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): September 15, 2009

BIOJECT MEDICAL TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

Commission File Number: 000-15360

Oregon	93-1099680
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
20245 SW 95th 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:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

On September 15, 2009, Bioject Medical Technologies Inc. (“Bioject”) entered into Binding Memorandum of Terms (the “Memorandum”) with Signet Healthcare Partners, LLC (“Signet”), the fund manager of each of Life Sciences Opportunities Fund II (Institutional), L.P. and Life Sciences Opportunities Fund II, L.P. (collectively, the “LOF Funds”) relating to those two Convertible Subordinated Promissory Notes, dated as of December 5, 2007, issued by Bioject to the LOF Funds in the aggregate principal amount of $600,000 (the “Notes”) and the issuance of Series G Convertible Preferred Stock (“Series G Preferred”). The Memorandum is an enforceable agreement between Bioject and Signet.

Pursuant to the terms of the Memorandum, Bioject will issue shares of Series G Preferred with an issuance price of $0.13 per share for approximately $1.125 million payable as follows:

• conversion of existing Notes of approximately $675,000, including accrued interest; and

• cash of $450,000.

Each share of Series G Preferred will be convertible at any time into one share of Bioject’s common stock at the rate of $0.13 per share, subject to standard anti-dilution adjustments and has the following rights and preferences:

• the Series G Preferred will rank senior to all other outstanding preferred and common stock;

• in the event of liquidation, the Series G Preferred holders will receive $0.13 per share plus any accrued and unpaid dividends prior to any payments to any other series of preferred or common stock;

• no preferred stock will be issued in the future which is senior to the Series G Preferred, unless consented to by the holders of the Series G Preferred;

• the Series G Preferred will accrue an 8% per annum dividend, paid annually;

• if the Board does not declare a dividend, dividends will accrue at 10% per annum from the date of issuance, on a cumulative basis;

• dividends may be paid in cash or in additional shares of Series G Preferred at the original issuance price of $0.13 per share; and

• Series G Preferred votes on an as-converted basis.

Additional significant terms of the Memorandum include the following:

• Bioject’s board of directors shall consist of six members, two of which will be nominated by the Series G Preferred;

• a “plain vanilla” charter and bylaws, reasonably acceptable to Signet, the manager of the LOF Funds, will be submitted for shareholder approval;

• an additional option pool equal to 10% of the issued and outstanding common stock will be established and awarded to existing management and others (such as directors and/or consultants) deemed essential by the Board of Directors for value creation going forward. These options will be awarded with an exercise price equal to the issue price of the Series G Preferred. 25% of the options will vest on December 31^st of each of 2010, 2011, 2012 and 2013, except that vesting will be accelerated upon a change of control. The options will have a term of 10 years but will contain standard provisions relating to the termination of employment;

• all terms in this Memorandum and any associated documentation which require shareholder approval in order to be valid and effective will be submitted for shareholder approval at Bioject’s shareholder meeting to be held as soon as reasonably practicable;

• the maturity date of the existing Notes will be extended from September 15, 2009 to the date occurring 10 business days after the date of the shareholder meeting referred to above. If the shareholders do not approve the terms of the Memorandum at such meeting, the Notes and all accrued interest thereon will become due and payable on such 10^th business day;

• Except for ongoing business transactions already in process and the actions of Ferghana Partners under its engagement letter with Bioject, Bioject may not solicit or accept any offers to purchase any capital stock or assets of the company or any acquisition of the company for a period beginning the 31st day after execution of the Memorandum and ending the seventh business day following the shareholder meeting; and

• until the 30th day following execution of the Memorandum, Bioject has the right to solicit offers and enter into a competing transaction, so long as the transaction has materially superior terms as determined by Bioject’s Board of Directors, the Notes are paid in full at closing and the LOF Funds are paid a fee of $200,000 at closing as liquidated damages.

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The entire Board of Directors of Bioject voted to approve the Memorandum and to take all actions necessary to consummate its terms, other than one director who has a financial interest in Signet and abstained from the vote.

For the complete terms of the Memorandum, please refer to Exhibit 10.1 filed as an exhibit to this Form 8-K.

Additional Information and Where to Find It

Bioject intends to file with the Securities and Exchange Commission (“SEC”) a proxy statement with respect to some of the matters described in this filing (the “proxy statement”). BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS AND INVESTORS OF BIOJECT ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BIOJECT AND THE MATTERS TO BE VOTED UPON. Investors and security holders may obtain copies of the proxy statement, free of charge, at the SEC’s web site at www.sec.gov. Investors and security holders also may obtain these documents free of charge from Bioject at the Investor Relations link on Bioject’s web site at www.bioject.com or by contacting Bioject’s Investor Relations at (503) 692-8001.

Bioject and its directors and executive officers may be deemed participants in the solicitation of proxies from security holders in connection with the matters described herein to be submitted to shareholders. Information about the directors and executive officers of Bioject and information about other persons who may be deemed participants in this transaction will be included in the proxy statement. You can find information about Bioject’s directors and executive officers in its annual report (Form 10-K) filed with the SEC on March 31, 2009 and its amendment thereto (Form 10-K/A) filed April 30, 2009. You can obtain free copies of these documents from the SEC or from Bioject using the contact information above.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

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

10.1 Binding Memorandum of Terms dates September 14, 2009 between Bioject Medical Technologies Inc. and Signet Healthcare Partners, LLC.

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SIGNATURE

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

Date: September 16, 2009	BIOJECT MEDICAL TECHNOLOGIES INC.
	(Registrant)
	/s/    CHRISTINE M. FARRELL
	Christine M. Farrell
	Vice President of Finance
	(Principal Financial and Accounting Officer)

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EX-10.1

Exhibit 10.1

BINDING MEMORANDUM OF TERMS

Bioject Medical Technologies, Inc.

September 14, 2009

Offering of Series G Preferred Stock

Issuer:	Bioject Medical Technologies Inc., an Oregon Corporation (the “Company”).
Total Proceeds:	$1,125,000, paid as follows: •        Conversion of existing convertible notes of approximately $675,000, including accrued interest (the “Signet Notes”), held by the Investors listed below, which are investment funds managed by Signet Healthcare Partners, LLC (“Signet”) •        Balance paid in cash of approximately $450,000
Securities to be Issued:	Series G Convertible Preferred Stock (“Series G Preferred”). Each share of Series G Preferred will be convertible at any time into one share of Common Stock, subject to standard anti-dilution adjustments described in “Antidilution Adjustments” below, if any.
Issue Price:	$0.13 per share of Series G Preferred.
Investors:	Funds managed by Signet.
Use of Proceeds:	The proceeds from the issuance of Series G Preferred will be used for general corporate purposes.
Terms of Series G Preferred
Liquidation Preference:	The Series G Preferred will rank senior to all other outstanding Preferred Stock and to the Common Stock. Upon the occurrence of a Liquidation Event, Investors in the Series G Preferred will be paid a liquidation preference equal to $0.13 per share of Series G Preferred (plus any accrued and unpaid dividends) prior to any payments to any other series of Preferred Stock and the Common Stock. No Preferred Stock will be issued in the future which is senior to the Series G Preferred, unless consented to by the holders of the Series G Preferred. A Liquidation Event will include any dissolution, winding-up, merger, reorganization, consolidation, or other transaction(s) in which shareholders of the Company do not own a majority of the outstanding shares of the surviving corporation or a sale of a majority of the assets of the Company, including pursuant to a foreclosure proceeding by a secured lender.
Dividends:	8% per annum, payable annually. If the Board does not declare a dividend, dividends will accrue at 10% per annum from date of issuance, on a cumulative basis. Dividends can be paid in cash or in additional shares of Series G preferred at the Issue Price.
Antidilution Adjustments:	The conversion price of the Series G Preferred will be subject to adjustment at any time as the result of any subdivision, stock split, stock dividend, combination of shares or recapitalization.

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Voting Rights:	Votes on an as-converted basis. Has the benefit of all rights to vote as a class or series as provided by law and approval by a majority of the class of Series G Preferred is required for (1) the issuance or creation of any senior or pari passu debt or equity security or obligation, (2) payment of dividends on Common Stock, (3) any redemptions or repurchases of Common Stock or Preferred Stock except for purchases at fair market value from employees of the Company upon termination of employment and any allocations of new option awards to any employees or other persons, (4) any merger, acquisition, recapitalization, reorganization or sale of all or substantially all of the assets of the Company which results in a payment to the Series G Preferred Holder of an amount less than the Liquidation Preference, (5) an increase or decrease in the number of authorized shares of any series of Preferred Stock or Common Stock, (6) any change to the rights, preferences, and privileges of the Series G Preferred, (7) material amendments or repeal of any provision of the Company’s Charter or Bylaws, (8) material changes in the nature of the Company’s business or (9) the prepayment of any debt obligation.
Registration:	The Company will provide demand registration rights obligating the Company to file one Registration Statement on Form S-1 registering for resale the Common Stock underlying the Series G Preferred upon request of the holders of a majority of the Series G Preferred.
Management Option Pool:	An additional option pool equal to 10% of the issued and outstanding common stock will be established and awarded to existing management and others (such as directors and/or consultants) deemed essential by the Board of Directors for value creation going forward. These options will be awarded with an exercise price equal to the issue price. 25% of the options will vest on December 31st of each of 2010, 2011, 2012 and 2013, except that vesting will be accelerated upon a change of control. To the extent that this additional option pool requires shareholder approval and such approval is not obtained due to nay votes of shareholders not affiliated with Signet, such nonapproval shall have no impact on the validity or enforceability of all the other terms of this Binding Memorandum of Terms. The options will have a term of 10 years but will contain standard provisions relating to the termination of employment.
Board of Directors:	The Board of Directors shall consist of six members, two of which will be nominated by the Series G Preferred. The other four members will be nominated by the Board of Directors, and it is anticipated that such four nominees will be chosen from persons currently serving as Directors.
Charter/Bylaws:	A “plain vanilla” charter and bylaws, reasonably acceptable to Signet, will be submitted to shareholders for approval. The existing Rights Plan, or Poison Pill, shall be terminated and, if necessary, shall be submitted to shareholders of the Company for approval of such termination. Signet acknowledges that termination of the Rights Plan may require a cash redemption of the related rights by the Company. To the extent that counsel to the Company and counsel to Signet agree, termination and shareholder approval may be avoided if changes to the Rights Plan can be made which accomplish the goal of eliminating its material terms and conditions.
Shareholder Vote and Board Approval:	All terms in this Memorandum of Terms and any associated documentation which require shareholder approval in order to be valid and effective (the “Required Terms”), will be submitted for shareholder approval at a Company shareholder meeting to be held as soon as reasonably practicable. The Company and the Investors acknowledge that immediately prior to the execution of this Memorandum of Terms, the entire Board of Directors of the Company, with the exception of any directors not voting due to actual or perceived conflicts of interest (including due to financial interests, affiliations, or otherwise), voted unanimously to authorized and approve the Company’s execution of this Memorandum of Terms, and recommended that all additional actions needed to consummate the terms herein be undertaken, including the submission to shareholders for approval of any Required Terms on a date mutually agreed upon by the parties.

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Extension of Existing Note:	The maturity date of the existing Signet Notes will be extended to the date occurring 10 business days after the date of the shareholder meeting referred to above. If the shareholders do not approve the Required Terms at such meeting, the Signet Notes and all accrued interest thereon will become due and payable on such 10th business day.
Fee to Investors:	As a necessary inducement to the Investors to enter into this Memorandum of Terms, the Company agrees to pay the Investors or their designee a fee of $200,000, in cash, as liquidated damages, if the Board of Directors of the Company approves the consummation of another transaction as an alternative to the issuance of the Series G Preferred, including by reason of the Company pursuing an alternative transaction as permitted under “No Shop” and “Fiduciary Shop Period” below.
Closing Conditions:	Standard conditions to Closing, which shall include, without limitation, a)      Closing subject to the negotiation of definitive legal documents with standard terms and conditions and completion of legal and financial due diligence by the Investors. b)      Approval of the Investment Committee of Signet within 30 days of the date of the execution of this Memorandum of Terms.
No Shop:	Commencing on the 31st day after the date of the execution of this Binding Memorandum of Terms, until 5:00 p.m. EST on the 7th business day following the shareholder meeting referred to above, the Company shall not directly or indirectly solicit, or directly or indirectly accept (i) any offers for the purchase or acquisition of (a) any capital stock of the Company, (b) all or any material portion of the assets of the Company, or (ii) any proposal for any merger or consolidation involving the Company, and the Company shall not negotiate or enter into any agreement or understanding with any other person with respect to any such transaction. The only exceptions to the foregoing include all ongoing business transactions currently in process and the actions of Ferghana Partners under its engagement letter with the Company.
Fiduciary Shop Period	As soon as possible after the execution of this Binding Memorandum of Terms and as required by law, this Binding Memorandum of Terms shall be disclosed in a Form 8-K filed by the Company with the Securities and Exchange Commission, and reference shall be made specifically to the binding nature of this Binding Memorandum of Terms on the Company and the Investors and the Board Approval. Commencing on the date of the execution of this Binding Memorandum of Terms and until the 30th calendar day thereafter, the Company shall have the right to solicit offers with respect to and enter into a competing transaction subject to the following terms: 1)      The overall terms must be materially superior to those of this Binding Memorandum of Terms as determined by the Company’s Board of Directors in their sole discretion. 2)      The Signet Notes are paid in full upon the closing of the competing transaction. 3)      The Investors or their designee are paid a fee of $200,000 in cash, as described in Fee to Investors above, as liquidated damages, upon the date of such closing.
Governing Law and Binding Effect:	This Binding Memorandum of Terms shall be governed and construed under New York law. This Binding Memorandum of Terms is intended to be a binding agreement between the Company and the Investors. Formal documentation shall be prepared, containing the terms set forth herein and the standard terms and conditions that would accompany such terms when memorialized formally.
Expenses:	Counsel to Investors will draft the Series G Preferred purchase agreement and related documents, including the description of the Series G Preferred Stock for the Company’s charter. The Company shall pay reasonable expenses of the Investors (including Investors’ counsel), not to exceed $25,000, whether or not the Series G Preferred is issued, in addition to any $200,000 fee that is payable.

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AGREED AND ACCEPTED:
Bioject Medical Technologies, Inc.
20245 SW 95th Avenue
Tualatin, OR 97062, USA
By:	/s/    Ralph Makar
Name:	Ralph Makar
Title:	President and CEO
Date:	September 14, 2009

INVESTORS

LIFE SCIENCES OPPORTUNITIES FUND II, L.P.

By:	Signet Healthcare Partners, general partner
By:	/s/    Al Hansen
Name:	Al Hansen
Date:	September 15, 2009

LIFE SCIENCES OPPORTUNITIES FUND II (INSTITUTIONAL), L.P.

By:	Signet Healthcare Partners, general partner
By:	/s/    Al Hansen
Name:	Al Hansen
Date:	September 15, 2009

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