-----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, R8sKq++OaBTOnPb4jpb7MuUOW6rjCd1QZ3FU0UAKBKW7NQbnjsHoFiokrbWzdpv8 xPwYpQW4pWPDsdrXRvQ31w== 0001104659-07-084718.txt : 20071121 0001104659-07-084718.hdr.sgml : 20071121 20071121160055 ACCESSION NUMBER: 0001104659-07-084718 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20071115 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Triggering Events That Accelerate or Increase a Direct Financial Obligation under an Off-Balance Sheet Arrangement ITEM INFORMATION: Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071121 DATE AS OF CHANGE: 20071121 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: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15360 FILM NUMBER: 071263421 BUSINESS ADDRESS: STREET 1: 20245 SW 95TH AVENUE CITY: TUALATIN STATE: OR ZIP: 97062 BUSINESS PHONE: 5036928001 MAIL ADDRESS: STREET 1: 20245 SW 95TH AVENUE CITY: TUALATIN STATE: OR ZIP: 97062 FORMER COMPANY: FORMER CONFORMED NAME: BIOJECT MEDICAL SYSTEMS LTD DATE OF NAME CHANGE: 19920703 8-K 1 a07-29905_18k.htm 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 15, 2007

BIOJECT MEDICAL TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

Commission File Number: 0-15360

Oregon	93-1099680
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

20245 SW 95^th Avenue
Tualatin, Oregon	97062
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (503) 692-8001

Former name or former address if changed since last report:
No Change

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

BIOJECT MEDICAL TECHNOLOGIES INC.

FORM 8-K

INDEX

Item		Description

Item 1.01		Entry into a Material Definitive Agreement

Item 2.03		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant

Item 2.04		Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

Item 3.01		Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

Item 3.02		Unregistered Sales of Equity Securities

Item 5.02		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 9.01		Financial Statements and Exhibits

Signatures

Item 1.01 Entry into a Material Definitive Agreement

Forbearance No. 1, Limited Waiver and Modification to Loan and Security Agreement

On November 19, 2007 Bioject Medical Technologies Inc. (the “Company” or “Bioject”) entered into a Forbearance No. 1, Limited Waiver and Modification to Loan and Security Agreement (the “Forbearance Agreement”) with Partners For Growth, L.P. (“PFG”). Bioject is party to a loan term agreement with PFG dated August 31, 2007 with respect to a $500,000 term loan (the “Term Loan”). In November 2007, PFG informed Bioject that PFG believed Bioject was out of compliance with the financial revenue covenant contained in the Term Loan agreement. Such a default would also constitute an event of default under two other loan agreements that Bioject has outstanding with PFG. All such loans are referred to collectively as the “PFG Loans.”

Pursuant to the Forbearance Agreement, PFG has agreed to forbear, through no later than June 1, 2008 (the “Forbearance Period”), and not declare an Event of Default or exercise other remedies under the PFG Loans for a Permitted Default, as defined in the Forbearance Agreement.

The Forbearance Agreement requires that Bioject must consummate a subordinated debt or equity financing of at least $500,000 by December 14, 2007, which requirement has been satisfied (see below), and requires that Bioject maintain certain minimum levels of cash and cash equivalents.

Bioject may not borrow under its existing revolving loan with PFG during the Forbearance Period without PFG’s consent.

The Forbearance Agreement provides that Bioject must pay $550,000 to PFG on November 20, 2007. PFG will apply the $550,000 to the outstanding revolving loan obligation under the Loan and Security Agreement.

The Forbearance Agreement also provides for the amendment of the following instruments as follows:

• the warrant dated December 11, 2006 to purchase 200,000 shares of common stock will be amended to change the exercise price from $1.37 per share to $0.90 per share;

• the $1.25 million convertible debt financing will be amended to adjust the conversion price from $1.37 per share to $0.90 per share, thereby making it convertible into 1,388,889 shares of common stock instead of 912,409 shares;

• the warrant dated December 14, 2004 to purchase 725,000 shares of common stock will be amended to change the exercise price from $1.42 per share to $0.90 per share; and

• the warrant dated August 31, 2007 to purchase 71,429 shares of common stock will be amended to change the exercise price from $1.40 per share to $0.90 per share.

These exercise and conversion prices are subject to further adjustment in certain events described in the Forbearance Agreement. The Forbearance Agreement specifies certain financial covenants that Bioject must comply with during the Forbearance Period.

In addition, during the Forbearance Period, this Forbearance Agreement amends the PFG Loans, other than the $1.25 million convertible debt financing, by reducing the interest rate specified in each such loan agreement by 3% per annum.

Convertible Note Purchase and Warrant Agreement and Convertible Promissory Notes

On November 19, 2007, Bioject entered into Convertible Note Purchase and Warrant Agreements (the “Agreements”) pursuant to which it issued Convertible Promissory Notes (the “Notes”) and warrants to purchase Common Stock (the “Warrants”). Pursuant to the Agreements, Bioject sold a Note in the principal amount of $500,000 to Mr. Edward Flynn and sold an aggregate of $115,000 principal amount of Notes to Ralph Makar, David Tierney, Richard Stout and Christine Farrell (collectively with Mr. Flynn, the “Purchasers”). The Notes bear interest at the rate of 8% per annum with all principal and interest due 18 months from the date of issue and may not be prepaid without the written consent of the Purchaser holding a given Note. The Notes are convertible at any time by the Purchasers into Bioject’s common stock at the rate of $0.75 per share. The Notes will be automatically converted upon a qualified financing, as defined in the Agreement, at a price equal to the financing price.

The Warrants are exercisable for an aggregate of 82,000 shares of Bioject’s common stock at an exercise price of $0.75 per share. Each Warrant is immediately exercisable and expires four years from the date of issuance.

Prior to this Agreement, Mr. Flynn held 1,427,570 shares of the Company’s common stock. Mr. Tierney is a director of the Company. Mr. Makar is a director and Chief Executive Officer of the Company. Mr. Stout and Ms. Farrell are executive officers of the Company.

Registration Rights Agreement

The Company also entered into a Registration Rights Agreement with each Purchaser granting piggy-back registration rights.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

(a) See Item 1.01 Entry into a Material Definitive Agreement - Convertible Note Purchase and Warrant Agreement and Convertible Promissory Notes or disclosures required pursuant to this Item 2.03.

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

(a) See Item 1.01 Entry into a Material Definitive Agreement - Forbearance No. 1, Limited Waiver and Modification to Loan and Security Agreement above for disclosures required pursuant to this Item 2.04.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

(a) On November 15, 2007, the Company received a Nasdaq Staff Deficiency Letter stating that it has failed to comply with Marketplace Rule 4310(c)(3), which requires the Company to have a minimum of $2.5 million in stockholders’ equity or $35.0 million market value of listed securities or $0.5 million of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years. The Company is required to provide the Nasdaq Staff, by November 30, 2007, its specific plan to achieve and sustain compliance with the listing requirements, including the time frame for completion of the plan. The Nasdaq Staff will review such plan and, if the Nasdaq Staff determines that the Company’s plan does not adequately address the issues, it will provide written notification that the Company’s securities will be delisted.

Also, on November 19, 2007, the Company received a Nasdaq Staff Deficiency Letter stating that it has failed to comply with the minimum bid price requirement for continued listing set forth in Marketplace Rule 4310(c)(4) because for 30 consecutive business days the bid price of Bioject’s common stock has closed below the minimum $1.00 bid requirement. The letter states that Bioject will be provided 180 calendar days, or until May 19, 2008, to regain compliance with the minimum bid price requirement. If, at any time prior to May 19, 2008, the bid price of Bioject’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq will notify Bioject that it is in compliance with the minimum bid requirement. Nasdaq may, in its discretion, extend this 10 consecutive business day period, but generally not beyond 20 consecutive business days. If by May 19, 2008 the Company has not regained compliance with the minimum bid price, and the Nasdaq Staff determines that the Company meets the Nasdaq Capital Market initial listing criteria, other than the minimum bid price, then the Company will be granted an additional 180 days to regain compliance with the minimum bid price requirement.

Item 3.02 Unregistered Sales of Equity Securities

As discussed in Item 1.01 above, on November 19, 2007, the Company issued $615,000 principal amount of convertible notes and warrants exercisable for 82,000 shares of its common stock. See Item 1.01 above for a description of the conversion terms for the convertible notes. These issuances of securities were exempt from registration under the Securities Act of 1933, as amended, pursuant to Rule 506 thereunder, among other exemptions, on the basis that the purchasers of the securities in this issuance are accredited investors.

Item 5.02 Departure of Directors and Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation of Arrangements of Certain Officers

Mr. Edward Flynn was appointed as a director of the Company effective November 19, 2007. He was appointed as a condition to his purchasing the $500,000 Note described in Item 1.01. The Company has agreed that he will have the right to nominate one director for election for so long as he owns at least 1 million shares of Common Stock. Mr. Flynn is expected to be named to the Compensation, Audit and Ad-Hoc Financing Committees. See Item 1.01 for a description of the Note purchased by Mr. Flynn, the Warrant he received and the related agreements.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibits are filed herewith and this list is intended to constitute the exhibit index:

10.1		Forbearance No. 1, Limited Waiver and Modification to Loan and Security Agreement dated November 19, 2007 between Bioject Medical Technologies Inc. and Partners For Growth II, L.P.
10.2		Convertible Note Purchase and Warrant Agreement dated November 19, 2007 between Bioject Medical Technologies Inc. and Edward Flynn.
10.3		Form of Convertible Note Purchase and Warrant Agreement between Bioject Medical Technologies Inc. and each of Ralph Makar, David Tierney, Richard Stout and Christine Farrell.
10.4		Form of Warrant issued by Bioject Medical Technologies Inc. to the Purchasers.
10.5		Form of Convertible Promissory Note issued by Bioject Medical Technologies Inc. to the Purchasers.
10.6		Form of Registration Rights Agreement between Bioject Medical Technologies Inc. and the Purchasers.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 21, 2007	BIOJECT MEDICAL TECHNOLOGIES INC.
	(Registrant)



	/s/ CHRISTINE M. FARRELL
	Christine M. Farrell
	Vice President of Finance
	(Principal Financial and Accounting Officer)

EX-10.1 2 a07-29905_1ex10d1.htm EX-10.1

EXHIBIT 10.1

FORBEARANCE NO. 1, LIMITED WAIVER AND MODIFICATION

LOAN AND SECURITY AGREEMENT

THIS FORBEARANCE NO. 1, LIMITED WAIVER AND MODIFICATION TO LOAN AND SECURITY AGREEMENT (this “Forbearance”) is entered into this 19th day of November, 2007, by and among Bioject Medical Technologies, Inc., an Oregon corporation and Bioject, Inc., each with its principal place of business at 20245 S.W. 95th Ave., Tualatin, OR 97062 USA (individually and collectively, “Borrower”) and PARTNERS FOR GROWTH, L.P. (“PFG”). Capitalized terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below).

RECITALS

A. Borrower and PFG have entered into that certain Loan and Security Agreement dated as of August 31, 2007 (as may be amended, restated, or otherwise modified, the “Loan Agreement”, and together with such documents, instruments and security agreements as were executed reasonably contemporaneously with or in connection with the Loan Agreement, the “Loan Documents”), pursuant to which PFG has extended and conditionally-agreed to make available to Borrower certain advances of money.

B. In addition to the loan specified in Recital A, Borrower and PFG are party to a Term Loan and Security Agreement dated as of March 29, 2006 (the “Convertible Loan”), a Loan and Security Agreement dated as of December 11, 2006 (the “Revolving Loan Agreement”) and associated cross-corporate guarantees and security agreements (the “Additional PFG Loans” and, together with the loan set forth in the Loan Documents, the “Outstanding PFG Loans”).

C. Borrower is currently in default under the Loan Agreement by its failure to comply with the financial revenue covenant set forth in Section 5 of the Schedule to the Loan Agreement (the “Default”) and such Default also constitutes an Event of Default under the Additional PFG Loans.

D. Borrower (a) acknowledges the Default, (b) desires that PFG not declare an Event of Default or exercise other remedies under the Outstanding PFG Loans due to the above-referenced Default (to “Forbear”) from the date hereof until the earlier to occur of the termination of this Forbearance or June 1, 2008 (the “Forbearance Period”), and (c) desires that PFG provide the conditional limited waiver of the Default upon the terms and conditions more fully set forth herein.

E. Subject to the representations and warranties of Borrower herein and upon the terms and conditions set forth in this Forbearance, PFG is willing to Forbear for the Forbearance Period and provide the conditional limited waiver contained herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing Recitals, incorporated by reference herein, and intending to be legally bound, the parties hereto agree as follows:

1. Event of Default. Borrower acknowledges the Default.

2. Forbearance of PFG. Subject to Borrower’s performance of this Forbearance and the satisfaction of the conditions set forth in Section 8 hereof, PFG agrees to Forbear during the Forbearance Period. In the event of a breach by Borrower of any of the terms set forth in this Forbearance, a failure of any condition set forth in Section 8, or the occurrence of any Default under the Outstanding PFG Loans other than a Permitted Default, PFG, at its option, with such notice to Borrower (if any) as may be required by the Loan Documents, may terminate this Forbearance and exercise any remedies available to PFG under the Outstanding PFG Loans and under applicable law. For purposes of this Forbearance, a “Permitted Default” shall mean (i) the specific Default for which PFG is agreeing to Forbear hereunder as set forth under Recital C, above, and (ii) all financial covenants contained in Section 5 of the Schedule to the Loan Agreement

(other than the “Minimum Liquidity” covenant set forth in Section 8.7 of this Forbearance), and (iii) any alleged Material Adverse Change in Borrower’s financial condition.

3. Limited Waiver and Consent. PFG hereby agrees to waive any Permitted Default for the Forbearance Period, subject to satisfaction of the conditions set forth in Section 8 hereof and Borrower’s compliance with the terms and conditions of this Forbearance. PFG hereby consents to Borrower’s issuance of up to $3,000,000 aggregate principal amount of convertible unsecured promissory notes between November 15, 2007 and June 1, 2008. For the avoidance of doubt, the foregoing dollar threshold of convertible unsecured promissory notes has been proposed by Borrower without any threshold requirement on the part of PFG.

4. Borrower’ Representations And Warranties. Borrower represents and warrants that:

(a) immediately upon giving effect to this Forbearance (i) the representations and warranties contained in the Loan Documents are true, accurate and complete (i.e., do not omit to state a material fact necessary in order to make the statements made, in light of the circumstances which they were made, not misleading) in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they were true and correct as of such date), and (ii) no Event of Default has occurred and is continuing, other than the Default(s) waived pursuant to this Forbearance;

(b) Borrower has the corporate power and authority to execute and deliver this Forbearance and to perform its obligations under the Loan Agreement, as amended by this Forbearance;

(c) the certificate of incorporation, bylaws and other organizational documents of Borrower delivered to PFG on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

(d) the execution and delivery by Borrower of this Forbearance, the Amendments (as defined in Section 8.2) and the performance by Borrower of its obligations under the Loan Agreement and Amended Warrant have been duly authorized by all necessary corporate action on the part of Borrower;

(e) this Forbearance has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights; and

(f) as of the date hereof, it has no known defenses against the obligations to pay any amounts under the Obligations and it has no known claims of any kind against PFG. Borrower acknowledges that, to its knowledge, PFG has acted in good faith and has conducted in a commercially reasonable manner its relationships with Borrower in connection with this Forbearance and in connection with the Loan Documents. For purposes hereof, the term “knowledge” (and derivative terms) means the actual knowledge of any executive officer of Borrower or such knowledge as a reasonably prudent executive officer of a U.S. publicly-traded corporation would have if such executive officer exercised reasonable diligence in the performance of his or her legal duties and responsibilities.

Borrower understands and acknowledges that PFG is entering into this Forbearance in reliance upon, and in partial consideration for, the above representations and warranties.

5. Borrowing During Forbearance Period. Borrower shall not be entitled to borrow under any Outstanding PFG Loans during the Forbearance Period and PFG may, but shall not be obligated to, lend during the Forbearance Period.

6. Release. Borrower hereby forever relieves, releases, and discharges PFG and its present or former employees, officers, directors, agents, representatives, attorneys, and each of them, from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses, actions and causes of action, of every type, kind, nature, description or character, whether known or unknown, suspected or unsuspected, absolute or contingent, arising out of or in any manner connected with or related to facts, circumstances, issues, controversies or claims existing or arising from the beginning of time through and including the date of execution of this

Forbearance (collectively “Released Claims”). Without limiting the foregoing, the Released Claims shall include any and all liabilities or claims (except for those arising from gross negligence or intentional misconduct in relation to any confidentiality obligations PFG may have in respect of Borrower) arising out of or in any manner connected with or related to the Loan Documents, the Recitals hereto, any instruments, agreements or documents executed in connection with any of the foregoing or the origination, negotiation, administration, servicing and/or enforcement of any of the foregoing. In furtherance of this release, Borrower expressly acknowledges and waives any and all rights under Section 1542 of the California Civil Code, which provides as follows: “A general release does not extend to claims which the creditor does not know or expect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” By entering into this release, Borrower recognizes that no facts or representations are ever absolutely certain and it may hereafter discover facts in addition to or different from those which it presently knows or believes to be true, but that it is the intention of Borrower hereby to fully, finally and forever settle and release all matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if any Borrower should subsequently discover that any fact that it relied upon in entering into this release was untrue, or that any understanding of the facts was incorrect, neither Borrower shall be entitled to set aside this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances. Borrower acknowledges that it is not relying upon and has not relied upon any representation or statement made by PFG with respect to the facts underlying this release or with regard to any of such party’s rights or asserted rights. This release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against any action, suit, or other proceeding that may be instituted, prosecuted or attempted in breach of this release. Borrower acknowledges that the release contained herein constitutes a material inducement to PFG to enter into this Forbearance, and that PFG would not have done so but for PFG’s expectation that such release is valid and enforceable in all events. Borrower hereby represents and warrants to PFG, and PFG is relying thereon, as follows: (i) except as expressly stated in this Forbearance, neither PFG nor any agent, employee or representative of PFG has made any statement or representation to any Borrower regarding any fact relied upon by any Borrower in entering into this Forbearance; (ii) Borrower has made such investigation of the facts pertaining to this Forbearance and all of the matters appertaining thereto, as it deems necessary; (iii) the terms of this Forbearance are contractual and not a mere recital; (iv) this Forbearance has been carefully read by Borrower, the contents hereof are known and understood by Borrower, and this Forbearance is signed freely, and without duress, by Borrower; (v) Borrower represents and warrants that it is the sole and lawful owner of all right, title and interest in and to every claim and every other matter which it releases herein, and that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or entity any claims or other matters herein released. Borrower shall indemnify PFG, defend and hold it harmless from and against all claims based upon or arising in connection with prior assignments or purported assignments or transfers of any claims or matters released herein.

7. Limitation. The forbearance, conditional limited waivers and amendments set forth in this Forbearance shall be limited precisely as written and shall not be deemed (a) to be a forbearance, waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which PFG may now have or may have in the future under or in connection with the Loan Agreement or any instrument or agreement referred to therein; (b) to be a consent to any future amendment or modification, forbearance or waiver to any instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the provisions thereof; or (c) to limit or impair PFG’s right to demand strict performance of all terms and covenants as of any date. Except as expressly amended hereby, the Loan Agreement shall continue in full force and effect.

8. Effectiveness. Subject to the satisfaction of the conditions precedent set forth below, this Forbearance shall become effective on the date hereof, but shall continue to be subject to the satisfaction of all the following conditions:

8.1 Partial Repayment of Obligations. On the date hereof, Borrower shall issue an irrevocable instruction to UBS Financial Services Inc. to pay PFG (in accordance with PFG’s written wire transfer instructions) on November 20, 2007 $550,000 (the “Debt Payment”) from Borrower’s account no. 04513 (the “UBS Account”). For the avoidance of doubt, without regard to the source of funds for the Debt Payment, it is a condition to this Forbearance that Borrower reduce outstanding Obligations by $550,000 on November 20, 2007. The parties agree that PFG shall apply such payment to reduce the outstanding revolving loan Obligations under the Revolving Loan Agreement.

8.2 Amendment of Agreements and Instruments. Each of (i) the warrant dated December 11, 2006 to purchase 200,000 shares of common stock of Bioject Medical Technologies, Inc., (ii) the $1,250,000 convertible loan dated March 29, 2006, (iii) the warrant dated December 14, 2004 to purchase 725,000 shares of common stock of

Bioject Medical Technologies, Inc., and (iv) the warrant dated August 31, 2007 to purchase 71,429 shares of common stock of Bioject Medical Technologies, Inc. shall each be promptly amended with effect from the date hereof to reflect the terms of Exhibit A hereof (the “Amendments”); provided, however, that the amendment referred to in clause (ii) above shall not be effective until Borrower has amended the Rights Agreement dated November 15, 2004, between Bioject Medical Technologies, Inc. and American Stock Transfer and Trust Company to exclude PFG from the definition of an “Acquiring Person” to the extent necessary and Borrower agrees to use its reasonable best efforts to obtain such amendment as soon as practicable and in no event later than December 31, 2007. For the avoidance of doubt, Borrower’s failure to secure such consent and execute the Amendments constitutes a breach of the terms of this Forbearance.

8.3 Execution and Delivery. Borrower and PFG shall have duly executed and delivered this Forbearance and all Amendments to PFG;

8.4 Payment of PFG Expenses. All PFG Expenses (including all reasonable attorneys’ fees and reasonable expenses) incurred in connection with this Forbearance shall immediately become a part of the Borrower’s Obligations and shall be due and payable upon PFG demand.

8.5 Additional Capital. Borrower shall, not later than December 14, 2007, consummate a subordinated debt or equity financing of at least $500,000 substantially upon the terms set forth in that certain term sheet appended hereto as Exhibit B.

8.6 Further Assurances. Borrower shall execute and deliver such amendments, documents and instruments as are necessary or appropriate to effect the conditions to this Forbearance, including without limitation, the Amendments.

8.7 Minimum Liquidity. As of November 30, 2007, December 31, 2007 and January 31, 2008, Borrower shall maintain cash and cash equivalents equal to the greater of (i) Borrower’s aggregate net cash operating loss for the three most recent full calendar months or (ii) $500,000. As of February 29, 2008 and as of the last day of each calendar month thereafter that this Forbearance is in effect, Borrower shall maintain cash and cash equivalents equal to the greater of (i) one and one-half times (1.5x) Borrower’s aggregate net cash operating loss for the three most recent full calendar months or (ii) $500,000. For purposes of this Section, Borrower’s “cash and cash equivalents” shall include the securities in the UBS Account; Borrower’s monthly “cash operating loss” shall be calculated on the same basis as set forth in the “Results of Operations” in Borrower’s historical periodic reports filed with the Securities and Exchange Commission, as adjusted for non-cash items; and Borrower’s “aggregate net operating loss for the three most recent full calendar months” shall be the sum of the three months’ operating losses and profits (for example, if Borrower has losses of $200,000 and $150,000 and a profit of $100,000 for a three month period, the aggregate net operating loss for such months would be $250,000, not $350,000).

9. MODIFICATION OF OUTSTANDING PFG LOANS. During the Forbearance Period, the interest rate applicable to the Outstanding PFG Loans, other than the Convertible Loan (as defined in Recital B), as set forth in Section 2 of the Schedule to the Loan and Security Agreement for each such Outstanding PFG Loan shall be reduced by three percent (3%) per annum and each such Loan and Security Agreement, other than the Convertible Loan, is deemed modified accordingly.

10. COUNTERPARTS. This Forbearance may be signed in any number of counterparts, and by different parties hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of this Forbearance.

11. INTEGRATION; CONSTRUCTION. This Forbearance, the Amendments and any other documents executed in connection herewith or therewith or pursuant hereto or thereto contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Forbearance; except that any financing statements or other agreements or instruments filed by PFG with respect to Borrower shall remain in full force and effect. The title of this Agreement and section headings are for the readers’ convenience only and shall be ignored for purposes of integration into the Loan Agreement. The term “Schedule” means the Schedule to the Loan Agreement.

12. Severability. If one or more provisions of this Agreement are held to be unenforceable or are in violation of any applicable law or stock exchange rules or regulations to which either Borrower of PFG is subject, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable or that is in violation. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

12. Governing Law; Venue. THIS FORBEARANCE SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Borrower and PFG each submit to the exclusive jurisdiction of the State and Federal courts in San Francisco County, California.

13. TO THE EXTENT PERMITTED BY APPLICABLE LAW, PFG AND BORROWER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the San Francisco County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in San Francisco County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders and issuing preliminary and permanent injunctions. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the San Francisco County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which, other than a limitation of not more than 3 depositions per party of not more than 5 hours each, shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and order applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to the California Code of Civil Procedure § 644(a). The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph and may grant appropriate relief from the terms of this paragraph for good cause shown.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Forbearance to be executed as of the date first written above.

Borrower:	Bioject, Inc.
	an Oregon corporation

	By:	/s/ Ralph Makar
	Printed Name: Ralph Makar
	Title: President and CEO

Borrower:	Bioject Medical Technologies, Inc.
	an Oregon corporation

	By:	/s/ Ralph Makar
	Printed Name: Ralph Makar
	Title: President and CEO

PFG:	Partners for Growth, L.P.


	By:	/s/ Andrew W. Kahn
	Printed Name: Andrew W. Kahn
	Title: Manager, Partners for Growth, LLC, its General Partner

Exhibit A

Warrant/Conversion changes:

The Exercise Price shall be equal to $0.90 per share, provided, however, that if the Company consummates a Financing at an Effective Price lower than $0.90 per share, then the Exercise Price shall be the lesser of $0.90 per share or 120% of such Effective Price. If, however, the Company fully repays all monetary Obligations under the Oustanding PFG Loans other than from proceeds (in whole or in part) of a Financing (as defined), the Exercise price shall be $0.90 per share. For purposes of the foregoing, a “Financing” means a closing of any equity or convertible securities financing on or before the first anniversary of the date of the Forbearance Agreement, other than closings of up to $3,000,000 in aggregate proceeds completed on or prior to January 31, 2008 upon the same economic terms of the financing specified in Section 8.5 of the Forbearance No. 1, Limited Waiver and Modification to Loan and Security Agreement. The “Effective Price” means the price at which equity securities are issued in any such Financing or the price at which convertible securities issued in any such Financing convert into equity securities (whether or not such price is determinable on or before the first anniversary of the date of the Forbearance Agreement), provided that if the securities issued in any such Financing consist of any combination of securities (such as, for example only, a unit consisting of stock with accompanying warrants or other derivative securities), the Effective Price shall be reduced by the value of the accompanying warrants or other derivative securities. For this purpose, the value of warrants or other derivative securities shall be valued on an “as-converted/exercised” weighted average basis. For example, if a package of securities is sold consisting of one share and a warrant exercisable for one share for a total consideration of 76 cents, the Effective Price of the common stock sold would be determined to be 38 cents (76 cents divided by [1 share plus 1 share as exercised from the warrant]). If the securities issued in any such Financing are equity securities of a class or series other than the Warrant Stock, this Warrant shall be exercisable, at the sole option of Holder, for such other securities issued in any such Financing and such securities shall be deemed to be Warrant Stock hereunder (adjusted as appropriate to reflect conversion rates into Warrant Stock of other than one-to-one). Notwithstanding the foregoing, with respect to the loan, the conversion price may not be reduced below an amount that would result in a number of shares of Common Stock issuable upon conversion of the loan, when aggregated with the number of shares issuable upon exercise or conversion of warrants and other convertible securities and Common Stock held by PFG at such time, exceeding 19.9% of the Common Stock of the Company outstanding at such time. If the adjustment to the conversion price would result in the issuance of a number of shares of stock exceeding such threshold, the Company shall promptly seek shareholder approval of the shares in excess of such threshold and shall recommend shareholders approve such action. If the shareholders do not approve the issuance of such additional shares of stock, the Outstanding PFG Loans shall be due upon demand. If such stockholder approval is secured, the Company agrees to cooperate with PFG in acting as trustee of a voting trust in respect of the stock owned by PFG in favor of the Company so that the Company may vote stock owned by PFG.

[Appropriate and similar adjustments to be made to the languge of the convertible loan.]

Exhibit B

Term Sheet

Bioject Medical Technologies Inc.

November 15, 2007

Offering Memorandum Terms

Offering Terms For Convertible Note

Issuer:		Bioject Medical Technologies Inc., an Oregon corporation (the “Company”).
Amount:		Up to $1.5 million.
Timing for Offer:		Offer will close on December 14, 2007 (latest).
Securities to be Issued:		Convertible note with 18 month term bearing 8% interest.
Conversion Price:		(i) The higher of $0.75 per share or current market price + 50% (voluntary conversion) or (ii) as part of an equity financing of at least $5 million (automatic conversion).
Warrants:		10% Warrant coverage. The exercise price of the Warrants will be the higher of $0.75 or current market price + 50%. The term of the Warrants will be four years. Piggyback registration rights and no cashless exercise provision.
Investors:		Private and Institutional.

EX-10.2 3 a07-29905_1ex10d2.htm EX-10.2

EXHIBIT 10.2

BIOJECT MEDICAL TECHNOLOGIES INC.

CONVERTIBLE NOTE PURCHASE AND WARRANT AGREEMENT

This Convertible Note Purchase and Warrant Agreement (the “Agreement”) is made as of November 19, 2007, by and between Bioject Medical Technologies Inc., an Oregon corporation (the “Company”), and Edward Flynn (“Purchaser”).

RECITALS

The Company desires to issue and sell and the Purchaser desires to purchase a convertible subordinated promissory note in substantially the form attached to this Agreement as Exhibit A (the “Notes”), which shall be convertible on the terms stated therein into stock of the Company. Purchasers shall also receive a warrant to purchase additional shares of the Company pursuant to the form of warrant attached hereto as Exhibit B. The Note, the equity securities issuable upon conversion thereof (and any securities issuable upon conversion of such equity securities), the warrant and the equity securities issued upon the Purchaser’s exercise of the warrant are collectively referred to herein as the “Securities.” Terms not otherwise defined in this Agreement shall have the meaning given to them in the Note attached hereto as Exhibit A.

AGREEMENT

In consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Agreement agree as follows:

1. Purchase and Sale of Notes and Warrants.

(a) Sale and Issuance of Notes. Subject to the terms and conditions of this Agreement, each Purchaser agrees to purchase at the Closing and the Company agrees to sell and issue to Purchaser a Note in the principal amount of $500,000. The purchase price of each Note shall be equal to 100% of the principal amount of such Note. The Note shall be convertible into equity securities of the Company as provided for under the Note, and the Warrant shall be exercisable for equity securities of the Company as provided for under the Warrant.

(b) Warrants. Upon the Closing (as defined in Section 1(c) below), Purchaser shall receive a warrant to purchase 66,667 shares of the Company’s common stock in the form attached hereto as Exhibit B (the “Warrant”). The exercise price of the Warrant (“Exercise Price”) shall be the $0.75 per share price, subject to adjustment as set forth in the Warrant.

(i) The initial purchase and sale of the Notes shall take place at the offices of the Company, 20245 S.W. 95th Ave., Tualatin, OR 97062, at 1:00 p.m., on November 19, 2007 (the “Closing”). At Closing, the Company shall deliver to Purchaser the Note to be purchased by Purchaser against payment of the purchase price therefor by personal check (acceptance by the Company is subject to receipt of readily available funds) cashier’s check or by wire transfer to the Company’s bank account and the duly executed Warrant and the parties shall execute and deliver the Registration Rights Agreement in the form attached hereto as Exhibit C (the “Registration Rights Agreement”).

2. Stock Purchase Agreement.

(a) Purchaser understands and agrees that the conversion of the Note into equity securities of the Company may require such Purchaser’s execution of certain agreements (in form reasonably agreeable to a majority in interest of the Purchasers) relating to the purchase and sale of such securities as well as registration, information and voting rights, if any, relating to such equity securities.

(b) Purchaser agrees to be bound by the agreements described in Section 2(a).

3. Representations and Warranties of the Company. The Company hereby represents and warrants to each Purchaser that:

(a) Organization. The Company is a corporation duly organized and validly existing under the laws of the State of Oregon and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted.

(b) Authorization. All corporate action on the part of the Company, its officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement and the authorization, sale, issuance and delivery of the Note, the Warrant, the Registration Rights Agreement, the shares of the Company’s capital stock issuable on conversion or exercise thereunder, and the performance of all obligations of the Company hereunder and thereunder, has been taken or will be taken prior to the Closing. The shares of Common Stock issuable upon exercise of the Warrant and pursuant to Section 4.1.1 of the Note, upon issuance in accordance with the terms of the Warrant or Note, as applicable, will be duly and validly issued, fully paid, and nonassessable. The Agreement, the Registration Rights Agreement, the Note and the Warrant, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors’ rights generally, as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

(c) Governmental Consents. All consents, approvals, orders or authorizations of, or registrations, qualifications, designations, declarations or filings with, any governmental authority, required on the part of the Company in connection with the valid execution and delivery of this Agreement, the Registration Rights Agreement, the offer, sale or issuance of the Note, the Warrant, conversion of the Note, exercise of the Warrant or the consummation of any other transaction contemplated hereby shall have been obtained and will be effective at the Closing, except for notices required or permitted to be filed with certain state and federal securities commissions, which notices will be filed on a timely basis.

(d) Offering. Assuming the accuracy of the representations and warranties of the Purchasers contained in Section 4 hereof, the offer, issue and sale of the Notes and the Warrant are and will be exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the “Securities Act”), and have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws.

(e) SEC Documents; Financial Statements. As of the Closing, the Company shall have filed all reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission (“SEC”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to the Purchaser which is not included in the SEC Documents contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were made, not misleading.

4. Representations and Warranties of the Purchaser. Purchaser hereby represents and warrants to the Company that:

(a) Authorization. The Purchaser has the full right, power and authority to enter into and perform the Purchaser’s obligations under this Agreement, and this Agreement when executed and delivered by the Purchaser will constitute valid and binding obligations of the Purchaser, enforceable in accordance with their respective terms, subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors, rules of law governing specific performance, injunctive relief or other equitable remedies.

(b) Purchase Entirely for Own Account. The Securities to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. The Purchaser is not an entity formed for the specific purpose of acquiring any of the Securities.

(c) Knowledge. The Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. The Purchaser has had the opportunity to ask questions of the Company concerning the Company’s business and any related matter, and has received answer to his or her satisfaction.

(d) Restricted Securities. The Purchaser understands that the Securities have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser understands that the Securities are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the Securities indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.

(e) Legends. The Purchaser understands that the Securities, and any securities issued in respect thereof or exchange therefor, may bear one or all of the following legends:

(i) “THIS NOTE, AND THE SECURITIES ISSUABLE PURSUANT TO A CONVERSION OF THIS NOTE, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THIS NOTE, AND THE SECURITIES ISSUABLE PURSUANT TO A CONVERSION OF THIS NOTE, HAVE BEEN ACQUIRED WITHOUT A VIEW TO DISTRIBUTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THIS NOTE, OR FOR THE SECURITIES ISSUABLE PURSUANT TO A CONVERSION OF THIS NOTE, AS THE CASE MAY BE, UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL FOR THE HOLDER (CONCURRED IN BY LEGAL COUNSEL FOR THE CORPORATION) THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER”

(ii) “THIS WARRANT, AND THE SECURITIES ISSUABLE PURSUANT TO AN EXERCISE OF THIS WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THIS WARRANT, AND THE SECURITIES ISSUABLE PURSUANT TO AN EXERCISE OF THIS WARRANT, HAVE BEEN ACQUIRED WITHOUT A VIEW TO DISTRIBUTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THIS WARRANT, OR FOR THE SECURITIES ISSUABLE PURSUANT TO AN EXERCISE OF THIS WARRANT, AS THE CASE MAY BE, UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL FOR THE HOLDER (CONCURRED IN BY LEGAL COUNSEL FOR THE CORPORATION) THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER”

(iii) Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended.

(f) Accredited Investor. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act because the undersigned is either (i) a natural person whose individual net worth, or joint net worth with his or her spouse, exceeds $1,000,000 as of the date of this Agreement, (ii) a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with his or her spouse in excess or $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year, or (c) a director or executive officer of the Company. Purchaser is in a financial position to hold the Securities and is able to bear the economic risk and withstand a complete loss of Purchaser’s investment in the Securities.

5. Conditions of the Purchaser’s Obligations at Closing. The obligations of Purchaser to the Company under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

(a) Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing.

(b) Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be obtained and effective as of the Closing.

(c) Board Appointment. The Board of Directors of the Company shall have appointed Purchaser a director effective at the Closing.

6. Conditions of the Company’s Obligations at Closing. The obligations of the Company to Purchaser under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

(a) Representations and Warranties. The representations and warranties of each Purchaser contained in Section 4 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing.

(c) Payment of Principal Amount. Purchaser shall have paid by check or wire transfer of immediately available funds the principal amount set forth on the signature page of this Agreement.

7. Miscellaneous.

(a) Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

(b) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Oregon, without giving effect to principles of conflicts of law. The parties agree that the state or federal courts located in the State of Oregon constitute the sole and exclusive venue, and the exclusive jurisdiction, for disputes arising under or with respect to this Agreement.

(c) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(d) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(e) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth below or as subsequently modified by written notice.

(f) Finder’s Fee. Except as may otherwise be specifically agreed to by the parties, each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. Each Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which each Purchaser or any of its officers, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

(g) Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company and the holders of at least a majority of the outstanding principal amount of the Notes. Any amendment or waiver effected in accordance with this Section 7(g) shall be binding upon the Purchasers and each transferee of the Securities, each future holder of all such Securities, and the Company.

(h) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law or in violation of any law, exchange rule or regulation to which the Company is subject, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(i) Entire Agreement. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and any and all other written or oral agreements existing between the parties hereto are expressly canceled.

(j) Board Nomination. For so long as Purchaser is the beneficial owner of at least 1 million shares of the Company’s Common Stock (as adjusted for splits, stock dividends and the like), Purchase shall be entitled to nominate one person for election as a director at each meeting of shareholders at which the term of Purchaser’s designee as a director expires. If a nominee ceases to be a director prior to the expiration of his term, Purchaser shall have the right to nominate such person’s successor and the Board of Directors shall appoint such person as a director. Notwithstanding anything in this Section 7(j) to the contrary, the obligations of the Company under this section shall not apply if the Board of Directors concludes upon the advice of counsel that such nomination or appointment would violate its fiduciary duties or any law, regulation or exchange rule to which the Company is subject.

(k) Most Favored Terms. The Note is intended to be one of a series of convertible promissory notes of like tenor to be issued by the Company prior to March 31, 2008 in an aggregate principal amount not to exceed $1.5 million (collectively, the “Bridge Notes”). If any subsequent purchaser of a Bridge Note receives terms for such note or the related warrant (including the percentage of warrant coverage) that are superior to those contained in the Note and the Warrant, then the Company shall amend the Note or Warrant, as applicable, to provide purchaser with the same terms.

[Signature Page Follows]

The parties have executed this Convertible Note Purchase and Warrant Agreement as of the date first written above.

COMPANY:

BIOJECT MEDICAL TECHNOLOGIES INC.

By:	/s/ Ralph Makar
Name:			Ralph Makar
			(print)
Title:		President and CEO
Address:

Facsimile Number:


PURCHASER:

/s/ Edward L. Flynn
(Purchaser)

By:	/s/ Edward L. Flynn
Name:			Edward L. Flynn
			(print)
Title:
Address:

Facsimile Number:

Exhibits:

A – Form of Convertible Promissory Note

C – Form of Warrant

D – Form of Registration Rights Agreement

EX-10.3 4 a07-29905_1ex10d3.htm EX-10.3

EXHIBIT 10.3

BIOJECT MEDICAL TECHNOLOGIES INC.

FORM OF CONVERTIBLE NOTE PURCHASE AND WARRANT AGREEMENT

This Convertible Note Purchase and Warrant Agreement (the “Agreement”) is made as of [ ], 2007, by and between Bioject Medical Technologies Inc., an Oregon corporation (the “Company”), and (“Purchaser”).

RECITALS

AGREEMENT

In consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Agreement agree as follows:

1. Purchase and Sale of Notes and Warrants.

(a) Sale and Issuance of Notes. Subject to the terms and conditions of this Agreement, each Purchaser agrees to purchase at the Closing and the Company agrees to sell and issue to Purchaser a Note in the principal amount of $ . The purchase price of each Note shall be equal to 100% of the principal amount of such Note. The Note shall be convertible into equity securities of the Company as provided for under the Note, and the Warrant shall be exercisable for equity securities of the Company as provided for under the Warrant.

(b) Warrants. Upon the Closing (as defined in Section 1(c) below), Purchaser shall receive a warrant to purchase shares of the Company’s common stock in the form attached hereto as Exhibit B (the “Warrant”). The exercise price of the Warrant (“Exercise Price”) shall be the $0.75 per share price, subject to adjustment as set forth in the Warrant.

(i) The initial purchase and sale of the Notes shall take place at the offices of the Company, 20245 S.W. 95th Ave., Tualatin, OR 97062, at 1:00 p.m., on November , 2007 (the “Closing”). At Closing, the Company shall deliver to Purchaser the Note to be purchased by Purchaser against payment of the purchase price therefor by personal check (acceptance by the Company is subject to receipt of readily available funds) cashier’s check or by wire transfer to the Company’s bank account and the duly executed Warrant and the parties shall execute and deliver the Registration Rights Agreement in the form attached hereto as Exhibit C (the “Registration Rights Agreement”).

2. Stock Purchase Agreement.

(b) Purchaser agrees to be bound by the agreements described in Section 2(a).

3. Representations and Warranties of the Company. The Company hereby represents and warrants to each Purchaser that:

omits to state any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were made, not misleading.

4. Representations and Warranties of the Purchaser. Purchaser hereby represents and warrants to the Company that:

(e) Legends. The Purchaser understands that the Securities, and any securities issued in respect thereof or exchange therefor, may bear one or all of the following legends:

UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL FOR THE HOLDER (CONCURRED IN BY LEGAL COUNSEL FOR THE CORPORATION) THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER”

(iii) Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended.

(c) Payment of Principal Amount. Purchaser shall have paid by check or wire transfer of immediately available funds the principal amount set forth on the signature page of this Agreement.

7. Miscellaneous.

federal courts located in the State of Oregon constitute the sole and exclusive venue, and the exclusive jurisdiction, for disputes arising under or with respect to this Agreement.

(c) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(d) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(j) Most Favored Terms. The Note is intended to be one of a series of convertible promissory notes of like tenor to be issued by the Company prior to March 31, 2008 in an aggregate principal amount not to exceed $1.5 million (collectively, the “Bridge Notes”). If any subsequent purchaser of a Bridge Note receives terms for such note or the related warrant (including the percentage of warrant coverage) that are superior to those contained in the Note and the Warrant, then the Company shall amend the Note or Warrant, as applicable, to provide purchaser with the same terms.

[Signature Page Follows]

The parties have executed this Convertible Note Purchase and Warrant Agreement as of the date first written above.

	COMPANY:

	BIOJECT MEDICAL TECHNOLOGIES INC.

	By:
	Name:
	(print)
	Title:
	Address:

	Facsimile Number:




	PURCHASER:


	(Purchaser)

	By:
	Name:
	(print)
	Title:
	Address:

	Facsimile Number:

Exhibits:

A — Form of Convertible Promissory Note

C — Form of Warrant

D — Form of Registration Rights Agreement

EX-10.4 5 a07-29905_1ex10d4.htm EX-10.4

EXHIBIT 10.4

FORM OF WARRANT

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON ITS EXERCISE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS (I) PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR (II) IN COMPLIANCE WITH AN EXEMPTION THEREFROM AND ACCOMPANIED, IF REQUESTED BY BIOJECT MEDICAL TECHNOLOGIES INC., WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH AN EXEMPTION THEREFROM.

Warrant No. II-		Number of Shares:
		(subject to adjustment)
Date of Issuance: November , 2007

WARRANT

TO PURCHASE COMMON STOCK OF

BIOJECT MEDICAL TECHNOLOGIES INC.

EXPIRING ON NOVEMBER 15, 2011

THIS IS TO CERTIFY THAT, for value received, , a (the “Registered Holder”), or its permitted assigns, is entitled to purchase from BIOJECT MEDICAL TECHNOLOGIES INC., an Oregon corporation (the “Company”), at the place where the Warrant Office designated pursuant to Section 2.1 is located, at a purchase price per share of $0.75 (as adjusted pursuant to the terms of this Warrant, the “Exercise Price”), shares of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock, no par value per share (“Common Stock”), of the Company, and is entitled also to exercise the other appurtenant rights, powers and privileges hereinafter set forth. The number of shares of the Common Stock purchasable hereunder and the Exercise Price are subject to adjustment in accordance with Article III hereof. This Warrant shall expire at 5:00 p.m., New York time, on November , 2011.

Certain Terms used in this Warrant are defined in Article IV.

ARTICLE I

EXERCISE OF WARRANT

1.1 Method of Exercise. This Warrant may be exercised by the Registered Holder as a whole or in part from time to time until November , 2011, at which time this Warrant shall expire and be of no further force or effect; provided, however, that the minimum number of Warrant Shares that may be purchased on a single exercise shall be the entire number of shares remaining available for exercise hereunder. To exercise this Warrant, the Registered Holder or permitted assignees of all rights of the Registered Holder shall deliver to the Company, at the Warrant Office designated in Section 2.1(a), a written notice in the form of the Purchase Form attached as Exhibit A hereto, stating therein the election of the Registered Holder or such permitted assignees of the Registered Holder to exercise this Warrant in the manner provided in the Purchase Form, (b) payment in full of the Exercise Price (in the manner described below) for all Warrant Shares purchased hereunder, and (c) this Warrant. Subject to compliance with Section 3.1(a)(vii), this Warrant shall be deemed to be exercised on the date of receipt by the Company of the Purchase Form, accompanied by payment for the Warrant Shares to be purchased and surrender of this Warrant, as aforesaid, and such date is referred to herein as the “Exercise Date.” Upon such exercise (subject as aforesaid), the Company shall issue and deliver to the Registered Holder a certificate for the full number of the Warrant Shares

purchasable by the Registered Holder hereunder, against the receipt by the Company of the total Exercise Price payable hereunder for all such Warrant Shares, in cash or by certified or cashier’s check. The Person in whose name the certificate(s) for Common Stock is to be issued shall be deemed to have become a holder of record of such Common Stock on the Exercise Date.

1.2 Fractional Shares. No fractional shares of Common Stock shall be issued upon exercise of this Warrant. Instead of any fractional shares of Common Stock that would otherwise be issuable upon exercise of this Warrant, the Company shall pay a cash adjustment in respect of such fractional interest equal to the fair market value of such fractional interest as determined in good faith by the Board of Directors.

1.3 Purchase of Warrants by the Company. The Company shall have the right, except as limited by law, other agreement, or herein, to purchase or otherwise acquire Warrants at such time, in such manner, and for such consideration as it may deem appropriate.

1.4 Cancellation of Warrants. In the event the Company shall purchase or otherwise acquire the Warrants, the same shall thereupon be cancelled by it and retired.

ARTICLE II

WARRANT OFFICE; TRANSFER

2.1 Warrant Office. The Company shall maintain an office for certain purposes specified herein (the “Warrant Office”), which office shall initially be the Company’s office at 20245 S.W. 95th Avenue, Tualatin, Oregon 97062, and may subsequently be such other office of the Company or of any transfer agent of the Common Stock in the continental United States of which written notice has previously been given to the Registered Holder. The Company shall maintain, at the Warrant Office, a register for the Warrant in which the Company shall record the name and address of the Registered Holder, as well as the name and address of each permitted assignee of the rights of the Registered Holder.

2.2 Ownership of Warrant. The Company may deem and treat the Registered Holder as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary, until presentation of this Warrant for registration of transfer as provided in this Article II.

2.3 Transfer of Warrants. The Company agrees to maintain at the Warrant Office books for the registration and transfer of this Warrant. Subject to the restrictions on transfer of Warrants in Section 2.8, the Company, from time to time, shall register the transfer of this Warrant in such books upon surrender of this Warrant at the Warrant Office, properly endorsed, together with a written assignment of this Warrant, substantially in the form of the Assignment attached as Exhibit B hereto. Upon any such transfer, a new Warrant shall be issued to the transferee, and the Company shall cancel the surrendered Warrant. The Registered Holder shall pay all taxes and all other expenses and charges payable in connection with the transfer of Warrants pursuant to this Section 2.3.

2.4 Acknowledgement of Rights. The Company will, at the time of exercise of this Warrant in accordance with the terms hereof, upon request of the Registered Holder, acknowledge in writing its continuing obligation to afford to such holder any rights to which such holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant, provided that if the holder of this Warrant shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such holder any such rights.

2.5 No Rights as Shareholder Until Exercise. This Warrant does not entitle the Registered Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be deemed to be issued to the Registered Holder as the record owner of such shares as of the close of business on the Exercise Date.

2.6 Expenses of Delivery of Warrants. Except as provided in Section 2.3 above, the Company shall pay all reasonable expenses, taxes (other than transfer taxes), and other charges payable in connection with the preparation, issuance and delivery of Warrants and related Warrant Shares hereunder.

2.7 Compliance with Securities Laws. The Registered Holder (and its transferees and assigns), by acceptance of this Warrant, covenants and agrees that such Registered Holder is acquiring the Warrants evidenced hereby, and, upon exercise hereof, the Warrant Shares, for its own account as an investment and not with a view to distribution thereof. Neither this Warrant nor the Warrant Shares issuable hereunder have been registered under the Securities Act or any state securities laws and no transfer of this Warrant or any Warrant Shares shall be permitted unless the Company has received notice of such transfer in the form of the assignment attached hereto as Exhibit B, accompanied, if requested by the Company, by an opinion of counsel reasonably satisfactory to the Company that an exemption from registration of such Warrant or Warrant Shares under the Securities Act is available for such transfer, except that no such opinion shall be required with respect to the Warrant Shares after the registration for resale of the Warrant Shares has become effective if the Warrant Shares are sold pursuant to the registration statement. Upon any exercise of the Warrants prior to effective registration for resale or except as in accordance with Rule 144 under the Securities Act, certificates representing the Warrant Shares shall bear a restrictive legend substantially identical to that set forth as follows:

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state (collectively, the “Acts”). Neither the shares nor any interest therein may be offered, sold, transferred, pledged, or otherwise disposed of in the absence of an effective registration statement with respect to the shares under all of the applicable Acts, or an opinion of counsel satisfactory to Bioject Medical Technologies Inc. to the effect that such registrations are not required.”

(c) Any purported transfer of the Warrant or Warrant Shares not in compliance with the provisions of this section shall be null and void. Stop transfer instructions have been or will be imposed with respect to the Warrant Shares so as to restrict resale or other transfer thereof, subject to this Section 2.7.

ARTICLE III

ANTI-DILUTION PROVISIONS

3.1 Adjustment of Exercise Price and Number of Warrant Shares. The Exercise Price shall be subject to adjustment from time to time as hereinafter provided in this Article III. Upon each adjustment of the Exercise Price, except pursuant to Sections 3.1(a)(iii) and (iv), the Registered Holder shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares of the Common Stock obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of the Common Stock purchasable pursuant hereto immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment.

(a) Exercise Price Adjustments. The Exercise Price shall be subject to adjustment from time to time as follows:

(i) Adjustment for Stock Splits and Combinations. If the Company shall, at any time or from time to time after the date hereof (the “Original Issue Date”) while this Warrant remains outstanding, effect a subdivision of the outstanding Common Stock, the Exercise Price in effect immediately before such subdivision shall be proportionately decreased. Conversely, if the Company shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately before such combination shall be proportionately increased. Any adjustment under this Section 3.1(a)(i) shall become effective at the close of business on the date the subdivision or combination becomes effective.

(ii) Adjustment for Common Stock Dividends and Distributions. If the Company, at any time or from time to time after the Original Issue Date while this Warrant remains outstanding makes, or fixes a

record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, in each such event the Exercise Price that is then in effect shall be decreased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, by multiplying the Exercise Price then in effect by a fraction (i) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (ii) the denominator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Exercise Price shall be recomputed accordingly as of the close of business on such record date, and thereafter the Exercise Price shall be adjusted pursuant to this Section 3.1(a)(ii) to reflect the actual payment of such dividend or distribution.

(iii) Adjustment for Reclassification, Exchange, and Substitution. If at any time or from time to time after the Original Issue Date while this Warrant remains outstanding, the Common Stock is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification, or otherwise (other than an Acquisition, Asset Transfer, subdivision or combination of shares, stock dividend, reorganization, merger, consolidation, or sale of assets provided for elsewhere in this Section 3.1(a)), in any such event the Registered Holder shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of shares of Common Stock into which such shares of Common Stock could have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof.

(iv) Reorganizations, Mergers, Consolidations, or Sales of Assets. If at any time or from time to time after the Original Issue Date while this Warrant remains outstanding, there is a capital reorganization of the Company, an Acquisition, an Asset Transfer (other than a recapitalization, or subdivision, combination, reclassification, exchange, or substitution of shares provided for elsewhere in this Section 3.1(a)), as a part of such capital reorganization, Acquisition, or Asset Transfer, provision shall be made so that the Registered Holder shall thereafter be entitled to receive upon exercise hereof the number of shares of stock or other securities or property to which a holder of the number of shares of Common Stock deliverable upon exercise immediately prior to such event would have been entitled as a result of such capital reorganization, subject to adjustment in respect of such stock or securities by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 3.1(a) with respect to the rights of the Registered Holder after the capital reorganization, Acquisition, or Asset Transfer to the end that the provisions of this Section 3.1(a) (including adjustment of the Exercise Price then in effect and the number of shares issuable upon exercise) shall be applicable after that event and be as nearly equivalent as practicable.

(v) Distributions of Securities. In case of any distribution of any security (including rights or warrants to subscribe for any such securities) of the Company (except Common Stock), evidences of its indebtedness, cash, or other assets to all of the holders of its Common Stock, then in each such case the Exercise Price in effect thereafter shall be determined by multiplying the Exercise Price in effect immediately prior thereto by a fraction, the numerator of which shall be the total number of outstanding shares of Common Stock multiplied by the Current Market Price on the record date mentioned below, less the fair market value (as determined in good faith by the Board of Directors) of the securities, evidences of indebtedness, cash, or other assets distributed by the Company, and the denominator of which shall be the total number of outstanding shares of Common Stock multiplied by the Current Market Price; such adjustment shall become effective as of the record date for the determination of shareholders entitled to receive such distribution. The subdivision or combination of shares of Common Stock issuable upon exercise of this Warrant at any time outstanding into a greater or lesser number of shares of Common Stock shall not be deemed to be a reclassification of the Common Stock of the Company of this clause (v).

(vi) Rounding of Calculations; Minimum Adjustment. All calculations under this Section 3.1(a) and under Section 3.1(b) shall be made to the nearest cent. Any provision of this Section 3.1 to the contrary notwithstanding, no adjustment in the Exercise Price shall be made if the amount of such adjustment would be less than one percent, but any such amount shall be carried forward and an adjustment with respect thereto shall

be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate one percent or more.

(vii) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any case in which the provisions of this Section 3.1(a) shall require that an adjustment shall become effective immediately after a record date for an event, the Company may defer until the occurrence of such event issuing to the Registered Holder after such record date and before the occurrence of such event the additional shares of Common Stock or other property issuable or deliverable upon exercise by reason of the adjustment required by such event over and above the shares of Common Stock or other property issuable or deliverable upon such exercise before giving effect to such adjustment; provided, however, that the Company upon request shall deliver to such Registered Holder a due bill or other appropriate instrument evidencing such Registered Holder’s right to receive such additional shares or other property, and such cash, upon the occurrence of the event requiring such adjustment.

(viii) Voluntary Adjustment by the Company. The Company may at any time during the term of this Warrant, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors, in its sole discretion.

(b) Statement Regarding Adjustments. Whenever the Exercise Price shall be adjusted as provided in Section 3.1(a), and upon each change in the number of shares of the Common Stock issuable upon exercise of this Warrant, the Company shall forthwith file, at the office of any transfer agent for this Warrant and at the principal office of the Company, a statement showing in detail the facts requiring such adjustment and the Exercise Price and new number of shares issuable that shall be in effect after such adjustment, and the Company shall also cause a copy of such statement to be given to the Registered Holder. Each such statement shall be signed by the Company’s chief financial or accounting officer. Where appropriate, such copy may be given in advance and may be included as part of a notice required to be mailed under the provisions of Section 3.1(c).

(c) Notice to Holders. In the event the Company shall propose to take any action of the type described in clause (iii) or (iv) of Section 3.1(a), the Company shall give notice to the Registered Holder, in the manner set forth in Section 6.6, which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Exercise Price and the number, kind or class of shares or other securities or property which shall be deliverable upon exercise of this Warrant. In the case of any action which would require the fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed, and in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action.

3.2 Costs. The Registered Holder shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of the Warrant Shares upon exercise of this Warrant. Additionally, the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such Warrant Shares. The Registered Holder shall reimburse the Company for any such taxes assessed against the Company.

3.3 Reservations of Shares. The Company shall reserve at all times so long as this Warrant remains outstanding, free from preemptive rights, out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the exercise of this Warrant, sufficient shares of Common Stock to provide for the exercise hereof.

3.4 Valid Issuance. All shares of Common Stock which may be issued upon exercise of this Warrant will upon issuance by the Company be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof attributable to any act or omission by the Company, and the Company shall take no action which will cause a contrary result (including without limitation, any action which would cause the Exercise Price to be less than the par value, if any, of the Common Stock).

ARTICLE IV

TERMS DEFINED

As used in this Warrant, unless the context otherwise requires, the following terms have the respective meanings set forth below or in the Section indicated:

Acquisition means the acquisition of the Company by another person or entity or group of affiliated persons or entities by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger, or consolidation but excluding any merger effected exclusively for the purpose of changing the domicile of the Company) that results in the transfer of more than 50% of the outstanding voting power of the Company.

Asset Transfer means the sale, lease, or other transfer of all or substantially all of the assets of the Corporation

Board of Directors means the Board of Directors of the Company.

Common Stock means the Company’s authorized Common Stock, no par value per share.

Company means Bioject Medical Technologies Inc., an Oregon corporation, and any other corporation assuming or required to assume the obligations undertaken in connection with this Warrant.

Current Market Price means the arithmetic average of the closing price per share of the Common Stock on the Principal Market for the 20 consecutive Trading Days ending on and including the Trading Day immediately prior to the date in question. If the Current Market Price cannot be determined under the foregoing method, the Current Market Price shall mean the fair value per share of Common Stock on such date as determined by the Board of Directors in good faith, irrespective of any accounting treatment.

Exchange Act means the Securities and Exchange Act of 1934, as amended.

Exercise Date is defined in Section 1.1.

Exercise Price is defined in the Preamble.

Majority Holders means at any time Registered Holders of Warrant Shares which shares constitute a majority of the outstanding Warrant Shares.

Original Issue Date is defined in Section 3.1(a)(i).

Outstanding means when used with reference to Common Stock at any date, all issued shares of Common Stock (including, but without duplication, shares deemed issued pursuant to Article III) at such date.

Person means any individual, corporation, partnership, trust, organization, association or other entity.

Principal Market means whichever of (a) the national securities exchange, (b) the Nasdaq Capital Market, or (c) such other securities market on which the Common Stock is listed for trading which at such time constitutes the principal securities market for the Common Stock.

Registered Holder is defined in the Preamble.

Securities Act means the Securities Act of 1933 and the rules and regulations promulgated thereunder, all as the same shall be in effect at the time.

Trading Day means a day on whichever of (a) the national securities exchange, (b) the Nasdaq Capital Market, or (c) such other securities markets, in any case which at the time constitutes the Principal Market for the Common Stock, is open for general trading of securities.

Warrant means this Warrant and any successor or replacement Warrant delivered in accordance with Section 2.3 or 6.8.

Warrant Office is defined in Section 2.1.

Warrant Shares means the shares of Common Stock purchased or purchasable by the Registered Holder, or the permitted assignees of such Registered Holder, upon exercise of this Warrant pursuant to Article I hereof.

ARTICLE V

COVENANT OF THE COMPANY

The Company covenants and agrees that this Warrant shall be binding upon any corporation succeeding to the Company by merger, consolidation, or acquisition of all or substantially all of the Company’s assets.

ARTICLE VI

MISCELLANEOUS

6.1 Entire Agreement. This Warrant and the Registration Rights Agreement contain the entire agreement between the Registered Holder and the Company with respect to the Warrant Shares that it can purchase upon exercise hereof and the related transactions and supersedes all prior arrangements or understanding with respect thereto.

6.2 Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Oregon, without regard to its conflict of law provisions.

6.3 Waiver and Amendment. Any term or provision of this Warrant may be waived at any time by the party which is entitled to the benefits thereof, and any term or provision of this Warrant may be amended or supplemented at any time by written consent of the parties (it being agreed that an amendment to or waiver under any of the provisions of Article III of this Warrant shall not be considered an amendment of the number of Warrant Shares or the Exercise Price). No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising because of any prior or subsequent such occurrence.

6.4 Illegality. In the event that any one or more of the provisions contained in this Warrant shall be determined to be invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in any other respect and the remaining provisions of this Warrant shall not, at the election of the party for whom the benefit of the provision exists, be in any way impaired.

6.5 Copy of Warrant. A copy of this Warrant shall be filed among the records of the Company.

6.6 Notice. Any notice or other document required or permitted to be given or delivered to the Registered Holder shall be delivered at, or sent by certified or registered mail to such Registered Holder at, the last address shown on the books of the Company maintained at the Warrant Office for the registration of this Warrant or at any more recent address of which the Registered Holder shall have notified the Company in writing. Any notice or other document required or permitted to be given or delivered to the Company, other than such notice or documents required to be delivered to the Warrant Office, shall be delivered at, or sent by certified or registered mail to, the office of the Company at 20245 S.W. 95th Avenue, Tualatin, Oregon 97062 or any other address within the continental United States of America as shall have been designated in writing by the Company delivered to the Registered Holder.

6.7 Limitation of Liability; Not Stockholders. Subject to the provisions of Article III, until the exercise of this Warrant, the Registered Holder shall not have or exercise any rights by virtue hereof as a stockholder of the Company, including, without limitation, the right to vote, to receive dividends and other distributions, or to receive notice of, or attend meetings of stockholders or any other proceedings of the Company. Until the exercise of this Warrant, no provision hereof, and no mere enumeration herein of the rights or privileges of the Registered Holder, shall give rise to any liability of such Registered Holder for the purchase price of any shares of Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

6.8 Exchange, Loss, Destruction, etc. of Warrant. Upon receipt of evidence satisfactory to the Company (an affidavit of the Registered Holder shall be satisfactory evidence) of the loss, theft, mutilation or destruction of this Warrant, and, in the case of any such loss, theft or destruction, upon delivery of a bond of indemnity in such form and amount as shall be reasonably satisfactory to the Company, or, in the event of such mutilation upon surrender and cancellation of this Warrant, the Company will make and deliver a new Warrant of like tenor, in lieu of such lost, stolen, destroyed or mutilated Warrant; provided, however, that the original Registered Holder of this Warrant shall not be required to provide any such bond of indemnity and may in lieu thereof provide his agreement of indemnity. Any Warrant issued under the provisions of this Section 6.8 in lieu of any Warrant alleged to be lost, destroyed or stolen, or in lieu of any mutilated Warrant, shall constitute an original contractual obligation on the part of the Company. This Warrant shall be promptly canceled by the Company upon the surrender hereof in connection with any exchange or replacement. The Registered Holder of this Warrant shall pay all taxes (including securities transfer taxes) and all other expenses and charges payable in connection with the preparation, execution and delivery of replacement Warrant(s) pursuant to this Section 6.8.

6.9 Headings. The Article and Section and other headings herein are for convenience only and are not a part of this Warrant and shall not affect the interpretation thereof.

6.10 Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Registered Holder. The provisions of this Warrant are intended to be for the benefit of all Registered Holders from time to time of this Warrant and shall be enforceable by any such Registered Holder or holder of Warrant Shares.

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its name.

Dated: November , 2007

	BIOJECT MEDICAL TECHNOLOGIES INC.

	By
	Name:
	Title:

Exhibit A

PURCHASE FORM

To:	Bioject Medical Technologies Inc.	Dated: , 20
	20245 S.W. 95th Avenue
	Tualatin, Oregon 97062

The undersigned, pursuant to the provisions set forth in the attached Warrant (No. ), hereby irrevocably elects to purchase shares of the Common Stock covered by such Warrant.

The undersigned herewith makes payment of the full exercise price for such shares at the price per share provided for in such Warrant, which is $ per share in lawful money of the United States.


[		]




	Name:
	Title:

Exhibit B

ASSIGNMENT

For value received, , hereby sells, assigns and transfers unto the within Warrant, together with all right, title and interest therein and does hereby irrevocably constitute and appoint attorney, to transfer said Warrant on the books of the Company, with full power of substitution.



Dated: , 20

EX-10.5 6 a07-29905_1ex10d5.htm EX-10.5

EXHIBIT 10.5

THIS NOTE, AND THE SECURITIES ISSUABLE PURSUANT TO A CONVERSION OF THIS NOTE, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THIS NOTE, AND THE SECURITIES ISSUABLE PURSUANT TO A CONVERSION OF THIS NOTE, HAVE BEEN ACQUIRED WITHOUT A VIEW TO DISTRIBUTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THIS NOTE, OR FOR THE SECURITIES ISSUABLE PURSUANT TO A CONVERSION OF THIS NOTE, AS THE CASE MAY BE, UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL FOR THE HOLDER (CONCURRED IN BY LEGAL COUNSEL FOR THE CORPORATION) THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER

Form of Convertible Subordinated Promissory Note

$ ; Tualatin, Oregon

As of , 2007

For value received, Bioject Medical Technologies Inc., an Oregon corporation (the “Company”), promises to pay to (the “Holder”) the principal sum of dollars ($ ), together with interest thereon as set forth herein (this “Note”).

The following is a statement of the rights of the Holder and the conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, agrees:

1. Payment Terms. The unpaid principal balance from time to time outstanding under this Note shall bear interest at the rate of 8% per annum. The outstanding principal balance of and accrued but unpaid interest under this Note shall be repaid by the Company on or before , 2009 (the “Maturity Date”) unless prepaid pursuant to the terms hereof. Except as otherwise provided herein, both principal and interest shall be payable on the Maturity Date in lawful money of the United States of America to the Holder at its offices in (or at such other location as shall be designated by the Holder in a written notice to the Company), in same day funds.

2. Events of Default. If any of the events specified in this Section 2 shall occur (herein individually referred to as an “Event of Default”), the Holder of the Note may, so long as such condition exists, declare the entire principal and unpaid accrued interest hereon immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived:

(a) Default in the payment of the principal and unpaid accrued interest of this Note when due and payable if such default is not cured by the Company within ten (10) business days after the Holder has given the Company written notice of such default; or

(b) Any breach by the Company of any representation, warranty, or covenant in this Note; provided, that, in the event of any such breach, to the extent such breach is susceptible to cure, such breach shall not have been cured by the Company within ten (10) business days after written notice to the Company of such breach; or

(c) The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) make a general assignment for the

benefit of its or any of its creditors, (iii) be dissolved or liquidated in full or in part, (iv) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it or (v) take any action for the purpose of effecting any of the foregoing; or

(d) Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered, or such case or proceeding shall not be dismissed, discharged or stayed within 60 days of commencement.

Notwithstanding anything to the contrary contained herein, if any of the events described in Sections 2(c) or (d) occur, this Note shall be automatically accelerated and the entire principal and unpaid accrued interest thereon shall immediately become due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived.

3. Prepayment. Prior to the Maturity Date, this Note may not be prepaid except with the written consent of Holder.

4. Conversion.

4.1 Voluntary and Automatic Conversion.

4.1.1 Holder, at his sole option and upon giving written notice to the Company, may at any time prior to the payment of this Note in full, convert the outstanding principal and unpaid interest under this Note into the number of shares of the Company’s Common Stock equal to the sum of the outstanding principal balance of this Bridge Note plus all accrued and unpaid interest owing under this Bridge Note, divided by $0.75 (as adjusted for stock splits, stock dividends and the like in the same manner as the Exercise Price (as defined in the Warrant, dated the date hereof and issued to Holder) is adjusted pursuant to such Warrant)).

4.1.2 If a Qualified Financing is completed on or before the Maturity Date, the outstanding principal amount of this Note plus accrued and unpaid interest hereunder shall automatically convert into the securities issued in the Qualified Financing concurrently with the closing of the transaction on the Financing Date at a conversion price per share equal the Financing Price without any other action by Holder.

4.1.3 For purposes of this Section 4.1, the following terms shall have the definitions set forth below:

“Qualified Financing” means the offering by the Company of shares of equity securities, including units consisting of stock and warrants, resulting in the receipt of cash proceeds by the Company after the date hereof of at least Five Million Dollars ($5,000,000) in the aggregate (the “Minimum Proceeds”) on or prior to the Maturity Date (as defined herein). For purposes of this Note, Minimum Proceeds shall not be deemed to include the conversion of the principal amount of the Note and any other convertible promissory notes of the Company of like tenor to this Note in an aggregate principal amount not to exceed $1.5 million and accrued and unpaid interest thereon.

“Financing Date” means the date of the closing of the Qualified Financing pursuant to which the Company receives the Minimum Proceeds.

“Financing Price” shall mean the price per share or unit, as applicable, for the securities issued in the Qualified Financing.

4.2 Notice of Conversion Pursuant to Section 4.2. If this Note is converted pursuant to Section 4.1.1, written notice shall be given by the Holder of this Note to the Company at the place where the principal executive office of the Company is located, notifying the Company of Holder’s election to convert. If this Note is automatically converted pursuant to Section 4.1.2, written notice shall be delivered to the Holder of this Note at the address last shown on the records of the Company for the Holder or given by the Holder to the Company for the purpose of notice or, if no such address appears or is given, at the place where the principal executive office of the Company is located, notifying the Holder of the conversion, specifying the conversion price, the principal amount of the Note converted, the amount of accrued interest converted, the date of such conversion and calling upon such Holder to surrender to the Company, in the manner and at the place designated, the Note.

4.3 Delivery of Stock Certificates; Effect of Conversion. No fractional shares of preferred stock shall be issued upon conversion of this Note. Upon conversion of this Note into stock, in lieu of the Company issuing any fractional shares to the Holder, the Company shall pay to the Holder the amount of outstanding principal that is not so converted in cash. As promptly as practicable after the conversion of this Note, the Company at its expense will issue and deliver to the Holder of this Note a certificate or certificates for the number of shares of stock or units, as applicable, issuable upon such conversion (rounded down to the nearest whole number, such that no fractional shares shall be issued). Such certificate or certificates shall bear such legends as are required by applicable state and federal securities laws in the opinion of counsel to the Company. Upon conversion of this Note, the Company shall be forever released from all its obligations and liabilities under this Note.

4.4 Payment of Expenses and Taxes on Conversion. The Company shall pay all expenses, taxes (excluding income or franchise taxes) and other charges payable in connection with the preparation, execution, issuance and delivery of stock certificate(s) pursuant to this Section 4, except that, in the event such stock certificate(s) shall be registered in a name or names other than the name of the Holder, funds sufficient to pay all stock transfer fees, which shall be payable upon the execution and delivery of such stock certificate(s), shall be paid by the Holder hereof to the Company at the time of delivering this Note to the Company upon conversion.

5. Subordination. To induce one or more lenders to extend credit to the Company, and for the benefit of such lenders, Holder agrees, by its acceptance of this Note, for itself and for each future holder (if any) of this Note, that the obligations evidenced by this Note (the “Subordinated Obligations”) are expressly subordinate and junior in right of payment to all principal amounts of, and accrued interest on (including, without limitation, any interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of the Company), each loan agreement, bridge note, revolving credit note, term note and other indebtedness, obligation and liability of the Company under any agreement or contract with any Senior Creditor, the payment or performance of which is expressly secured by a security interest in all or substantially all of the assets of the Company (the “Senior Obligations”). For purposes of this note, “subordinate and junior in right of payment” shall mean that no part of the Subordinated Obligations shall have any claim to the Company’s assets on a parity with or prior to the claim of the Senior Obligations. From and after the date of receipt of notice from any Senior Creditor of any default with respect to any of the Senior Obligations, Holder shall not ask for, demand, sue for, take or receive any payments with respect to all or any part of the Subordinated Obligations or any security therefor, whether from the Company or any other source, unless and until the Senior Obligations have been paid in full. Holder further agrees that upon any distribution of money or assets, or readjustment of the indebtedness of the Company whether by reason of foreclosure, liquidation, composition, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding involving the Subordinated Obligations, or the application of the assets of the Company to the payment or liquidation thereof, the Senior Creditors shall be entitled to receive payment in full in cash of all of the Senior Obligations prior to the payment of any part of the Subordinated Obligations.

6. Assignment. The rights and obligations of the Company and the Holder of this Note shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

7. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.

8. Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile (provided that notice is also given under clause (c) below) if sent during normal business hours of the recipient; if not sent during normal business hours of the recipient, then on the next business day, or (c) upon receipt by the party to be notified by nationally recognized overnight courier service. All communications shall be sent to the party at the address as set forth herein or at such other address as such party may designate by ten (10) days advance written notice to the other party hereto.

9. Governing Law; Waiver of Jury Trial. This Note shall be governed by and construed in accordance with the laws of the state of Oregon, exclusive of conflicts of law provisions. IN THE EVENT OF ANY DISPUTE AMONG OR BETWEEN ANY OF THE PARTIES TO THIS NOTE ARISING OUT OF THE TERMS OF THIS NOTE, THE PARTIES HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS LOCATED IN THE COUNTY OF MULTNOMAH, STATE OF OREGON, OR THE UNITED STATES DISTRICT COURTS FOR THE DISTRICT OF OREGON FOR RESOLUTION OF SUCH DISPUTE, AND AGREE NOT TO CONTEST SUCH EXCLUSIVE JURISDICTION OR SEEK TO TRANSFER ANY ACTION RELATING TO SUCH DISPUTE TO ANY OTHER JURISDICTION. THE COMPANY AND THE HOLDER AGREE TO ACCEPT SERVICE OF PROCESS PURSUANT TO THE PROCEDURES SET FORTH IN SECTION 8. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE.

10. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.

(Signature Page Follows)

IN WITNESS WHEREOF, each of the Company and Holder has executed this Convertible Promissory Note as of the date first above written.

	Bioject Medical Technologies Inc.

	By:
		Name:
		Title:



	Holder:

	By:
		Name:
		Title:

	Address of Holder:

EX-10.6 7 a07-29905_1ex10d6.htm EX-10.6

EXHIBIT 10.6

FORM OF REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the “Agreement”) dated as of , 2007, is entered into by and between Bioject Medical Technologies Inc. (the “Company”) and (“Noteholder”).

WHEREAS, the Company has issued to Noteholder a warrant to purchase common stock (the “Warrant”) and a convertible promissory note (the “Note”) pursuant to a Convertible Note Purchase and Warrant Agreement of even date herewith; and,

WHEREAS, the Corporation wishes Noteholder to have piggyback registration rights as Seller had with regard to Common Stock of the Company which Noteholder may acquire upon exercise of the Warrant and conversion of the Note pursuant to Section 4.1.1 thereof (such Common Stock being the “Registrable Securities”).

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the Company and Noteholder agree as follows:

(A) Piggyback Registration.

(1) If the Company at any time proposes to register any of its shares of Common Stock under the Securities Act of 1933, as amended (the “Securities Act”) (other than a registration effected solely to implement an employee benefit plan, or a merger, acquisition, or exchange offer to which Rule 145 promulgated under the Securities Act is applicable), whether or not for sale for its own account, it shall give prompt written notice to Noteholder of each such intended registration by the Company and Noteholder shall be entitled to request that the Company include in any such registration any number of shares of Registrable Securities then owned by Noteholder (“Written Request”), subject to the limitations set forth in Section (B)(1) hereof.

(2) Upon the Written Request of Noteholder, made within ten days after the giving by the Company of any such notice of intention to register any of its shares of its Common Stock, the Company shall use its best efforts to effect the registration under the Securities Act of all shares of Registrable Securities which the Company has been so requested to register by Noteholder (subject to the restrictions set forth in Section (B)(1) hereof); provided, however, that (i) if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such Registrable Securities, the Company may, at its election, give written notice of such determination to Noteholder and, thereupon, shall be relieved of its obligation to register any shares of Registrable Securities on behalf of Noteholder in connection with such registration (but not from its obligation to pay the Registration Expenses (as hereinafter defined) in connection therewith), and (ii) if such registration involves an underwritten offering, Noteholder shall sell its shares of Registrable Securities to the underwriters selected by the Company on the same terms and conditions as apply to the Company.

(B) General Provisions.

(1) If a registration involves an underwritten offering and the managing underwriter advises the Company in writing that, in its opinion, the number of securities requested to be included in such registration exceeds the number which can be sold in such offering, then the Company shall include in such registration (i) first, the securities the Company proposes to sell, and (ii) second, the number of shares of Registrable Securities requested by Noteholder and any other stockholders or warrant holders of the Company with similar registration rights (collectively, the “Selling Holders”) to be included in such registration which, in the opinion of such underwriters, can be sold, such amount to be allocated pro rata among the Selling Holders requesting registration in accordance with the number of shares of Common Stock owned by such stockholder or represented by warrants or convertible notes held by such persons.

(2) Noteholder shall furnish the Company such information regarding such holder and the distribution of its shares of Registrable Securities as the Company may from time to time reasonably request in writing in connection with the registration statement (and the prospectus contained therein).

(3) The Company shall have the right to designate the managing underwriter in any underwritten offering.

(4) All expenses incident to all registration and filing fees, fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the shares of Common Stock), rating agency fees, printing expenses, messenger and delivery expenses, the fees and expenses incurred in connection with the listing of the securities to be registered on securities exchanges or NASDAQ, fees and disbursements of counsel for the Company and its independent certified public accountants, fees and disbursements of one counsel to all of the Selling Holders (such counsel to be selected by the Selling Holders selling a majority of the shares sold by all of the Selling Holders and such fees and disbursements of such counsel not exceeding $15,000), the reasonable fees and expenses of any special experts retained by the Company in connection with such registration and the fees and expenses of other persons retained by the Company (all such expenses being herein called “Registration Expenses”), will be borne by the Company. Except as provided above, the Company will not have any responsibility for any of the expenses of Noteholder incurred in connection with any registration hereunder, including, without limitation, underwriting discounts or commissions attributable to the sale of shares of Registrable Securities and counsel fees for Noteholder.

(5)

(i) In connection with any registration of shares of Registrable Securities of Noteholder pursuant to Section (A) hereof, the Company agrees to indemnify, to the full extent permitted by law, Noteholder against all losses, claims, damages, liabilities and expenses (including attorneys’ fees and disbursements) caused by any untrue or alleged untrue statement of a material fact contained in any registration statement, prospectus, or preliminary prospectus or any omission or alleged omission to state therein 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, except insofar as the same are caused by or contained in any information with respect to Noteholder furnished in writing to the Company by Noteholder expressly for use therein or by Noteholder’s failure to deliver to a prospective shareholder a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished Noteholder with a sufficient number of copies of the same.

(ii) In connection with any registration in which Noteholder is participating, Noteholder will furnish to the Company in writing such information with respect to it as the Company reasonably requests for use in connection with any such registration statement, prospectus or preliminary prospectus and agrees to indemnify, to the full extent permitted by law, the Company, its directors and officers and each person who controls the Company (within the meaning of the Securities Act), and, in connection with an underwritten offering, each underwriter and each person who controls the underwriters (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including attorneys’ fees and disbursements) caused by any untrue or alleged untrue statement of a material fact contained in any registration statement, prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information with respect to Noteholder so furnished in writing by Noteholder expressly for use therein.

(iii) Any person entitled to indemnification hereunder agrees to give prompt written notice to the indemnifying party after the receipt by such person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such person will claim indemnification or contribution pursuant to this Agreement and, unless a conflict of interest exists between such indemnified party and the indemnifying party with respect to such claim, permit the indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to such indemnified party. If the indemnifying party

is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel with respect to such claim, unless a conflict of interest exists between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels. The indemnifying party will not be subject to any liability for any settlement made without its consent.

(iv) If the indemnification provided for in this Section (B)(5) from the indemnifying party is unavailable to an indemnified party hereunder in respect of any losses, claims, damages, liabilities, or expenses referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities, or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities, or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities, and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section (B)(5)(iii) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section (B)(5)(iv) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. 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.

If indemnification is available under this Section (B)(5), the indemnifying parties shall indemnify the indemnified party to the full extent provided in Sections (B)(5)(i) and (B)(5)(ii) hereof without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Section (B)(5)(iv).

(6) If the Company becomes subject to the reporting requirements of either Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company will use its best efforts to timely file with the Securities and Exchange Commission (the “SEC”) such information as the SEC may require under either of said Sections; and in such event, the Company shall use its best efforts to take all action as may be required as a condition to the availability of Rule 144 under the Securities Act (or any successor exemptive rule hereinafter in effect) with respect to shares of Registrable Securities. The Company shall furnish to Noteholder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company as filed with the SEC, and (iii) such other reports and documents as Noteholder may reasonably request in availing itself of any rule or regulation of the SEC allowing Noteholder to sell any shares of Registrable Securities without registration.

(7) Noteholder shall not have any right to take any action to restrain, enjoin or otherwise delay enjoin or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of Section (A).

(8) In consideration for the Company’s agreeing to its obligations under Section (A), the Noteholder agrees, in connection with any registration of the Company’s securities in a firm commitment underwriting, upon the request of the Company or the underwriters managing such underwriting, not to sell, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any Registrable Securities (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) after the effective date of such registration as the Company or the underwriters may specify, provided that each officer, director and 10% shareholder of the Company shall make the same agreement with respect to other securities of the Company then held by such other person (other

than those included in the registration). In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the securities of the Noteholder (and the shares of every person subject to the foregoing restriction) until the end of such period.

(9) Noteholder shall not be entitled to exercise any right provided for in Section (A) after the earlier of (i) the fourth anniversary of the of this Agreement or (ii) such time at which all Registrable Securities held by Noteholder can be sold in any three-month period without registration in compliance with Rule 144 of the Securities Act. The Company is not obligated to register any securities pursuant to Section (A) to the extent such securities may be sold without registration in compliance with Rule 144 of the Act.

(1) All notices or demands shall be in writing and shall be delivered personally, electronically, or by express, certified or registered mail or by private overnight express mail service. Delivery shall be deemed conclusively made: (i) at the time of delivery if personally delivered, (ii) immediately in the event notice is delivered by confirmed facsimile, (iii) twenty-four (24) hours after delivery to the carrier if served by any private, overnight express mail service, (iv) twenty-four (24) hours after deposit thereof in the United States mail, properly addressed and postage prepaid, return receipt requested, if served by express mail, or (v) five (5) days after deposit thereof in the United States mail, properly addressed and postage prepaid, return receipt requested, if served by certified or registered mail.

Any notice or demand to the Company shall be given to:

	Bioject Medical Technologies Inc.


	Attn:
	Fax:

Any notice or demand to Noteholder shall be given to:




	Attn:
	Fax:

Any party may, by virtue of written notice in compliance with this paragraph, alter or change the address or the identity of the person to whom any notice, or copy thereof, is to be delivered.

(2) The Company and Noteholder shall each execute and deliver all such further instruments, documents and papers, and shall perform any and all acts necessary, to give full force and effect to all of the terms and provisions of this Agreement.

(3) Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Noteholder.

(4) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns; provided that the Noteholder shall not assign this Agreement or its rights hereunder without the prior written consent of the Company, which consent will not be unreasonably withheld.

(5) This Agreement incorporates the entire understanding of the parties and supersedes all previous agreements relating to the subject matter hereof, should they exist. This Agreement and any issue arising

out of or relating to the relationship of the parties hereunder shall be governed by, and construed in accordance with, the laws of the State of Oregon, without regard to principles of conflicts of law. In all matters of interpretation, whenever necessary to give effect to any provision of this Agreement, each gender shall include the others, the singular shall include the plural, and the plural shall include the singular. The titles of the paragraphs of this Agreement are for convenience only and shall not in any way affect the interpretation of any provision or condition of this Agreement.

(6) In the event of any litigation or arbitration between the parties hereto respecting or arising out of this Agreement, the prevailing party shall be entitled to recover reasonable legal fees, whether or not such litigation or arbitration proceeds to final judgment or determination.

(7) Each party hereto consents specifically to the exclusive jurisdiction of the Circuit Court for the County of Multnomah, State of Oregon and any court to which an appeal may be taken in connection with any action filed pursuant to this Agreement, for the purposes of all legal proceedings arising out of or relating to this Agreement. In connection with the foregoing consent, each party irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the Court’s exercise of personal jurisdiction over each party to this Agreement or the laying of venue of any such proceeding brought in the Court and any claim that any such proceeding brought in the Court has been brought in an inconvenient forum. Each party further irrevocably waives its right to a trial by jury and consents that service of process may be effected in any manner permitted under the laws of the State of Oregon.

(8) If any clause or provision of this Agreement is illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, the remainder of this Agreement shall not be affected thereby, and in lieu of each clause or provision of this Agreement that is illegal, invalid or unenforceable, there shall be added a clause or provision as similar in terms and in amount to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable, as long as it does not otherwise frustrate the principal purposes of this Agreement.

(Signature Page Follows)

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

	BIOJECT MEDICAL TECHNOLOGIES INC.


	By:
	Name:
	Title:



	By:
	Name:
	Title:

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