Exhibit 10.2

 

Registration Rights Agreement

 

This Registration Rights Agreement (the “Agreement”) is made and entered into as
of the 15th day of November 2004 (the “Effective Date”) between Bioject Medical
Technologies Inc., an Oregon corporation (the “Company”), and the parties set
forth on the signature page and Exhibit A hereto (each, a “Purchaser” and
collectively, the “Purchasers”).

 

R e c i t a l s:

 

A.                                   The Purchasers have purchased shares of the
Company’s Preferred Stock and Warrants (as defined below) pursuant to the
Purchase Agreement of even date herewith (the “Purchase Agreement”) by and
between the Company and each Purchaser.

 

B.                                     The Company and the Purchasers desire to
set forth the registration rights to be granted by the Company to the
Purchasers.

 

Now, Therefore, in consideration of the mutual promises, representations,
warranties, covenants, and conditions set forth herein and in the Subscription
Agreements, the parties mutually agree as follows:

 

A g r e e m e n t:

 

1.                                       Certain Definitions.  As used in this
Agreement, the following terms shall have the following respective meanings:

 

“Approved Market” means the Nasdaq National Market, the Nasdaq SmallCap Market,
the New York Stock Exchange, Inc., or the American Stock Exchange, Inc.

 

“Business Day” means any day of the year, other than a Saturday, Sunday, or
other day on which the Commission is required or authorized to close.

 

“Closing Date” means November 15, 2004, or such other time as is mutually agreed
between the Company and the Purchasers for the closing of the sale referred to
in Recital A above.

 

“Commission” means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.

 

“Common Stock” means the common stock, no par value, of the Company and any and
all shares of capital stock or other equity securities of: (i) the Company which
are added to or exchanged or substituted for the Common Stock by reason of the
declaration of any stock dividend or stock split, the issuance of any
distribution or the reclassification, readjustment, recapitalization or other
such modification of the capital structure of the Company; and (ii) any other
corporation, now or hereafter organized under the laws of any state or other
governmental authority, with which the Company is merged, which results from any
consolidation or reorganization to which the Company is a party, or to which is
sold all or substantially all of the shares or assets of the Company, if
immediately after such merger, consolidation, reorganization or sale, the
Company or the stockholders of the Company own equity securities having in the
aggregate more than 50% of the total voting power of such other corporation.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.

 

“Family Member” means (a) with respect to any individual, such individual’s
spouse, any descendants (whether natural or adopted), any trust all of the
beneficial interests of which are owned by any of such individuals or by any of
such individuals together with any organization described in Section 501(c)(3)
of the Internal Revenue

 

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Code of 1986, as amended, the estate of any such individual, and any
corporation, association, partnership or limited liability company all of the
equity interests of which are owned by those above described individuals, trusts
or organizations and (b) with respect to any trust, the owners of the beneficial
interests of such trust.

 

“Form S-3” means such form under the Securities Act as in effect on the date
hereof or any registration form under the Securities Act subsequently adopted by
the Commission, which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the
Commission.

 

“Holder” means each Purchaser, or any of such Purchaser’s respective successors
and Permitted Assigns who acquire rights in accordance with this Agreement with
respect to the Registrable Securities directly or indirectly from a Purchaser,
including from any Permitted Assignee.

 

“Inspector” means any attorney, accountant, or other agent retained by a
Purchaser for the purposes provided in Section 4(j).

 

“Majority Holders” means at any time Holders of a majority of the Registrable
Securities.

 

“Offering Price” means $1.15 (as adjusted for any stock split, reverse stock
split, stock dividend, recapitalization, and the like).

 

“Permitted Assignee” means (a) with respect to a partnership, its partners or
former partners in accordance with their partnership interests, (b) with respect
to a corporation, its shareholders in accordance with their interest in the
corporation, (c) with respect to a limited liability company, its members or
former members in accordance with their interest in the limited liability
company, (d) with respect to an individual party, any Family Member of such
party, (e) an entity that is controlled by, controls, or is under common control
with a transferor, or (f) a party to this Agreement.

 

“Preferred Stock” means the Series D Preferred Stock, no par value, of the
Company.

 

The terms “register,” “registered,” and “registration” refers to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.

 

“Registrable Securities” means shares of Common Stock issued or issuable to each
Purchaser upon conversion of the Preferred Stock or exercise of the Warrants
issued to each pursuant to the Purchase Agreement, excluding (i) any Registrable
Securities that have been publicly sold or may be sold immediately without
registration under the Securities Act either pursuant to Rule 144 of the
Securities Act or otherwise; (ii) any Registrable Securities sold by a person in
a transaction pursuant to a registration statement filed under the Securities
Act or (iii) any Registrable Securities that are at the time subject to an
effective registration statement under the Securities Act.

 

“Registration Default Date” means the date which is 270 days following the
Closing Date; provided, however, (i) if the 270h day following the Closing Date
falls during an S-3 Blackout Period, the Registration Default Date shall be the
date immediately following the last day of such S-3 Blackout Period, and (ii) if
the Registration Statement is subject to review by the SEC staff and the Company
is unable to file necessary pre-effective amendments to the Registration
Statement with the SEC because of an S-3 Blackout Period, the Registration
Default Date shall be extended by the number of calendar days that the Company
is unable to file any such pre-effective amendment during any such S-3 Blackout
Period that occurs prior to the end of the 365-day period.

 

“Registration Default Period” means the period following the Registration
Default Date during which any Registration Event occurs and is continuing.

 

“Registration Event” means the occurrence of any of the following events:

 

(a)                                  the Company fails to file with the SEC the
Registration Statement on or before the Registration Filing Date pursuant to
Section 3(a),

 

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(b)                                 the Registration Statement covering
Registrable Securities is not declared effective by the Commission on or before
the Registration Default Date, or

 

(c)                                  after the SEC Effective Date, sales cannot
be made pursuant to the Registration Statement for any reason (including without
limitation by reason of a stop order, or the Company’s failure to update the
Registration Statement) but except as excused pursuant to Section 3(a).

 

“Registration Statement” means the registration statement required to be filed
by the Company pursuant to Section 3(a).

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute promulgated in replacement thereof, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.

 

“SEC Effective Date” means the date the Registration Statement is declared
effective by the Commission.

 

“S-3 Blackout Period” means, with respect to a registration, a period in each
case commencing on the day immediately after the Company notifies the Purchasers
that they are required, pursuant to Section 4(f), to suspend offers and sales of
Registrable Securities during which the Company, in the good faith judgment of
its Board of Directors, determines (because of the existence of, or in
anticipation of, any acquisition, financing activity, or other transaction
involving the Company, or the unavailability for reasons beyond the Company’s
control of any required financial statements, disclosure of information which is
in its best interest not to publicly disclose, or any other event or condition
of similar significance to the Company) that the registration and distribution
of the Registrable Securities to be covered by such registration statement, if
any, would be seriously detrimental to the Company and its shareholders and
ending on the earlier of (1) the date upon which the material non-public
information commencing the S-3 Blackout Period is disclosed to the public or
ceases to be material and (2) such time as the Company notifies the selling
Holders that the Company will no longer delay such filing of the Registration
Statement, recommence taking steps to make such Registration Statement
effective, or allow sales pursuant to such Registration Statement to resume;
provided, however, that (a) the Company shall limit its use of S-3 Blackout
Periods, in the aggregate, to 30 Trading Days in any 12-month period and (b) no
S-3 Blackout Period may commence sooner than 60 days after the end of a prior
S-3 Blackout Period.

 

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

 

“Warrants” means the warrants to purchase common stock issued by the Company to
the Purchasers pursuant to the Purchase Agreement.

 

2.                                       Term.  This Agreement shall continue in
full force and effect for a period of two (2) years from the Effective Date.

 

3.                                       Registration.

 

(a)                                  Registration on Form S-3.  As promptly as
reasonably practicable after the date hereof, but in any event not later than
180 days after the Closing Date (the “Registration Filing Date”), the Company
shall use its commercially reasonable efforts to file with the Commission a
shelf registration statement on Form S-3 relating to the resale by the Holders
of all of the Registrable Securities; provided, however, that the Company shall
not be obligated to effect any such registration, qualification, or compliance
pursuant to this Section 3(a), or keep such registration effective pursuant to
Section 4: (i) in any particular jurisdiction in which the Company would be
required to qualify to do business as a foreign corporation or as a dealer in
securities under the securities or blue sky laws of such jurisdiction or to
execute a general consent to service of process in effecting such registration,
qualification or compliance, in each case where it has not already done so; or
(ii) during any S-3 Blackout Period, in which case the Registration Filing Date
shall be extended to the date immediately following the last day of such S-3
Blackout Period.

 

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(b)                                 Piggyback Registration.  If the Company
shall determine to register for sale for cash any of its Common Stock, for its
own account or for the account of others (other than the Holders) pursuant to
the exercise of demand registration rights, other than (i) a registration
relating solely to employee benefit plans or securities issued or issuable to
employees, consultants (to the extent the securities owned or to be owned by
such consultants could be registered on Form S-8) or any of their Family Members
(including a registration on Form S-8) or (ii) a registration relating solely to
a Commission Rule 145 transaction, a registration on Form S-4 in connection with
a merger, acquisition, divestiture, reorganization, or similar event, the
Company shall promptly give to the Holders written notice thereof (and in no
event shall such notice be given less than 20 calendar days prior to the filing
of such registration statement), and shall, subject to Section 3(c), include in
such registration (and any related qualification under blue sky laws or other
compliance) (a “Piggyback Registration”), all of the Registrable Securities
specified in a written request or requests, made within 10 calendar days after
receipt of such written notice from the Company, by any Holder or Holders. 
However, the Company may, without the consent of the Holders, withdraw such
registration statement prior to its becoming effective if the Company or such
other shareholders have elected to abandon the proposal to register the
securities proposed to be registered thereby.

 

(c)                                  Underwriting.  If a Piggyback Registration
is for a registered public offering involving an underwriting, the Company shall
so advise the Holders in writing or as a part of the written notice given
pursuant to Section 3(b).  In such event the right of any Holder to registration
pursuant to Section 3(b) shall be conditioned upon such Holder’s participation
in such underwriting and the inclusion of such Holder’s Registrable Securities
in the underwriting to the extent provided herein.  All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and any other shareholders of the Company distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company or selling shareholders, as applicable.  Notwithstanding any other
provision of this Section 3(c), if the underwriter or the Company determines
that marketing factors require a limitation of the number of shares to be
underwritten, the underwriter may exclude some or all Registrable Securities
from such registration and underwriting.  The Company shall so advise all
Holders (except those Holders who failed to timely elect to distribute their
Registrable Securities through such underwriting or have indicated to the
Company their decision not to do so), and the number of shares of Registrable
Securities that may be included in the registration and underwriting, if any,
shall be allocated among such Holders as follows:

 

(i)                                     In the event of a Piggyback Registration
that is initiated by the Company, the number of shares that may be included in
the registration and underwriting shall be allocated first to the Company and
then, subject to obligations and commitments existing as of the date hereof, to
all selling shareholders, including the Holders, who have requested to sell in
the registration on a pro rata basis according to the number of shares requested
to be included; and

 

(ii)                                  In the event of a Piggyback Registration
that is initiated by the exercise of demand registration rights by a shareholder
or shareholders of the Company (other than the Holders), then the number of
shares that may be included in the registration and underwriting shall be
allocated first to such selling shareholders who exercised such demand and then,
subject to obligations and commitments to all other selling shareholders,
including the Holders, who have requested to sell in the registration, on a pro
rata basis according to the number of shares requested to be included.

 

No Registrable Securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such registration.  If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the
underwriter.  The Registrable Securities and/or other securities so withdrawn
from such underwriting shall also be withdrawn from such registration; provided,
however, that, if by the withdrawal of such Registrable Securities a greater
number of Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities pursuant to the terms and limitations set forth herein in the same
proportion used above in determining the underwriter limitation.

 

(d)                                 Other Registrations.  Prior to the SEC
Effective Date the Company will not, without the prior written consent of the
Majority Holders, file or request the acceleration of any other registration
statement filed with the Commission, and during any time subsequent to the SEC
Effective Date when the Registration Statement for any reason is not available
for use by any Holder for the resale of any Registrable Securities, the Company
shall not,

 

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without the prior written consent of the Majority Holders, file any other
registration statement or any amendment thereto with the Commission under the
Securities Act or request the acceleration of the effectiveness of any other
registration statement previously filed with the Commission, other than (A) any
registration statement on Form S-8 or Form S-4 and (B) any registration
statement or amendment which the Company is required to file or as to which the
Company is required to request acceleration pursuant to any obligation in effect
on the date of execution and delivery of this Agreement.

 

(e)                                  Failure to File Registration Statement. If
a Registration Event occurs, then the Company will make payments to each
Purchaser, as liquidated damages for the minimum amount of damages to the
Qualified Purchaser by reason thereof, and not as a penalty, at a rate equal to
one percent (1%) of the Offering Price per share of Preferred Stock or, one
tenth of one percent (0.1%) of the Offering Price for each share of Common Stock
acquired upon exercise of a Warrant, held by such Purchaser per month, for each
calendar month of the Registration Default Period (pro rated for any period less
than 30 days); provided, however, if a Registration Event occurs (or is
continuing) on a date more than one-year after the Purchaser acquired the
Registrable Securities (and thus the one-year holding period under Rule 144(d)
has elapsed), liquidated damages shall be paid only with respect to that portion
of a Purchaser’s Registrable Securities that cannot then be immediately resold
in reliance on Rule 144. Each such payment shall be due and payable within five
days after the end of each calendar month of the Registration Default Period
until the termination of the Registration Default Period and within five days
after such termination.  Such payments shall be in partial compensation to the
Purchaser, and shall not constitute the Purchaser’s exclusive remedy for such
events. The Registration Default Period shall terminate upon (i) the filing of
the Registration Statement in the case of clause (a) of the definition of
“Registration Event,” (ii) the SEC Effective Date in the case of clause (b) of
the definition of “Registration Event,” (iii) the ability of the Purchaser to
effect sales pursuant to the Registration Statement in the case of clause (c) of
the Definition of “Registration Event,” and (iv) in the case of the events
described in clauses (b) and (c) of the definition of “Registration Event,” the
earlier termination of the Registration Default Period.  The amounts payable as
liquidated damages pursuant to this paragraph shall be payable in lawful money
of the United States.  Amounts payable as liquidated damages to each Purchaser
hereunder with respect to each share of Registrable Securities shall cease when
the Purchaser no longer holds such share of Registrable Securities or such share
of Registrable Securities can be immediately sold by the Purchaser in reliance
on Rule 144.

 

4.                                       Registration Procedures.  In the case
of each registration, qualification, or compliance effected by the Company
pursuant to Section 3 hereof, the Company will keep each Holder including
securities therein reasonably advised in writing (which may include e-mail) as
to the initiation of each registration, qualification, and compliance and as to
the completion thereof.  At its expense with respect to any registration
statement filed pursuant to Section 3, the Company will use its commercially
reasonable efforts to:

 

(a)                                  prepare and file with the Commission with
respect to such Registrable Securities, a registration statement on Form S-3 or
any other form for which the Company then qualifies or which counsel for the
Company shall deem appropriate, and which form shall be available for the sale
of the Registrable Securities in accordance with the intended method(s) of
distribution thereof, and use its commercially reasonable efforts to cause such
registration statement to become and remain effective at least for a period
ending with the first to occur of (i) the sale of all Registrable Securities
covered by the registration statement, (ii) the availability under Rule 144 for
the Holder to immediately, freely resell without restriction all Registrable
Securities covered by the registration statement, and (iii) one year after
expiration of the term of the Warrants (in either case, the “Effectiveness
Period”); provided, however, if at the end of such one-year period, any Holder
is not able to immediately, freely resell all Registrable Securities that it
owns, the Effectiveness Period shall continue until terminated pursuant to
clause (i) or (ii); provided that no later than two business days before filing
with the Commission a registration statement or prospectus or any amendments or
supplements thereto, the Company shall (i) furnish to one special counsel
(“Holders Counsel”) selected by the Company for the benefit of the Holders
(which Holders Counsel initially shall be John T. Unger of Thompson & Knight
LLP, Houston, Texas), copies of all such documents proposed to be filed
(excluding any exhibits other than applicable underwriting documents), in
substantially the form proposed to be filed, which documents shall be subject to
the review of such Holders Counsel, and (ii) notify each Holder of Registrable
Securities covered by such registration statement of any stop order issued or
threatened by the Commission and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered;

 

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(b)                                 if a registration statement is subject to
review by the Commission, promptly respond to all comments and diligently pursue
resolution of any comments to the satisfaction of the Commission;

 

(c)                                  prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective during the Effectiveness Period (but in any event at least
until expiration of the 90-day period referred to in Section 4(3) of the
Securities Act and Rule 174, or any successor thereto, thereunder, if
applicable), and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
during such period in accordance with the intended method(s) of disposition by
the sellers thereof set forth in such registration statement;

 

(d)                                 furnish, without charge, to each Holder of
Registrable Securities covered by such registration statement (i) a reasonable
number of copies of such registration statement (including any exhibits thereto
other than exhibits incorporated by reference), each amendment and supplement
thereto as such Holder may request, (ii) such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any other prospectus filed under Rule 424 under the Securities Act) as such
Holders may request, in conformity with the requirements of the Securities Act,
and (iii) such other documents as such Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Holder,
but only during the Effectiveness Period;

 

(e)                                  use its commercially reasonable efforts to
register or qualify such Registrable Securities under such other applicable
securities or blue sky laws of such jurisdictions as any Holder of Registrable
Securities covered by such registration statement reasonably requests as may be
necessary for the marketability of the Registrable Securities (such request to
be made by the time the applicable registration statement is deemed effective by
the Commission) and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Holder to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such Holder; provided
that the Company shall not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this paragraph (e), (ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such jurisdiction;

 

(f)                                    as promptly as practicable after becoming
aware of such event, notify each Holder of such Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event which comes to the Company’s
attention if as a result of such event the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and the Company shall promptly prepare and
furnish to such Holder a supplement or amendment to such prospectus (or prepare
and file appropriate reports under the Exchange Act) so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, unless suspension of the use of such prospectus
otherwise is authorized herein or in the event of an S-3 Blackout Period, in
which case no supplement or amendment need be furnished (or Exchange Act filing
made) until the termination of such suspension or S-3 Blackout Period;

 

(g)                                 comply, and continue to comply during the
period that such registration statement is effective under the Securities Act,
in all material respects with the Securities Act and the Exchange Act and with
all applicable rules and regulations of the Commission with respect to the
disposition of all securities covered by such registration statement.

 

(h)                                 as promptly as practicable after becoming
aware of such event, notify each Holder of Registrable Securities being offered
or sold pursuant to the Registration Statement of the issuance by the Commission
of any stop order or other suspension of effectiveness of the Registration
Statement at the earliest possible time;

 

(i)                                     permit the Holders of Registrable
Securities being included in the Registration Statement and their legal counsel,
at such Holders’ sole cost and expense (except as otherwise specifically
provided in Section 6) to review and have a reasonable opportunity to comment on
the Registration Statement and all amendments and supplements thereto at least
two Business Days prior to their filing with the Commission and shall not file
any such document to which the Majority Holders reasonably object;

 

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(j)                                     make available for inspection by any
Holder and any Inspector retained by such Holder, at such Holder’s sole expense,
all Records as shall be reasonably necessary to enable such Holder to exercise
its due diligence responsibility, and cause the Company’s officers, directors,
and employees to supply all information which such Holder or any Inspector may
reasonably request for purposes of such due diligence; provided, however, that
such Holder shall hold in confidence and shall not make any disclosure of any
record or other information which the Company determines in good faith to be
confidential, and of which determination such Holder is so notified at the time
such Holder receives such information, unless (i) the disclosure of such record
is necessary to avoid or correct a misstatement or omission in the Registration
Statement and a reasonable time prior to such disclosure the Holder shall have
informed the Company of the need to so correct such misstatement or omission and
the Company shall have failed to correct such misstatement of omission, (ii) the
release of such record is ordered pursuant to a subpoena or other order from a
court or governmental body of competent jurisdiction or (iii) the information in
such record has been made generally available to the public other than by
disclosure in violation of this or any other agreement.  The Company shall not
be required to disclose any confidential information in such records to any
Inspector until and unless such Inspector shall have entered into a
confidentiality agreement with the Company with respect thereto, substantially
in the form of this Section 4(j), which agreement shall permit such Inspector to
disclose records to the Holder who has retained such Inspector.  Each Holder
agrees that it shall, upon learning that disclosure of such Records is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Company and allow the Company, at the Company’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, the records deemed confidential.  The Company shall hold
in confidence and shall not make any disclosure of information concerning a
Holder provided to the Company pursuant to this Agreement unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) disclosure of such information to the Staff of the Division of
Corporation Finance is necessary to respond to comments raised by the Staff in
its review of the Registration Statement, (iii) disclosure of such information
is necessary to avoid or correct a misstatement or omission in the Registration
Statement, (iv) release of such information is ordered pursuant to a subpoena or
other order from a court or governmental body of competent jurisdiction, or (v)
such information has been made generally available to the public other than by
disclosure in violation of this or any other agreement.  The Company agrees that
it shall, upon learning that disclosure of such information concerning a Holder
is sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to such Holder and allow such Holder, at
such Holder’s expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, such information;

 

(k)                                  use its commercially reasonable efforts to
cause all the Registrable Securities covered by the Registration Statement to be
quoted on the Nasdaq Stock Market or such other principal securities market on
which securities of the same class or series issued by the Company are then
listed or traded;

 

(l)                                     provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities at all times;

 

(m)                               cooperate with the Holders of Registrable
Securities being offered pursuant to the Registration Statement to facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities sold pursuant to the Registration
Statement and enable such certificates to be in such denominations or amounts as
the Holders may reasonably request and registered in such names as the Holders
may request;

 

(n)                                 during the Effectiveness Period, refrain
from bidding for or purchasing any Common Stock or any right to purchase Common
Stock or attempting to induce any Person to purchase any such security or right
if such bid, purchase or attempt would in any way limit the right of the Holders
to sell Registrable Securities by reason of the limitations set forth in
Regulation M under the 1934 Act; and

 

(o)                                 take all other reasonable actions necessary
to expedite and facilitate disposition by the Holders of the Registrable
Securities pursuant to the Registration Statement.

 

5.                                       Suspension of Offers and Sales.  Each
Holder of Registrable Securities agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 4(f)
hereof or of the commencement of an S-3 Blackout Period, such Holder shall
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder’s receipt of
the copies

 

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of the supplemented or amended prospectus contemplated by Section 4(f) hereof or
notice of the end of the S-3 Blackout Period, and, if so directed by the
Company, such Holder shall deliver to the Company (at the Company’s expense) all
copies (including, without limitation, any and all drafts), other than permanent
file copies, then in such Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.  In the
event the Company shall give any such notice, the period mentioned in Section
4(a)(iii) hereof shall be extended by the greater of (i) ten business days or
(ii) the number of days during the period from and including the date of the
giving of such notice pursuant to Section 4(f) hereof to and including the date
when each Holder of Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or amended
prospectus contemplated by Section 4(f) hereof.

 

6.                                       Registration Expenses.  The Company
shall pay all expenses in connection with any registration, including, without
limitation, all registration, filing, stock exchange fees, printing expenses,
all fees and expenses of complying with securities or blue sky laws, the fees
and disbursements of counsel for the Company and of its independent accountants,
and the reasonable fees and disbursements of a Holders Counsel (not to exceed
$5,000); provided that, in any underwritten registration, each party shall pay
for its own underwriting discounts and commissions and transfer taxes. Except as
provided above in this Section 6 and Section 9, the Company shall not be
responsible for the expenses of any attorney or other advisor employed by a
Holder of Registrable Securities.

 

7.                                       Assignment of Rights. No Holder may
assign its rights under this Agreement to any party without the prior written
consent of the Company; provided, however, that a Holder may assign its rights
under this Agreement without such restrictions to a Permitted Assignee as long
as (a) such transfer or assignment is effected in accordance with applicable
securities laws; (b) such transferee or assignee agrees in writing to become
subject to the terms of this Agreement; and (c) the Company is given written
notice by such Holder of such transfer or assignment, stating the name and
address of the transferee or assignee and identifying the Registrable Securities
with respect to which such rights are being transferred or assigned.

 

8.                                       Information by Holder.  The Holder or
Holders of Registrable Securities included in any registration shall furnish to
the Company such information regarding such Holder or Holders and the
distribution proposed by such Holder or Holders as the Company may request in
writing.

 

9.                                       Indemnification.

 

(a)                                  In the event of the offer and sale of
Registrable Securities held by Holders under the Securities Act, the Company
shall, and hereby does, indemnify and hold harmless, to the fullest extent
permitted by law, each Holder, its directors, officers, partners, and each other
person, if any, who controls or is under common control with such Holder or any
such underwriter within the meaning of Section 15 of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, and expenses to
which the Holder or any such director, officer, partner or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such shares
were registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, 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 in which they were made not misleading,
and the Company shall reimburse the Holder, and each such director, officer,
partner, and controlling person for any legal or any other expenses reasonably
incurred by them in connection with investigating, defending or settling any
such loss, claim, damage, liability, action or proceeding; provided that the
Company shall not be liable in any such case (i) to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder or (ii) if the person
asserting any such loss, claim, damage, liability (or action or proceeding in
respect thereof) who purchased the Registrable Securities that are the subject
thereof did not receive a copy of an amended preliminary prospectus or the final
prospectus (or the final prospectus as amended or supplemented) at or prior to
the written confirmation of the sale of such Registrable Securities to such
person because of the failure of such Holder or underwriter to so provide such
amended preliminary or final prospectus and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact made in such

 

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preliminary prospectus was corrected in the amended preliminary or final
prospectus (or the final prospectus as amended or supplemented). Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Holders, or any such director, officer, partner, underwriter or
controlling person and shall survive the transfer of such shares by the Holder.

 

(b)                                 As a condition to including any Registrable
Securities to be offered by a Holder in any registration statement filed
pursuant to this Agreement, each such Holder agrees to be bound by the terms of
this Section 9 and to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors and officers, and each other
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director or officer or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information about such Holder as
a Holder of the Company furnished to the Company, and such Holder shall
reimburse the Company, and each such director, officer, and controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating, defending, or settling and such loss, claim, damage, liability,
action, or proceeding; provided, however, that such indemnity agreement found in
this Section 9(b) shall in no event exceed the gross proceeds from the offering
received by such Holder.  Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling person and shall survive the transfer by any
Holder of such shares.

 

(c)                                  Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Section 9(a) or (b) hereof (including any governmental
action), such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party, give written notice to the indemnifying
party of the commencement of such action; provided that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under Section 9(a) or (b) hereof, except
to the extent that the indemnifying party is actually prejudiced by such failure
to give notice.  In case any such action is brought against an indemnified
party, unless in the reasonable judgment of counsel to such indemnified party a
conflict of interest between such indemnified and indemnifying parties may exist
or the indemnified party may have defenses not available to the indemnifying
party in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof, unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defenses thereof or the indemnifying party fails to defend such claim in a
diligent manner, other than reasonable costs of investigation.  Neither an
indemnified nor an indemnifying party shall be liable for any settlement of any
action or proceeding effected without its consent.  No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement, which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim or litigation. 
Notwithstanding anything to the contrary set forth herein, and without limiting
any of the rights set forth above, in any event any party shall have the right
to retain, at its own expense, counsel with respect to the defense of a claim.

 

(d)                                 In the event that an indemnifying party does
not or is not permitted to assume the defense of an action pursuant to Section
9(c) or in the case of the expense reimbursement obligation set forth in Section
9(a) and (b), the indemnification required by Section 9(a) and (b) hereof shall
be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills received or expenses, losses,
damages, or liabilities are incurred.

 

(e)                                  If the indemnification provided for in this
Section 9 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall (i) contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, claim, damage or
expense as is

 

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appropriate to reflect the proportionate relative fault of the indemnifying
party on the one hand and the indemnified party on the other (determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission relates to information supplied by the
indemnifying party or the indemnified party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission), or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, not only the
proportionate relative fault of the indemnifying party and the indemnified
party, but also the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other, as well as any other relevant
equitable considerations.  No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any indemnifying party who was not guilty
of such fraudulent misrepresentation.

 

(f)                                    Other Indemnification.  Indemnification
similar to that specified in the preceding subsections of this Section 9 (with
appropriate modifications) shall be given by the Company and each Holder of
Registrable Securities with respect to any required registration or other
qualification of securities under any federal or state law or regulation or
governmental authority other than the Securities Act.

 

10.                                 Miscellaneous

 

(a)                                  Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Oregon and
the United States of America, both substantive and remedial. Any judicial
proceeding brought against either of the parties to this agreement or any
dispute arising out of this Agreement or any matter related hereto may be
brought in the courts of the State of Oregon or in the United States District
Court for the District of Oregon and, by its execution and delivery of this
agreement, each party to this Agreement accepts the jurisdiction of such courts.
The foregoing consent to jurisdiction shall not be deemed to confer rights on
any person other than the parties to this Agreement.

 

(b)                                 Successors and Assigns.  Except as otherwise
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, Permitted Assigns, executors and administrators of
the parties hereto.  In the event the Company merges with, or is otherwise
acquired by, a direct or indirect subsidiary of a publicly traded company, the
Company shall condition the merger or acquisition on the assumption by such
parent company of the Company’s obligations under this Agreement.

 

(c)                                  Entire Agreement.  This Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof.

 

(d)                                 Notices, etc. All notices or other
communications which are required or permitted under this Agreement shall be in
writing and sufficient if delivered by hand, by facsimile transmission, by
registered or certified mail, postage pre-paid, by electronic mail, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:

 

If to the Company:

Bioject Medical Technologies Inc.

 

211 Somerville Road (Route 202 North)

 

Bedminster, New Jersey 07921

 

Attention: Chief Financial Officer

 

Facsimile: (908) 470-2800

 

e-mail: jgandolfo@bioject.com

 

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If to the Purchasers:

To each Purchaser at the address

 

set forth on Exhibit A

 

 

 

 

with a copy to:

LOF Partners, LLC

 

c/o Sanders Morris Harris Inc.

 

126 East 56th Street, 24th Floor

 

New York, New York 10022

 

Attention: Chief Investment Officer

 

Facsimile: (212)-419-3900

 

e-mail: james.gale@smhgroup.com

 

or at such other address as any party shall have furnished to the other parties
in writing.

 

(e)                                  Delays or Omissions.  No delay or omission
to exercise any right, power or remedy accruing to any Holder of any Registrable
Securities, upon any breach or default of the Company under this Agreement,
shall impair any such right, power or remedy of such Holder nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereunder occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring.  Any waiver, permit,
consent or approval of any kind or character on the part of any Holder of any
breach or default under this Agreement, or any waiver on the part of any Holder
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing.  All
remedies, either under this Agreement, or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.

 

(f)                                    Counterparts.  This Agreement may be
executed in any number of counterparts, each of which shall be enforceable
against the parties actually executing such counterparts, and all of which
together shall constitute one instrument.

 

(g)                                 Severability. In the case any provision of
this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

(h)                                 Amendments. The provisions of this Agreement
may be amended at any time and from time to time, and particular provisions of
this Agreement may be waived, with and only with an agreement or consent in
writing signed by the Company and by the holders of an 80% majority of the
number of shares of Registrable Securities outstanding as of the date of such
amendment or waiver. The Purchasers acknowledge that by the operation of this
Section 10(h), the holders of an 80% majority of the outstanding Registrable
Securities may have the right and power to diminish or eliminate all rights of
the Purchasers under this Agreement.

 

(i)                                     Limitation on Subsequent Registration
Rights.  After the date of this Agreement, the Company shall not, without the
prior written consent of the Holders of at least a majority of the Registrable
Securities then outstanding, enter into any agreement with any holder or
prospective holder of any securities of the Company that would grant such holder
registration rights senior to those granted to the Holders hereunder.

 

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This Registration Rights Agreement is hereby executed as of the date first above
written.

 

 

COMPANY:

 

 

 

BIOJECT MEDICAL TECHNOLOGIES

 

 INC.

 

 

 

 

 

By:

/s/ John P. Gandolfo

 

 

Its:

CFO

 

 

 

 

PURCHASERS:

 

 

 

LIFE SCIENCES OPPORTUNITIES FUND II, L.P.

 

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

 

 

 

By: LOF PARTNERS, LLC, general partner

 

 

 

 

 

By:

/s/ James C. Gale

 

 

Its: Manager

 

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