to reflect the sale of the Shares. Maximum Number of Number of Shares Shares to be Sold Shares Owned After Owned Prior to under this After Offering (1) Name Offering Prospectus Number Percent - ---- -------- ---------- ------ ------- Amgen Inc. 65,796 65,796 0 * - ----------------- * Less than 1%.
(1) Assumes that the Selling Shareholders will sell all Shares during the effective period. We entered into a development and clinical supply agreement with Amgen Inc. for the delivery of Amgen products with our Iject needle-free injection system. In connection with the agreement, Amgen made a $1.5 million investment in our common stock. 13 PLAN OF DISTRIBUTION We are registering the Shares on behalf of the Selling Shareholders. As used in this Prospectus, the term "Selling Shareholders" includes donees and pledgees selling Shares received from a named Selling Stockholder after the date of this Prospectus. The Selling Shareholders will offer and sell the Shares to which this Prospectus relates for their own accounts. We will not receive any proceeds from the sale of the Shares. We will bear all costs, expenses and fees in connection with the registration of the Shares. Brokerage commissions and similar selling expenses, if any, attributable to the sale of the Shares will be borne by the Selling Shareholders. The Selling Shareholders may offer and sell the Shares from time to time in one or more types of transactions (which may include block transactions) on the Nasdaq SmallCap Market, in transactions directly with market makers or in privately negotiated transactions, through put or call options transactions, through short sales, or a combination of such methods of sale, at prices relating to prevailing market prices or at negotiated prices. Sales may be made to or through brokers or dealers who may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders or the purchasers of the Shares. As of the date of this Prospectus, we are not aware of any agreement, arrangement or understanding between any broker or dealer and the Selling Shareholders regarding the sale of their Shares, nor are we aware of any underwriter or coordinating broker acting in connection with the proposed sale of Shares by the Selling Shareholders. There is no assurance that the Selling Shareholders will sell any or all of the Shares that they offer. The Selling Shareholders and any brokers or dealers who participate in the sale of the Shares may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and any commissions received by them and any profits realized by them on the resale of Shares may be deemed to be underwriting discounts or commissions under the Securities Act. Because the Selling Shareholders may be deemed to be "underwriters" within the meaning of the Securities Act, the Selling Shareholders will be subject to the prospectus delivery requirements of the Securities Act. We have informed the Selling Shareholders that the anti-manipulative provisions of Regulation M promulgated under the Exchange Act may apply to their sales in the market. The Selling Shareholders may also resell all or a portion of the Shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided it meets the criteria and conforms to the requirements of such Rule. Upon notification to us by a Selling Stockholder that any material arrangement has been entered into with a broker or dealer for the sale of Shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this Prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Selling Stockholder and of the participating brokers or dealers, (ii) the number of Shares involved, (iii) the price at which such Shares were sold, (iv) the commissions paid or discounts or concessions allowed to such brokers or dealers, where applicable, (v) that such brokers or dealers did not conduct any investigation to verify the information set out or incorporated by reference in this Prospectus and (vi) other facts material to the transaction. In addition, upon notification to us by a Selling Stockholder that a donee or pledgee intends to sell more than 500 Shares, a supplement to this Prospectus will be filed. LEGAL MATTERS The validity of the issuance of the shares of Common Stock offered hereby will be passed upon for us by Dorsey & Whitney LLP, Seattle, Washington. EXPERTS The consolidated financial statements incorporated by reference in this Prospectus and elsewhere in the Registration Statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. 14 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table itemizes the expenses incurred by the Company in connection with the shares of Common Stock being registered. All of the amounts shown are estimates except the Securities and Exchange registration fee. Item Amount - ---- ------ Securities and Exchange Commission Registration Fee $ 215.00 Blue Sky Fees and Expenses 0.00 Accounting Fees and Expenses 3,000.00 Legal Fees and Expenses 3,000.00 Miscellaneous 0.00 Total $6,215.00 The Selling Shareholders will pay no portion of the foregoing expenses. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Generally, Sections 60.387 through 60.414 of the Oregon Business Corporation Act (the "Oregon Act") authorize a court to award, or a corporation's board of directors to grant, indemnification to directors and officers in circumstances where the officer or director acted in good faith, in a manner that the director or officer reasonably believed to be in (or at least not opposed to) the best interests of the corporation and, if in a criminal proceeding, if the director or officer had no reasonable cause to believe his conduct was unlawful. Article IX of the Company's Bylaws provides for indemnification to the greatest extent permitted by the Oregon Act. Section 60.047 of the Oregon Act authorizes a corporation to limit a director's liability to the corporation or its shareholders for monetary damages resulting from conduct as a director, except in certain circumstances involving breach of the director's duty of loyalty to the corporation or its shareholders, intentional misconduct or knowing violation of the law, self dealing or approval of illegal corporate loans or distributions, or any transaction from which the director personally receives a benefit in money, property or services to which the director is not legally entitled. Article VII of the Company's Articles of Incorporation contains provisions implementing, to the fullest extent allowed, limitations on a director's liability to the Company or its shareholders. The Company currently maintains officers' and directors' liability insurance. 15 ITEM 16. EXHIBITS Exhibit Number Description ------ ----------- 4.1+ Stock Purchase Agreement dated as of February 29, 2000 5.1 Opinion of Dorsey & Whitney LLP 23.1 Consent of Consent of Dorsey & Whitney LLP (included in Exhibit 5.1) 23.2 Consent of Arthur Andersen LLP 24.1 Power of Attorney (see signature page) - -------------------- + Confidential treatment has been requested for certain portions of this exhibit pursuant to Rule 406 under the Securities Act of 1933, as amended. Confidential portions have been separately provided to the Commission. ITEM 17. UNDERTAKINGS. (a) Rule 415 Offering. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post- effective amendment thereof), which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii)To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if this Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post- effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities as that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 16 (b) Filings Incorporating Subsequent Exchange Act Documents by Reference. The undersigned Registrant hereby undertakes that, for the purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Indemnification for Liabilities. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expense incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. 17 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Portland, State of Oregon, on March 17, 2000. BIOJECT MEDICAL TECHNOLOGIES INC. BY: /s/ James O'Shea ------------------------------------ James C. O'Shea Chairman, President and Chief Executive Officer POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints James C. O'Shea and Chris Farrell, or either of them, his attorney-in-fact, with the power of substitution, for them in any and all capacities, to sign any amendments to this registration statement, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date - --------- ----- ---- /s/ James O'Shea Chairman of the Board, March 17, 2000 - --------------------------- Chief Executive Officer James C. O'Shea and President (Principal Executive Officer and Principal Accounting and Financial Officer) Director - --------------------------- William A. Gouveia /s/ John Ruedy Director March 14, 2000 - --------------------------- John Ruedy, M.D. Director - --------------------------- Grace Keeney Fey /s/ Eric T. Herfindal Director March 20, 2000 - --------------------------- Eric T. Herfindal /s/ David de Weese Director March 14, 2000 - --------------------------- David de Weese /s/ Richard J. Plestina Director March 15, 2000 - --------------------------- Richard J. Plestina /s/ Edward Flynn Director March 15, 2000 - --------------------------- Edward Flynn EXHIBIT INDEX ------------- Exhibit Number Description ------ ----------- 4.1+ Stock Purchase Agreement dated as of February 29, 2000 5.1 Opinion of Dorsey & Whitney LLP 23.1 Consent of Consent of Dorsey & Whitney LLP (included in Exhibit 5.1) 23.2 Consent of Arthur Andersen LLP 24.1 Power of Attorney (see signature page) - ---------------------- + Confidential treatment has been requested for certain portions of this exhibit pursuant to Rule 406 under the Securities Act of 1933, as amended. Confidential portions have been separately provided to the Commission. EX-4.1 2 STOCK PURCHASE AGREEMENT EXHIBIT 4.1 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of February 29, 2000 between Bioject Medical Technologies, Inc., an Oregon corporation (the "Company"), and Amgen Inc., a Delaware corporation (the "Investor"). 1. Authorization of Shares. The Company has duly authorized the sale and issuance of Sixty-Five Thousand Seven Hundred Ninety-Six (65,796) shares (the "Shares") of common stock of the Company, without par value (the "Common Stock"), to Investor. The Shares equal the quotient of (a) the Purchase Price (as defined below) divided by (b) the product of (i) the average closing price of the Common Stock on The Nasdaq Stock Market, Inc. Small Cap Market (the "Nasdaq Small Cap Market") for the *** (***) trading days ending February 22, 2000, multiplied by (ii) *** Percent (***%). 2. Agreement to Sell and Purchase Shares. Upon the terms and subject to the conditions contained herein, the Company and the Investor agree that the Investor will purchase from the Company and the Company will issue and sell to the Investor the Shares, for an aggregate purchase price (the "Purchase Price") of One Million Five Hundred Thousand Dollars ($1,500,000). Unless otherwise requested by the Investor, certificates representing the Shares purchased by the Investor will be registered in the Investor's name and address as set forth on the signature page hereto. 3. Delivery of the Shares at Closing. The completion of the purchase and sale of the Shares (the "Closing") shall occur on February 29, 2000 (the "Closing Date"), at the Investor's principal place of business, or at such different time or day or location as the Company and the Investor mutually agree. At the Closing, the Company shall deliver to the Investor one or more stock certificates representing the Shares, each such certificate to be registered in the name of the Investor. 3.1 The Company's obligation to issue the Shares to the Investor shall be subject to the following conditions, any one or more of which may be waived by the Company in writing: (a) receipt by the Company of a certified or official bank check or wire transfer of funds in the full amount of the Purchase Price; and (b) the representations and warranties of the Investor set forth herein shall be true and correct in all respects. 3.2 The Investor's obligation to purchase the Shares shall be subject to the following conditions, any one or more of which may be waived by the Investor in writing: (a) the representations and warranties of the Company set forth herein shall be true and correct in all respects; ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. (b)the Company shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by it on or before the Closing Date; (c) the Company shall have delivered to Investor a certificate dated the Closing Date, executed by the Chief Executive Officer and Chief Financial Officer of the Company, certifying the satisfaction of the conditions specified in subsections (a) and (b) of this Section 3.2; (d) the Investor shall have received from Dorsey & Whitney LLP, counsel for the Company, a favorable opinion dated the Closing Date in the form of Exhibit A hereto; (e) all registrations, qualifications, permits and approvals required u nder applicable state securities laws shall have been obtained for the lawful execution, delivery and performance of this Agreement, including without limitation the offer, sale, issue and delivery of the Shares; (f) Investor shall have received the following: (1) Copies of resolutions of the Company's Board of Directors, certified by the Secretary of the Company, authorizing and approving the execution, delivery and performance of this Agreement, and all other documents and instruments to be delivered pursuant hereto and thereto; (2) A certificate of incumbency executed by the Secretary of the Company certifying the names, titles and signatures of the officers authorized to execute the documents referred to in subsection (1) above and further certifying that the Amended and Restated Articles of Incorporation and Amended and Restated Bylaws of the Company delivered to the Investor at the time of the execution of this Agreement have been validly adopted, are in full force and effect, and have not been further amended or modified; and (3) Such additional supporting documentation and other information with respect to the transactions contemplated hereby as Investor may reasonably request; (g) all corporate and other proceedings and actions taken in connection with the transactions contemplated hereby and all certificates, opinions, agreements, instruments and documents mentioned herein or incident to any such transactions, shall be satisfactory in form and substance to Investor; (h) the Company's Subsidiary, Bioject Inc., an Oregon corporation, and Investor shall have entered into the License and Development Agreement dated as of the date hereof (the "License and Development Agreement"); 2 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. (i) Any approval, consent or waiting period required by any governmental agency or authority, or any other individual, partnership, joint venture, corporation, limited liability company, trust, estate, unincorporated organization, or any other entity (each, a "Person"), necessary or material to the consummation of the transactions contemplated hereby shall have been obtained; and (j) No order of any court of administrative agency shall be in effect which restrains or prohibits any transaction contemplated hereby or by the License and Development Agreement which would limit or affect the Investor's rights hereunder or thereunder. 4. Representations, Warranties and Covenants of the Company. The Company hereby represents and warrants to, and covenants with, the Investor, as follows: 4.1 Organization. The Company is duly organized and validly existing in good standing under the laws of the State of Oregon. Each of the Company and its Subsidiaries (as defined in Rule 405 under the Securities Act of 1933, as amended (the "Securities Act")) has full power and authority to own, operate and occupy its properties and to conduct its business as presently conducted and as proposed to be conducted and is registered or qualified to do business and in good standing in each jurisdiction in which it owns or leases property or transacts business and where the failure to be so qualified would have a material adverse effect upon the business, properties, condition (financial or otherwise), operations or prospects of the Company and its Subsidiaries, considered as one enterprise (collectively, a "Material Adverse Effect"), and no proceeding has been instituted in any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification. All Subsidiaries of the Company are disclosed in Schedule 4.1. 4.2 Due Authorization. The Company has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, and this Agreement has been duly authorized and validly executed and delivered by the Company and constitutes the legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms. All corporate acts and proceedings required for the authorization, execution and delivery of this Agreement, the offer, issuance and delivery of the Shares and the performance of this Agreement have been lawfully and validly taken or will have been so taken prior to the Closing. 4.3 Non-Contravention. The execution and delivery of this Agreement, the issuance and sale of the Shares, the fulfillment of the terms of this Agreement and the consummation of the transactions contemplated hereby will not (A) conflict with or constitute a violation of, or default (with the passage of time or otherwise) under, (i) any material bond, debenture, note or other evidence of indebtedness, or under any material lease, contract, indenture, mortgage, deed of trust, security agreement, loan or credit agreement, joint venture or other agreement, instrument, commitment or arrangement to which the Company or any Subsidiary is a party or by which the Company or any of its Subsidiaries or their respective properties are bound, (ii) the Amended and Restated Articles of Incorporation, Amended and Restated Bylaws or other organizational documents of the Company or any Subsidiary, or (iii) any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the 3 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. Company or any Subsidiary or their respective properties, or (B) result in the creation or imposition of any lien, encumbrance, claim, security interest, charge, option, pledge or restriction whatsoever (a "Lien") upon any of the material properties, assets or rights of the Company or any Subsidiary or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness or any material, lease, contract, indenture, mortgage, deed of trust, security agreement, loan or credit agreement or any other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them is bound or to which any of the property or assets of the Company or any Subsidiary is subject, the result of which would have a Material Adverse Effect. No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body, administrative agency, or other governmental body in the United States is required for the execution and delivery of this Agreement and the valid issuance and sale of the Shares to be sold pursuant to the Agreement, other than such as have been made or obtained, and except for any securities filings required to be made under federal or state securities laws. The execution, delivery and performance by the Company of this Agreement will not require from the Board of Directors or the stockholders of the Company any consent or approval that has not been validly and lawfully obtained. The Company is not subject to any restriction of any kind or character which prohibits the Company from entering into this Agreement or would prevent its performance of or compliance with all or any part of this Agreement or the consummation of the transactions contemplated hereby or thereby. 4.4 Capitalization. The capitalization of the Company consists of 100,000,000 shares of Common Stock, and 10,000,000 shares of preferred stock of the Company, without par value (the "Preferred Stock"), of which 1,235,000 shares have been designated as Series A Preferred Stock, 200,000 shares have been designated as Series B Preferred Stock, and 500,000 shares have been designated as Series C Preferred Stock, and the Company has no authority to issue any other capital stock. As of December 31, 1999, 5,828,784 shares of Common Stock are issued and outstanding, 692,694 shares of Series A Preferred Stock are issued and outstanding, zero shares of Series B Preferred Stock are issued and outstanding, and 391,830 shares of Series C Preferred Stock are issued and outstanding. The Shares have been duly authorized, and when issued and paid for in accordance with the terms of the Agreement will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens and any other restrictions, and were not issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. The outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable. Except as disclosed in Schedule 4.4, no preemptive right, co-sale right, right of first refusal, registration right, or other similar right exists with respect to the Shares or the issuance and sale thereof. No further approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Shares. Except as disclosed in Schedule 4.4, there are no stockholders agreements, voting agreements or other similar agreements with respect to the capital stock of the Company to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders. 4.5 Legal Proceedings. There is no material legal or governmental proceeding pending or, to the knowledge of the Company, threatened to which the Company or any Subsidiary or any officer, director or key employee thereof is or may be a party or to which the business or property of the Company or any Subsidiary is subject. After reasonable investigation, the Company 4 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. is not aware of any fact which might result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other proceeding, which if adversely determined would have a Material Adverse Effect. The Company is not in default with respect to any order, writ, judgment, injunction, decree, determination or award of any court or of any governmental agency or instrumentality (whether federal, state, local or foreign). 4.6 No Violations. Neither the Company nor any Subsidiary is in violation of its charter, bylaws, or other organizational document, or in violation of any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary, which violation, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect, or is in default (and there exists no condition which, with the passage of time or otherwise, would constitute a default) in any material respect in the performance of any bond, debenture, note or any other evidence of indebtedness in any indenture, mortgage, deed of trust or any other material agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or by which the properties of the Company or any Subsidiary are bound, which would be reasonably likely to have a Material Adverse Effect. To the best of its knowledge, the Company, its Subsidiaries, and their respective businesses, properties and assets are in compliance in all material respects with all applicable laws and regulations, including without limitation those relating to (a) health, safety and employee relations, (b) environmental matters, including the discharge of any hazardous or potentially hazardous materials into the environment, and (c) the development, commercialization and sale of medical devices, pharmaceutical and biotechnology products, including all applicable regulations of the United States Food and Drug Administration and comparable foreign regulatory authorities. 4.7 Governmental Permits, Etc. With the exception of the matters that are dealt with separately under Sections 4.1, 4.14, 4.15 and 4.16, each of the Company and its Subsidiaries has all necessary franchises, licenses, certificates and other authorizations from any foreign, federal, state or local government or governmental agency, department, or body that are currently necessary for the operation of the business of the Company and its Subsidiaries as currently conducted, except where the failure to currently possess could not reasonably be expected to have a Material Adverse Effect. 4.8 Intellectual Property. (i) Each of the Company and its Subsidiaries owns or possesses sufficient rights to use all patents, patent rights (including patent applications), trademarks, copyrights, licenses, inventions, trade secrets, trade names and know-how (collectively, "Intellectual Property") that are necessary for the conduct of its business as now conducted or as proposed to be conducted, in each case free and clear of any right, Lien or claim of others, except where the failure to currently own or possess would not have a Material Adverse Effect, and none of the Company's or any Subsidiary's rights in or use of such Intellectual Property has been or is currently threatened to be challenged; (ii) neither the Company nor any of its Subsidiaries has received any notice of, or has any knowledge of, any infringement of asserted rights of a third party with respect to any Intellectual Property that, individually or in the aggregate, would have a Material Adverse Effect; and (iii) neither the Company nor any of its Subsidiaries has received any notice of any infringement of rights of a third party with respect to any Intellectual Property that, individually or in the 5 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. aggregate, would have a Material Adverse Effect. Without limiting the foregoing, the Company's Subsidiary, Bioject Inc., owns or possesses sufficient rights to use all Intellectual Property necessary to make, have made, use, sell, offer for sale and import a pre-filled needle-free injector system. 4.9 Financial Statements. Included in the Company's Report on Form 10-Q for the quarterly period ended December 31, 1999 (the "10-Q") are the Company's unaudited balance sheet (the "Balance Sheet") as of December 31, 1999 (the "Balance Sheet Date"), and the unaudited statement of operations for the nine-month period then ended. Included in the Company's Annual Report on Form 10-K (the "10-K") for the annual period ended March 31, 1999 are the Company's audited balance sheet as of March 31, 1999 and audited statement of operations for the twelve-month period then ended, together with the related opinion thereon of Arthur Andersen LLP, independent certified public accountants. The foregoing financial statements of the Company and the related notes present fairly, in accordance with generally accepted accounting principles consistently applied, the financial position of the Company and its Subsidiaries as of the dates indicated, and the results of its operations and cash flows for the periods therein specified, subject in the case of the 10-Q to normal year-end audit adjustments (which shall not be material in the aggregate) and the absence of footnote disclosures. Such financial statements (including the related notes) are in accordance with the books and records of the Company and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods therein specified. 4.10 Taxes. For purposes of this Agreement, the term "Taxes" shall include all federal, territorial, state, foreign, municipal and local income, profits, gross receipts, franchise, sales, use, value added, occupation, property, excise, customs, withholding, unemployment, worker's compensation, social security and other taxes, duties, fees and assessments (including interest and penalties). As of the date of this Agreement, the Company and each of its Subsidiaries has timely filed or caused to be timely filed all declarations, reports and returns (collectively, "Returns") for Taxes required by law to be filed and all such returns for Taxes are complete and accurate. The Company has paid, caused to be paid, or reserved against all Taxes which are shown as due and payable on the Returns. There are no claims pending or, to the best knowledge of the Company, threatened against the Company or any Subsidiary, for past due Taxes. 4.11 Benefit Plans. Except as disclosed in Schedule 4.11, which sets forth a true and accurate list and description of any such plans maintained or sponsored by the Company or to which the Company is required to make contributions, the Company does not maintain, sponsor, is not required to make contributions to or otherwise have any liability with respect to any pension, profit sharing, thrift or other retirement plan, employee stock ownership plan, deferred compensation, stock ownership, stock purchase, performance share, bonus or other incentive plan, health or group insurance plan, welfare plan, or other similar plan, agreement, policy or understanding (whether written or oral), whether or not such plan is intended to be qualified under Section 401(a) of the Code, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, which plan covers any employee or former employee of the Company (collectively, "Employee Benefit Plans"). To the best knowledge of the Company, all such Employee Benefit Plans are in compliance with applicable law. 6 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. 4.12 Insurance. The Company has and maintains adequate and sufficient insurance, including liability, casualty and products liability insurance, covering risks associated with its business, properties and assets, including insurance that is customary for companies similarly situated. 4.13 No Material Adverse Change. Except as disclosed in Schedule 4.13, since the Balance Sheet Date, there has not been: (a) a material adverse change in the business, properties, condition (financial or otherwise), operations or prospects of the Company or any Subsidiary; (b) any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the business, properties, condition (financial or otherwise), operations or prospects of the Company or any Subsidiary; (c) any declaration, setting aside or payment of any dividend or any distribution or payment (whether in cash, stock or property) in respect of the capital stock of the Company or any Subsidiary, or any redemption or other acquisition of such stock by the Company or any Subsidiary; (d) any waiver by the Company or any Subsidiary of a valuable right or of a material debt owed to it; (e) any debt, obligation or liability incurred, assumed or guaranteed by the Company or any Subsidiary, except in the ordinary course of business; (f) any change in any material agreement to which the Company or any Subsidiary is a party or by which it is bound which has or, so far as the Company may now foresee, in the future may have a Material Adverse Effect; or (g) any change in the assets, liabilities, condition (financial or otherwise), results or operations or prospects of the Company or any Subsidiary from those reflected on the 10-Q, except changes in the ordinary course of business that have not, individually or in the aggregate, had a Material Adverse Effect. 4.14 SEC and NASDAQ Compliance. The Company's Common Stock is registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is listed on The Nasdaq Small Cap Market, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or de-listing the Common Stock from the Nasdaq Small Cap Market, nor, except as disclosed on Schedule 4.14, has the Company received any notification that the Securities and Exchange Commission (the "SEC") or the National Association of Securities Dealers, Inc. ("NASD") is contemplating terminating such registration or listing. 4.15 Reporting Status. The Company has filed in a timely manner all documents that the Company was required to file under the Exchange Act during the twelve (12) months preceding the date of this Agreement. The following documents complied in all material respects with the SEC's requirements as of their respective filing dates, and the information contained therein as of the date thereof did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under where they were made not misleading: (a) the 10-K; and (b) the 10-Q; and 7 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. (c) all other documents, if any, filed by the Company with the SEC since March 31, 1999 pursuant to the reporting requirements of the Exchange Act. 4.16 Listing. The Company shall comply with all requirements of the NASD with respect to the issuance of the Shares and the listing thereof on the Nasdaq Small Cap Market. 4.17 No Manipulation of Stock. The Company has not taken and will not, in violation of applicable law, take, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares. 4.18 Registration Rights. Other than under this Agreement and as disclosed on Schedule 4.4, the Company has not agreed to register under the Securities Act any of its authorized or outstanding securities. 4.19 No Brokers or Finders. No Person has, or as a result of the transactions contemplated herein will have, any right or valid claim against the Company or the Investor for any commission, fee or other compensation as a finder or broker, or in any similar capacity based upon obligations incurred by the Company. 4.20 Disclosure. The information contained in this Agreement, in the 10-Q and the 10-K, and in any writing furnished pursuant hereto or in connection herewith, taken as a whole, is true, complete and correct, and does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or herein or necessary to make the statements therein or herein, in light of the circumstances under which they were made, not misleading. 5. Representations, Warranties and Covenants of the Investor. 5.1 Accredited Investor. The Investor represents and warrants to, and covenants with, the Company that: (i) the Investor is an "accredited investor" as defined in Regulation D under the Securities Act and the Investor is also knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to investments in shares presenting an investment decision like that involved in the purchase of the Shares; (ii) the Investor is acquiring the Shares in the ordinary course of its business and for its own account for investment only and with no present intention of distributing any of such Shares or any arrangement or understanding with any other persons regarding the distribution of such Shares; (iii) the Investor will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Shares except in compliance with the Securities Act, applicable state securities laws and the respective rules and regulations promulgated thereunder; and (iv) the Investor will notify the Company promptly of any change in any of such information until such time as the Investor has sold all of its Shares or until the Company is no longer required to keep the Registration Statement (as defined in Section 7.1) effective. Nothing contained in this Section 5.1 shall limit any of the Company's representations or warranties or limit the Investor's recourse in respect thereof. 8 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. 5.2 Compliance with Prospectus Delivery Requirement. The Investor hereby covenants with the Company not to make any sale of the Shares without complying with the provisions of this Agreement, including Section 7.2 hereof, and without effectively causing the prospectus delivery requirement under the Securities Act to be satisfied, and the Investor acknowledges that the certificates evidencing the Shares will be imprinted with a legend that prohibits their transfer except in accordance therewith. The Investor acknowledges that there may occasionally be times when the Company determines that it must suspend the use of the Prospectus forming a part of the Registration Statement, as set forth in Section 7.2(c). 5.3 Due Authorization. The Investor has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, and this Agreement has been duly authorized and validly executed and delivered by the Investor and constitutes the legal, valid and binding agreement of the Investor enforceable against the Investor in accordance with its terms. All corporate acts and proceedings required for the authorization, execution and delivery of this Agreement and the performance of this Agreement have been lawfully and validly taken or will have been so taken prior to the Closing. 5.4 No Brokers or Finders. No Person has, or as a result of the transactions contemplated herein will have, any right or valid claim against the Company or the Investor for any commission, fee or other compensation as a finder or broker, or in any similar capacity based upon obligations incurred by the Investor. 6. Enforcement. 6.1 Survival of Representations, Warranties, Covenants and Agreements. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company and the Investor herein shall survive the execution of this Agreement, the delivery to the Investor of the Shares being purchased and the payment therefor. 6.2 Indemnification. (a) The Company hereby covenants and agrees to defend, indemnify and save and hold harmless the Investor, together with its officers, directors, shareholders, employees, attorneys and representatives and each Person who controls Investor within the meaning of the Securities Act, from and against any loss, cost, expense, liability, claim or legal damages (including, without limitation, reasonable fees and disbursements of counsel and accountants and other costs and expenses incident to any actual or threatened claim, suit, action or proceeding, and all costs of investigation) (collectively, the "Damages") arising out of or resulting from (i) any inaccuracy in or breach of, or failure to perform or observe, any representation, warranty, covenant or agreement made by the Company in this Agreement or in any writing delivered pursuant to this Agreement or at the Closing, or (ii) any claims of third parties claiming compensation, commissions or expenses for services as a broker or finder based upon obligations incurred by the Company. Damages resulting directly from the gross negligence or willful misconduct of Investor or any of its respective 9 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. officers, directors, employees or any Person who controls Investor within the meaning of the Securities Act are not covered under this Section 6.2(a). (b) Investor hereby covenants and agrees to defend, indemnify and save and hold harmless the Company, together with its officers, directors, shareholders, employees, attorneys and representatives and each Person who controls the Company within the meaning of the Securities Act, from and against any Damages arising out of or resulting from (i) any inaccuracy in or breach of, or failure to perform or observe, any representation, warranty, covenant or agreement made by the Investor in this Agreement or in any writing or other agreement delivered pursuant hereto, or (ii) any claims of third parties claiming compensation, commissions or expenses for services as a broker or finder based upon obligations incurred by the Investor. Damages resulting directly from the gross negligence or willful misconduct of the Company or any of its respective officers, directors, employees or any Person who controls the Company within the meaning of the Securities Act are not covered under this Section 6.2(b). (c) Each party entitled to be indemnified pursuant to Section 6.2(a) or 6.2(b) (each, an "Indemnified Party") shall notify the other party (the "Indemnifying Party") in writing of any action against such Indemnified Party in respect of which the Indemnifying Party is or may be obligated to provide indemnification on account of Section 6.2(a) or 6.2(b), promptly after the receipt of notice or knowledge of the commencement thereof. The omission of any Indemnified Party so to notify the Indemnifying Party of any such action shall not relieve the Indemnifying Party from any liability which it may have to such Indemnified Party except to the extent the Indemnifying Party shall have been materially prejudiced by the omission of such Indemnified Party so to notify it, pursuant to this Section 6.2(c). In case any such action shall be brought against any Indemnified Party and it shall notify the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to assume the defense thereof, with counsel reasonable satisfactory to such Indemnified Party, and after notice from it to such Indemnified Party of its election so to assume the defense thereof, the Indemnifying Party will not be liable to such Indemnified Party under Section 6.2(a) or 6.2(b) for any legal or other expense subsequently incurred by such Indemnified Party in connection with the defense thereof nor for any settlement thereof entered into without the consent of the Indemnifying Party; provided, however, that (i) if the Indemnifying Party shall elect not to assume the defense of such claim or action or (ii) if the Indemnified Party reasonably determines (x) that there may be a conflict between the positions of the Indemnifying Party and of the Indemnified Party in defending such claim or action or (y) that there may be legal defenses available to such Indemnified Party different from or in addition to those available to the Indemnifying Party, then separate counsel for the Indemnified Party shall be entitled to participate in and conduct the defense, in the case of (i) and (ii)(x), or such different defenses, in the case of (ii)(y), and the Indemnifying Party shall be liable for any reasonable legal or other expenses incurred by the Indemnified Party in connection with the defense. (d) Neither the Indemnified Party nor the Indemnifying Party may concede, settle or compromise any action contemplated by Section 6.2(c) without the consent of the other party, which consent will not be unreasonably withheld or delayed in light of all factors of importance to such party; provided, however, that if the Indemnified Party shall fail to consent to the settlement of any action where (i) such settlement includes an unconditional release of all actions 10 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. against the Indemnified Party and requires no payment on the part of the Indemnified Party to the claimant or any other party, (ii) such settlement does not require any action on the part of the Indemnified Party and does not impose terms restricting or adversely affecting the Indemnified Party's activity, and (iii) the claimant has affirmatively indicated that it will accept such settlement, then the Indemnifying Party shall have no liability with respect to any payment to be made in respect of such action in excess of the proposed settlement amount. (e) The foregoing indemnification provisions are in addition to, and not in derogation of, any statutory, equitable or common-law remedy any party may have for breach of representation, warranty, covenant or agreement, or otherwise. 6.3 Injunctive Relief. (a) Any party may bring a claim seeking specific performance by way of injunctive relief before a court of competent jurisdiction in accordance with Section 9.3 to enforce the provisions of this Agreement, and (b) in the event of any breach by either party of Section 9.10, the other party may seek injunctive relief from a court of competent jurisdiction to restrain any such breach. 6.4 No Implied Waiver. Except as expressly provided in this Agreement, no course of dealing between the Company and Investor and no delay in exercising any such right, power or remedy conferred hereby or now or hereafter existing at law in equity, by statute or otherwise, shall operate as a waiver of, or otherwise prejudice, any such right, power or remedy. 7. Registration of the Shares; Compliance with the Securities Act. 7.1 Registration Procedures and Expenses. The Company shall: (a) use its efforts to prepare and file with the SEC, within twenty (20) days after the Closing Date, a registration statement (the "Registration Statement") to enable the resale of the Shares by the Investor from time to time through the automated quotation system of the Nasdaq Small Cap Market or in privately-negotiated transactions; (b) use its best efforts to cause the Registration Statement to become effective within *** (***) days after the Registration Statement is filed by the Company; (c) use its best efforts to prepare and file with the SEC such amendments and supplements to the Registration Statement and any prospectus used in connection therewith (a "Prospectus") as may be necessary to keep the Registration Statement current and effective for a period not exceeding, with respect to the Shares, the earlier of (i) the second anniversary of the Closing Date, (ii) the date on which the Investor may sell all Shares then held by the Investor without restriction by the volume limitations of Rule 144(e) of the Securities Act, or (iii) such time as all Shares have been sold pursuant to the Registration Statement; (d) furnish to the Investor with respect to the Shares registered under the Registration Statement such number of copies of the Registration Statement, Prospectuses and Preliminary Prospectuses in conformity with the requirements of the Securities Act and such other 11 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. documents as the Investor may reasonably request, in order to facilitate the public sale or other Disposition of all or any of the Shares by the Investor; (e) file documents required of the Company for blue sky clearance in states specified in writing by the Investor; provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented; (f) bear all expenses in connection with the procedures in paragraph (a) through (e) of this Section 7.1 and the registration of the Shares pursuant to the Registration Statement; and (g) advise the Investor, promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying or suspending the effectiveness of the Registration Statement or of the initiation or threat of any proceeding for that purpose; and it will promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued. The Company understands that the Investor disclaims being an underwriter, but the Investor being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has hereunder; provided, however that if the Company receives notification from the SEC that the Investor is deemed an underwriter, then the ninety day period provided in Section 7.1(b) shall be extended to the earlier of (i) the *** (***) day after such SEC notification, or (ii) *** (***) days after the initial filing of the Registration Statement with the SEC. 7.2 Transfer of Shares After Registration; Suspension. (a) The Investor agrees that it will not effect any sale, assignment or other transfer (a "Disposition") of the Shares or its right to purchase the Shares that would constitute a sale within the meaning of the Securities Act except as contemplated in the Registration Statement referred to in Section 7.1 and as described below, and that it will promptly notify the Company of any changes in the information set forth in the Registration Statement regarding the Investor or its plan of distribution. (b) Except in the event that paragraph (c) below applies, the Company shall (i) if deemed necessary by the Investor, prepare and file from time to time with the SEC a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document (A) so that such Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Shares being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (B) to revise or amend the plan of distribution of the Shares as requested by Investor; (ii) provide the Investor copies of any 12 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. documents filed pursuant to Section 7.2(b)(i); and (iii) inform each Investor that the Company has complied with its obligations in Section 7.2(b)(i) (or that, if the Company has filed a post-effective amendment to the Registration Statement which has not yet been declared effective, the Company will notify the Investor to that effect, will use its reasonable efforts to secure the effectiveness of such post-effective amendment as promptly as possible and will promptly notify the Investor pursuant to Section 7.2(b)(i) hereof when the amendment has become effective). (c) Subject to paragraph (d) below, in the event (i) of any request by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to a Registration Statement or related Prospectus or for additional information; (ii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose; (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; or (iv) of any event or circumstance which, upon the advice of its counsel, necessitates the making of any changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; then the Company shall deliver a certificate in writing to the Investor (the "Suspension Notice") to the effect of the foregoing and, upon receipt of such Suspension Notice, the Investor will refrain from selling any Shares pursuant to the Registration Statement (a "Suspension") until the Investor's receipt of copies of a supplemented or amended Prospectus prepared and filed by the Company, or until it is advised in writing by the Company that the current Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in any such Prospectus. In the event of any Suspension, the Company will use its best efforts to cause the use of the Prospectus so suspended to be resumed as soon as reasonably practicable, and in any event not more than *** (***) days after the delivery of a Suspension Notice to the Investor; provided, however, that the Company shall not be required to amend a Registration Statement or supplement a Prospectus for a period of up to *** (***) days after delivery of a Suspension Notice to the Investor if the Company's Board of Directors determines in good faith that do so would be seriously detrimental to *** involving the Company, it being understood that the period for which the Company is obligated to keep the Registration Statement effective under Section 7.1(c) shall be extended for a number of days equal to the number of days the Company delays amendment or supplement pursuant to this provision; provided that the Company shall be able to delay amendment or supplement pursuant to this provision only once. In addition to and without limiting any other remedies (including, without limitation, at law or at equity) available to the Investor, the Investor shall be entitled to ***. (d) Provided that a Suspension is not then in effect the Investor may sell Shares under the Registration Statement, provided that it arranges for delivery of a current 13 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. Prospectus to the transferee of such Shares or sells the Shares pursuant to an exemption under the Securities Act. Upon receipt of a request therefor, the Company agrees to provide an adequate number of current Prospectuses to the Investor and to supply copies to any other parties requiring such Prospectuses. 7.3 Indemnification. For the purpose of this Section 7.3: (i) the term "Selling Stockholder" shall include the Investor and any Person controlling, controlled by or under common control with Investor (an "Affiliate"); (ii) the term "Registration Statement" shall include any final Prospectus, exhibit, supplement or amendment included in or relating to the Registration Statement referred to in Section 7.1; and (iii) the term "untrue statement" shall include any untrue statement or alleged untrue statement, or any omission or alleged omission to state in the Registration Statement a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (a) The Company agrees to indemnify and hold harmless each Selling Stockholder from and against any losses, claims, damages or liabilities to which such Selling Stockholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (i) any untrue statement of a material fact contained in the Registration Statement, or (ii) any failure by the Company to fulfill any undertaking included in the Registration Statement, and the Company will reimburse such Selling Stockholder for any reasonable legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim, or preparing to defend any such action, proceeding or claim; provided, however, that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or is based upon, an untrue statement made in such Registration Statement in reliance upon and in strict conformity with written information furnished to the Company by or on behalf of such Selling Stockholder specifically for use in preparation of the Registration Statement. (b) The Investor agrees to indemnify and hold harmless the Company (and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, each officer of the Company who signs the Registration Statement and each director of the Company) from and against any losses, claims, damages or liabilities to which the Company (or any such officer, director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement of a material fact contained in the Registration Statement if such untrue statement was made in reliance upon and in strict conformity with written information furnished by or on behalf of the Investor specifically for use in preparation of the Registration Statement, and the Investor will reimburse the Company (or such officer, director or controlling person), as the case may be, for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided that 14 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. the Investor's obligation to indemnify the Company shall be limited to the net amount received by the Investor from the sale of the Shares sold by the Investor pursuant to the Registration Statement. (c) Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 7.3, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, but the omission to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section 7.3 (except to the extent that such omission materially and adversely affects the indemnifying party's ability to defend such action) or from any liability otherwise than under this Section 7.3. Subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After notice from the indemnifying person to such indemnified person of its election to assume the defense thereof, such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof; provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person, so long as no indemnifying person is responsible for the fees and expenses of more than one separate counsel for all indemnified parties. In no event shall any indemnifying person be liable in respect of any amounts paid in settlement of any action unless the indemnifying person shall have approved the terms of such settlement; provided that such consent shall not be unreasonably withheld. No indemnifying person shall, without the prior written consent of the indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified person is or could have been a party and indemnification could have been sought hereunder by such indemnified person, unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in this Section 7.3 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the Investor on the other in connection with the statements or omissions or other matters which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, in the case of an untrue statement, whether the untrue statement relates to information supplied by the Company on the one hand or the Investor on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement. The amount paid or payable by an indemnified party as a result of the losses, claims, 15 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), the Investor shall not be required to contribute any amount in excess of the amount by which the net amount received by the Investor from the sale of the Shares to which such loss relates exceeds the amount of any damages which the Investor has otherwise been required to pay by reason of such untrue statement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) The parties to this Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during the negotiations regarding the provisions hereof including, without limitation, the provisions of this Section 7.3, and are fully informed regarding said provisions. They further acknowledge that the provisions of this Section 7.3 fairly allocate the risks in light of the ability of the parties to investigate the Company and its business in order to assure that adequate disclosure is made in the Registration Statement as required by the Act and the Exchange Act. The parties are advised that federal or state public policy as interpreted by the courts in certain jurisdictions may be contrary to certain of the provisions of this Section 7.3, and the parties hereto hereby expressly waive and relinquish any right or ability to assert such public policy as a defense to a claim under this Section 7.3 and further agree not to attempt to assert any such defense. 7.4 Termination of Conditions and Obligations. The conditions precedent imposed by Section 5 or this Section 7 upon the transferability of the Shares shall cease and terminate as to any particular number of the Shares when such Shares shall have been effectively registered for resale under the Securities Act and sold or otherwise disposed of in accordance with the intended method of Disposition set forth in the Registration Statement covering such Shares or at such time as an opinion of counsel satisfactory to the Company in its reasonable judgment shall have been rendered to the effect that such conditions are not necessary in order to comply with the Securities Act. 7.5 Information Available. So long as the Registration Statement is effective covering the resale of Shares owned by the Investor, the Company will furnish to the Investor: (a) as soon as practicable after it is available, one copy of (i) its Annual Report to Stockholders (which Annual Report is mailed to shareholders with the Company's Form 10-K, which shall contain financial statements audited in accordance with generally accepted accounting principles by a national firm of certified public accountants), (ii) its Annual Report on Form 10-K and (iii) its Quarterly Reports on Form 10-Q (the foregoing, in each case, including exhibits); and (b) an adequate number of copies of the Prospectuses to supply to any other party requiring such Prospectuses; and the Company, upon the reasonable request of the Investor, will meet with the Investor or a representative thereof at the Company's headquarters to discuss all information relevant for disclosure in the Registration Statement covering the Shares and 16 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. will otherwise cooperate with the Investor conducting an investigation for the purpose of reducing or eliminating the Investor's exposure to liability under the Securities Act, including the reasonable production of information at the Company's headquarters. 7.6 ***. Except as otherwise set forth in this Section 7.6, the Investor agrees not to *** for a *** of (a) *** following the *** or (b) the *** to *** (as defined therein) in accordance with the provisions of the License and Development Agreement. Notwithstanding the foregoing, there shall be no restriction on any *** by the Investor: (i) to any ***; provided, however, that this Agreement shall be ***; (ii) which has been ***; (iii) pursuant to a ***; (iv) pursuant to a *** to which the Company is a party; (v) in a ***or ***; or (vi) pursuant to ***. 7.7 Other Registration Rights. Except as provided in Section 7.4, so long as the Investor or any of its Affiliates owns any of the Shares, the Company will not grant to any Person the right to request to register any equity securities of the Company, or any securities convertible or exchangeable into or exercisable for such securities, which *** with the ***, without the prior written consent of the Investor. Notwithstanding the foregoing, it is understood that the Company may grant rights to other Persons to (a) participate in *** so long as such rights are *** and ***, and (b) request registrations so long as the Investor is entitled to participate in any such registrations ***. 8. Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed (a) if within domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile, or (b) if delivered from outside the United States, by International Federal Express or facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed, (iv) if delivered by facsimile, upon electric confirmation of receipt and shall be delivered as addressed as follows: (a) if to the Company, to: Bioject Medical Technologies, Inc. 7620 S.W. Bridgeport Road Portland, Oregon 97224 Attn: James O'Shea, Chairman, President and Chief Executive Officer Facsimile: (503) 620-6431 with a copy to: Dorsey & Whitney LLP US Bank Building Center 1420 5th Avenue, Suite 400 Seattle, WA 98101 Attn: Kimberley R. Anderson, Esq. Facsimile: (206) 903-8800 17 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. (b) if to the Investor, to: Amgen Inc. One Amgen Center Drive Thousand Oaks, California 91320-1789 Attn: General Counsel, Senior Vice President, Corporate Development and Corporate Secretary Facsimile: (805) 499-8011 9. Miscellaneous. 9.1 No Waiver. Failure by either party to insist upon strict observance of or compliance with any of the terms of this Agreement in one or more instances shall not be deemed to be a waiver of its rights to insist upon such observance of compliance with the other terms hereof nor any waiver with respect to any subsequent failures to observe compliance with such terms in the future. 9.2 Assignment. Neither this Agreement nor any interest herein may be assigned by either party hereto without the written consent of the other party hereto, except that Investor may assign all of its rights hereunder to any Affiliate of Investor. Subject to the foregoing, all the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, whether so expressed or not. Subject to the immediately preceding sentence, this Agreement shall not run to the benefit of or be enforceable by any Person other than a party to this Agreement and its successors and assigns. The Company may not assign this Agreement without the prior written consent of the Investor, which may be withheld in the Investor's sole discretion. This Agreement shall be binding upon and inure to the benefit of the parties, their successors and permitted assigns. 9.3 Governing Law; Jurisdiction. This Agreement is governed by the laws of the State of California, without regard to its principles of conflicts of law. Each of the parties hereby submits to the exclusive jurisdiction of the courts of California, both state and federal, for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby, and each party agrees not to commence any action, suit or proceeding relating thereto except in such courts. 9.4 Further Actions. The parties agree to execute, acknowledge and deliver such further instruments and to do all such other incidental acts as may be reasonably necessary or appropriate to carry out the purpose and intent of this Agreement. 9.5 Severability. In the event any one or more of the provisions of this Agreement should for any reason be held by any court or authority having jurisdiction over either of the parties or this Agreement to be invalid, illegal or unenforceable, such provision or provisions shall be validly reformed so as to as nearly approximate the intent of the parties as possible or, if unreformable, shall be divisible and deleted in such jurisdiction; elsewhere, this Agreement shall not be affected. 18 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. 9.6 Captions. The Parties agree that the headings in the Agreement are used for the convenience of the Parties only and are not intended to be used in the interpretation of this Agreement. 9.7 Entire Agreement. This Agreement, including the Exhibits and other documents provided for herein and contemplated hereby, contains the entire understanding between the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, understandings, representations and communications, whether written or oral. This Agreement shall not be amended or supplemented except in a written document duly executed by a duly authorized representative of each party. 9.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. 9.9 Rule 144. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such reports, it will, upon the request of the Investor made after the first anniversary of the Closing Date, make publicly available such information as necessary to permit sales pursuant to Rule 144 under the Securities Act), and it will take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Shares purchased hereunder without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of the Investor, the Company will deliver to such holder a written statement as to whether it has complied with such information and requirements. 9.10 Public Announcements. Subject to Section 9.11, neither party shall issue a press release or make any other disclosure of the existence of or the terms of this Agreement to any Person, or otherwise use the name or trademarks or products of the other party or the names of any employees thereof, without the prior approval of such press release or disclosure by the other party hereto. 9.11 Required Disclosure. If in the reasonable opinion of any party's counsel (which may include such party's internal counsel), a disclosure which is subject to Section 9.10 shall be required by law, regulation or court order, including without limitation in a filing with the SEC or the United States Food and Drug Administration, then the disclosing party shall provide copies of the disclosure reasonably in advance of such filing or other disclosure for the nondisclosing party's prior review and comment, and the nondisclosing party shall provide its comments, if any, on such announcement as soon as practicable. 19 ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. AMGEN INC. By: /s/ Gordon M. Binder ------------------------------------ Gordon M. Binder Chairman of the Board and Chief Executive Officer BIOJECT MEDICAL TECHNOLOGIES, INC. By: /s/ James C. O'Shea ------------------------------------ James C. O'Shea President and Chief Executive Officer ***Confidential treatment has been requested pursuant to Rule 406 of the Securities Act of 1933, as amended. Omitted portions have been filed separately with the Securities and Exchange Commission. EX-5.1 3 OPINION OF DORSEY & WHITNEY LLP EXHIBIT 5.1 [Letterhead of Dorsey & Whitney LLP] March 20, 2000 Bioject Medical Technologies Inc. 7620 SW Bridgeport Road Portland, Oregon 97224 Gentlemen and Ladies: We are delivering this opinion in connection with the Registration Statement on Form S-3 (the "Registration Statement") of Bioject Medical Technologies Inc. (the "Company") to be filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), with respect to an aggregate of 65,796 shares, without par value, of common stock of the Company (the "Shares") to be resold by certain selling shareholders named therein (the "Selling Shareholders"). We have examined and are familiar with originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments relating to the incorporation of the Company and to the authorization and issuance of the Shares, and have made such investigations of law, as we have deemed necessary and advisable. Based upon the foregoing and having due regard for such legal questions as we have deemed relevant, we are of the opinion that: The 65,796 Shares, which were purchased by The Selling Shareholders, have been duly authorized, and, when issued, constituted or will constitute duly authorized, legally issued, fully paid and nonassessable shares of common stock of the Company. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement referred to above, and to the reference to our firm in the Prospectus constituting a part of the Registration Statement. Very truly yours, /s/DORSEY & WHITNEY LLP EX-23.2 4 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS EXHIBIT 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Form S-3 Registration Statement of our report dated May 7, 1999 included in the Bioject Medical Technologies, Inc. Annual Report on Form 10-K for the fiscal year ended March 31, 1999 and to all references to our firm included in this Registration Statement. /s/ Arthur Andersen, LLP Portland, Oregon March 17, 2000 -----END PRIVACY-ENHANCED MESSAGE-----