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                                                                    EXHIBIT 10.5

                       PREFERRED STOCK PURCHASE AGREEMENT

     This Preferred Stock Purchase Agreement is made and entered into as of the
22nd day of December, 1999, between Medi-Ject Corporation, a Minnesota
corporation (the "Company"), and Bio-Technology General Corp., a Delaware
corporation ("Investor").

     For good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged by the Company and the Investor, the Company and the
Investor agree as follows:

     1. Sale and Purchase of Securities. Subject to the terms and conditions
hereof, the Company agrees to sell to the Investor at the Closing (as defined
herein), and the Investor agrees to purchase from the Company at the Closing,
250 shares of the Company's Series B Convertible Preferred Stock (the "Preferred
Stock") with the rights and preferences provided in the Certificate of
Designation for such Preferred Stock attached hereto as Exhibit A (the
"Certificate of Designation"). The purchase price per share is $1,000. The
Preferred Stock is sometimes referred to herein as the "Securities."

     2. Closing. The closing of the purchase and sale of the Securities
hereunder shall take place at the offices of the Company, Minneapolis,
Minnesota, at 10:00 a.m., Minneapolis time, on December 22, 1999 or at such
other place(s) or different time(s) or day(s) as the Company in its discretion
shall determine (the "Closing"). At the Closing, the Company will deliver to the
Investor a certificate representing the number of shares of Preferred Stock and
the Investor shall cause to be delivered to the Company a wire transfer or check
payable to the Company in the amount of $250,000.

     3. Representations and Warranties by the Company. To induce the Investor to
enter into this Agreement and to purchase the Securities, the Company hereby
represents and warrants to the Investor as follows:

          (a) Disclosure. The Company has provided the Investor with all the
     information the Investor has requested in deciding whether to purchase the
     Securities and certain additional information, including, the Company's
     Annual Report on Form 10-K for the year ended December 31, 1998, the
     Company's Quarterly Reports on Form 10-Q for each of the first three
     quarters of 1999, the Company's Proxy Statement for its 1999 Annual Meeting
     of Shareholders, all other filings made by the Company with the Securities
     and Exchange Commission and the Company's 1999 press releases (the
     "Disclosed Information"). None of the Disclosed Information as of its date
     contained an untrue statement of a material fact or omitted to state a
     material fact necessary to make the statements therein, in light of the
     circumstances in which they were made, not misleading.

          (b) Organization, Good Standing, Etc. The Company is duly incorporated
     and validly existing as a corporation in good standing under the laws of
     the State of Minnesota, with power and authority to own its properties and
     conduct its business as now conducted and proposed to be conducted.
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          (c) Authorization and Enforceability. The Company has full legal
     power, right and authority to adopt the Certificate of Designation and to
     enter into this Agreement and the Registration Rights Agreement among the
     Company and the Investor, the form of which is attached hereto as Exhibit B
     (the "Registration Rights Agreement") and to issue the Securities and to
     carry out and perform its obligations under this Agreement and the
     Registration Rights Agreement. This Agreement, the Certificate of
     Designation and the Registration Rights Agreement have been duly
     authorized, executed and delivered on behalf of the Company and are the
     valid and binding obligations of the Company, enforceable in accordance
     with their respective terms and subject, as to enforcement, to applicable
     bankruptcy, insolvency, reorganization, moratorium and other laws affecting
     the rights of creditors generally, to the exercise of judicial discretion
     as to the availability of equitable remedies such as specific performance
     and injunction and, as to enforcement of the indemnification provisions, to
     limitations under applicable securities laws.

          (d) Defaults. The adoption of the Certificate of Designation and the
     execution of this Agreement and the Registration Rights Agreement and the
     consummation of the transactions herein and therein contemplated will not
     conflict with or result in any breach of, any of the terms or conditions
     of, or constitute a default or violation under, (i) the Articles of
     Incorporation, as amended, or Bylaws, as amended, of the Company, (ii) any
     indenture, agreement or other instrument to which the Company is now a
     party, or (iii) any law or any order, rule or regulation applicable to the
     Company of any court or of any federal or state regulatory body or
     administrative agency having jurisdiction over the Company or its property.

          (e) Valid Issuance of Preferred Stock. The Preferred Stock, when
     authorized, issued, sold and delivered in accordance with the terms hereof
     will be duly authorized, validly issued, fully paid and nonassessable. The
     issuance, sale and delivery of the Preferred Stock and the issuance of the
     Common Stock upon conversion of the Preferred Stock is not subject to any
     pre-emptive right, right of first refusal or similar right that has not
     been waived.

          (f) Approvals. The adoption of the Certificate of Designation and the
     execution and delivery of this Agreement and the Registration Rights
     Agreement and the consummation of the transactions contemplated hereby and
     thereby will not require the consent, approval, order or authorization of
     any governmental entity or any other person under any statute, law, rule,
     regulation, permit, license, agreement, indenture or other instrument to
     which the Company is a party or to which any of its properties are subject,
     and no declaration, filing or registration with any governmental entity is
     required or advisable by the Company in connection with the adoption of the
     Certificate of Designation and the execution and delivery of this Agreement
     and the Registration Rights Agreement, the consummation of the transactions
     contemplated hereby and thereby, or the performance by the Company of its
     respective obligations hereunder and thereunder, other than the filing of
     the Certificate of Designation with the Secretary of State of Minnesota,
     which filing will occur prior to Closing, filings which may be required
     under state blue sky laws, and, with respect to the Registration Rights
     Agreement, the registration of the shares covered thereby with the
     Securities and Exchange Commission.

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          (g) Litigation. Other than the current arbitration with the Investor,
     there is no action, suit, investigation, arbitration or proceeding pending
     or, to the best knowledge of the Company, threatened against or affecting
     the Company, or any of its properties or rights (including, without
     limitation, no charge of patent and/or trademark infringement), by or
     before any governmental entity, or any basis in fact therefor known to the
     Company, against or involving the Company or any of its officers, directors
     or employees (in their capacity as such), assets, business or products,
     whether at law or in equity.

          (h) Compliance with Laws. The Company has complied in all material
     respects with all applicable laws (including rules, regulations, codes,
     plans, injunctions, judgments, orders, decrees, rulings and charges
     thereunder) of any governmental entity relating to or affecting the
     operation, conduct or ownership of its property or business, and no action,
     suit, proceeding, hearing, investigation, charge, complaint, claim, demand
     or notice has been filed or commenced or, to the best knowledge of the
     Company, threatened against it alleging any failure so to comply.

          (i) No Misleading Statements. This Agreement and the Disclosed
     Information as a whole do not include any untrue statement of a material
     fact and do not omit to state any material fact necessary to make the
     statements contained herein or therein, in light of the circumstances under
     which they were made, not misleading. There is no fact known to the Company
     which has a material adverse effect on the business, prospects, results of
     operations, financial condition or assets of the Company or in the future
     may (so far as the Company can now reasonably foresee) have such a material
     adverse effect which has not been disclosed to the Investor in writing.

     4. Representations of the Investor. The Investor represents that:

          (a) Investment Intent. The Securities being acquired by the Investor
     are being purchased for investment for the Investor's own account and not
     with the view to, or for resale in connection with, any distribution or
     public offering thereof. The Investor understands that the Securities have
     not been registered under the Securities Act of 1933, as amended (the
     "Securities Act") or any state securities laws by reason of their
     contemplated issuance in a transaction exempt from the registration
     requirements of the Securities Act and applicable state securities laws,
     and that the reliance of the Company upon these exemptions is predicated in
     part upon this representation by the Investor. The Investor further
     understands that the Securities, and the shares of the Company's common
     stock issuable upon conversion or exercise thereof, may not be transferred
     or resold without (i) registration under the Securities Act and applicable
     state securities laws, or (ii) an exemption from the requirements of the
     Securities Act and applicable state securities laws.

          (b) Location of Principal Office, Qualification as an Accredited
     Investor, Etc. The state in which the Investor's principal office is
     located is the state set forth in the Investor's address on the signature
     page hereof. The Investor is an "accredited investor" as defined in Rule
     501 of Regulation D promulgated under the Securities Act. The Investor
     acknowledges receipt of the Disclosed Information and that the Company has
     made available to the Investor at a

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     reasonable time prior to the execution of this Agreement the opportunity to
     ask questions and receive answers concerning the business and affairs of
     the Company and the terms and conditions of the sale of Securities
     contemplated by this Agreement and to obtain any additional information
     (which the Company possessed or could acquire without unreasonable effort
     or expense) to verify the accuracy of information furnished to the
     Investor. The Investor (i) understands that an investment in the Securities
     involves a high degree of risk; (ii) is able to bear the loss of the
     Investor's entire investment in the Securities without any material adverse
     effect on such Investor's business, operations or prospects, and (iii) has
     such knowledge and experience in financial and business matters that such
     Investor is capable of evaluating the merits and risks of the investment to
     be made pursuant to this Agreement.

          (c) Acts and Proceedings. This Agreement has been duly authorized by
     all necessary action on the part of the Investor, has been duly executed
     and delivered by the Investor, and is a valid and binding agreement of the
     Investor.

     5. Conditions of the Investor's Obligation. The obligation to purchase and
pay for the Securities at the Closing is subject to the fulfillment prior to or
on the Closing date of the conditions set forth in this Section 5.

          (a) Representations and Warranties. The representations and warranties
     of the Company under this Agreement shall be true on and as of the Closing
     date with the same effect as though made on and as of the Closing date.

          (b) Compliance with Agreement. The Company shall have performed and
     complied with all agreements or conditions required by this Agreement to be
     performed and complied with by it prior to or as of the Closing date.

          (c) File Certificate of Designation. The Company shall have filed the
     Certificate of Designation with the Secretary of State of the State of
     Minnesota and such certificate shall have been accepted and duly filed by
     such Secretary's office.

          (d) Execution of Registration Rights Agreement. The Company shall have
     executed and delivered to the Investor the Registration Rights Agreement
     attached hereto as Exhibit B.

     6. Conditions of the Company's Obligations. The obligation of the Company
to sell, transfer and deliver the Securities at the Closing is subject to the
fulfillment prior to or on the Closing date of the conditions set forth in this
Section 6.

          (a) Representations and Warranties. The representations and warranties
     of the Investor under this Agreement shall be true on and as of the Closing
     date with the same effect as though made on and as of the Closing date.

          (b) Compliance with Agreement. The Investor shall have performed and
     complied with all agreements or conditions required by this Agreement to be
     performed and complied with by it prior to or as of the Closing date.

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          (c) File Certificate of Designation. The Company shall have filed the
     Certificate of Designation with the Secretary of State of the State of
     Minnesota and such certificate shall have been accepted and duly filed by
     such Secretary's office.

     7. Company's Covenant. The Company hereby agrees to use its best efforts to
cause the conditions set forth in Section 4(a)(i) and (ii) to the Certificate of
Designation to be fulfilled as promptly as reasonably possible and in no event
later than one year from the date hereof. In the event the Company does not
cause the conditions set forth in Section 4(a)(i) and (ii) to the Certificate of
Designation to be fulfilled by one year from the date hereof, the Company shall
immediately redeem all the Preferred Stock at a price per share equal to 105% of
the Series B Liquidation Preference (as defined in the Certificate of
Designation).

     8. Restriction on Transfer of Preferred Stock and Shares.

          (a) Legend. Each share of Preferred Stock and each certificate
     representing shares of the Company's common stock issued pursuant to the
     transactions contemplated hereby shall be endorsed with a legend in
     substantially the form which follows:

          "The securities represented by this certificate may not be transferred
          without (i) the opinion of counsel satisfactory to this corporation
          that such transfer may lawfully be made without registration under the
          Securities Act of 1933, as amended, and all applicable state
          securities laws, or (ii) such registration."

     9. Miscellaneous.

          (a) Changes, Waivers, Etc. Neither this Agreement nor any provisions
     hereof may be changed, waived, discharged or terminated orally, but only by
     a statement in writing, signed by the party against which enforcement of
     the change, waiver, discharge or termination is sought.

          (b) Notices. All notices, requests, consents and other communications
     required or permitted hereunder shall be in writing and shall be delivered,
     or mailed first-class postage prepaid, registered or certified mail or
     shall be sent by facsimile transmission followed by mailed copy to the
     address listed on the signature page hereof and such notices and other
     communications shall for all purposes of this Agreement be treated as being
     effective or having been given if delivered personally, if sent by mail,
     when received, or, if sent by facsimile, upon the sender's receipt of
     confirmation from its facsimile machine of transmission.

          (c) Headings. The headings of the sections of this Agreement have been
     inserted for convenience of reference only and do not constitute a part of
     this Agreement.

          (d) Choice of Law. This Agreement shall be governed by and construed
     and enforced in accordance with the laws of the State of Minnesota without
     regard to the principles of conflicts of law thereof.

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          (e) Counterparts. This Agreement may be executed at different times
     and in two or more counterparts, each of which shall be deemed an original,
     but all of which together shall constitute one and the same instrument.

          (f) Parties in Interest. All the terms and provisions of this
     Agreement shall be binding upon and inure to the benefit of and be
     enforceable by the respective successors and assigns of the parties hereto,
     whether so expressed or not, and, in particular, shall inure to the benefit
     of and be enforceable by the holder or holders from time to time of any of
     the Securities.

          (g) Entire Agreement. This Agreement, including and incorporating all
     Exhibits and Schedules hereto, constitutes and contains the entire
     agreement and understanding of the parties regarding the subject matter of
     this Agreement and supersedes any and all prior negotiations,
     correspondence, understandings and agreements, written or oral, among the
     parties with respect to the subject matter hereof.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed personally or by their duly authorized representatives as of the date
indicated above.

                                       MEDI-JECT CORPORATION

                                       By: /s/ Franklin Pass
                                           -------------------------------------
                                           Franklin Pass, its President

                                       Address: 161 Cheshire Ln. #100
                                                --------------------------------
                                                Minneapolis, MN 55441
                                                --------------------------------

                                                --------------------------------

                                       INVESTOR:

                                       BIO-TECHNOLOGY GENERAL CORP.

                                       By: /s/ S. Fass
                                           -------------------------------------
                                       Its: CEO
                                            ------------------------------------
                                       Address: 70 Wood Ave. S.
                                                --------------------------------
                                                Iselin, NJ 08830
                                                --------------------------------

                                                --------------------------------

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                                    EXHIBIT A

             CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
                      SERIES B CONVERTIBLE PREFERRED STOCK

                                       OF

                              MEDI-JECT CORPORATION

     The undersigned officers of Medi-Ject Corporation, a corporation organized
and existing under the Minnesota Business Corporation Act (the "Corporation"),
do hereby certify that, pursuant to authority conferred by the Second Amended
and Restated Articles of Incorporation of the Corporation, as amended (the
"Articles of Incorporation"), and pursuant to the provisions of Section 302A.401
of the Minnesota Business Corporation Act, the Board of Directors of the
Corporation adopted a resolution adopting a Certificate of Designations,
Preferences and Rights of Series B Convertible Preferred Stock (this
"Certificate of Designations") providing for certain designations, powers,
number, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of 250
shares of Series B Convertible Preferred Stock, $.01 par value per share, which
resolution is as follows:

     RESOLVED: That pursuant to Article 3 of the Second Amended and Restated
Articles of Incorporation, as amended, of this Corporation, the Board of
Directors hereby establishes the following series of Preferred Stock, $.01 par
value per share (the "Series B Preferred Stock"), of the Corporation having the
designations, powers, number, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or restrictions
thereof set forth below:

     1. Designation. 250 shares of the Series B Preferred Stock shall be
designated and known as the "Series B Convertible Preferred Stock."

     2. Dividend Provisions.

          a. The Series B Convertible Preferred Stock will not accrue a
     dividend. Dividends will be payable only if, as and when determined by the
     Corporation's Board of Directors.

          b. Notwithstanding anything contained in this Certificate of
     Designations to the contrary, so long as any shares of Series B Convertible
     Preferred Stock remain outstanding, (i) no dividends shall be declared or
     payable with respect to any outstanding shares of Common Stock of the
     Corporation or shares of any other class of shares of the Corporation,
     except for the Series A Convertible Preferred Stock; and (ii) except for
     repurchases or redemptions made in good faith by the Corporation in
     consideration for the exercise of options issued under the Corporation's
     stock option plans existing on the date hereof and except for redemptions
     of Series A Convertible Preferred Stock, the Corporation shall not redeem,
     repurchase or otherwise

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     acquire shares of Common Stock of the Corporation or shares of any other
     class of shares of the Corporation.

     3. Liquidation Preference.

          a. Subject to the rights of the holders of Series A Convertible
     Preferred Stock, in the event of any liquidation, dissolution or winding-up
     of the affairs of the Corporation, whether voluntary or involuntary
     (collectively, a "Liquidation"), before any payment of cash or distribution
     of other property shall be made to the holders of the Common Stock (the
     "Common Shareholders") or any other class or series of stock subordinate in
     Liquidation Preference to the Series B Convertible Preferred Stock, the
     holders of the Series B Convertible Preferred Stock shall be entitled to
     receive out of the assets of the Corporation legally available for
     distribution to its shareholders, the Original Purchase Price per share (as
     appropriately adjusted for any combinations or divisions or similar
     recapitalizations affecting the Series B Convertible Preferred Stock after
     issuance) plus any declared and unpaid dividends thereon (the "Series B
     Liquidation Preference"). As used herein, the "Original Purchase Price" is
     $1,000 per share.

          b. If, upon any Liquidation, the assets of the Corporation available
     for distribution to its shareholders shall be insufficient to pay the
     holders of the Series B Convertible Preferred Stock the full amounts to
     which they shall be entitled, subject to the rights of the holders of the
     Series A Convertible Preferred Stock, the holders of the Series B
     Convertible Preferred Stock shall share ratably in any distribution of
     assets in proportion to the respective amounts which would be payable to
     them in respect of the shares held by them if all amounts payable to them
     in respect of such were paid in full pursuant to subsection 3(a), above.

          c. After the distributions described in subsection (a), above, have
     been paid, the holders of the Series B Convertible Preferred Stock shall
     not be entitled to any further participation in any distribution of assets
     of the Corporation.

          d. For purposes of this Section 3:

               (i) a liquidation, dissolution or winding up of the Corporation
          shall be deemed to be occasioned by, or to include,

                    (A) the acquisition of the Corporation by another entity 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 Corporation); except,
               if (i) the Corporation's shareholders of record as constituted
               immediately prior to such acquisition or sale will, immediately
               after such acquisition (by virtue of securities issued as
               consideration for the Corporation's acquisition) hold at least
               50% of the voting power of the surviving or acquiring entity or
               (ii) if a majority in interest of the Series B Convertible Series
               B Preferred Stock, voting as a class, shall have approved such
               reorganization, merger or consolidation; or

                    (B) a sale of all or substantially all of the assets of the
               Corporation.

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               (ii) Upon the occurrence of any of the events described in the
          foregoing subsection (3)(d)(i), if the consideration received by the
          Corporation is other than cash, its value will be deemed its fair
          market value, which shall be valued as follows:

                    (A) if traded on a securities exchange or through Nasdaq,
               the average of the closing sale prices of the securities on such
               exchange for the 20 consecutive trading days ending with the day
               which is two trading days prior to the closing of such
               transaction (the "Market Price");

                    (B) if actively traded over-the-counter, the average of the
               closing bid or sale prices (whichever is applicable) over the 30
               day period ending three days prior to the closing; or

                    (C) if there is no active public market, the fair market
               value thereof, as mutually determined by the Corporation and the
               holders of at least a majority of the voting power of all then
               outstanding shares of Series A Convertible Preferred Stock.

          The method of valuation of securities subject to restrictions on free
          marketability (other than restrictions arising solely by virtue of a
          shareholder's status as an affiliate or former affiliate) shall be to
          make an appropriate discount from the market value determined as above
          in (ii), (A), (B) or (C) to reflect the approximate fair market value
          thereof, as mutually determined by the Corporation and the holders of
          at least a majority of the then outstanding shares of the Series B
          Convertible Preferred Stock.

               (iii) In the event the requirements of this subsection 3(d) are
          not complied with, the Corporation shall forthwith either:

                    (A) cause such closing to be postponed until such time as
               the requirements of this Section 3 have been complied with; or

                    (B) cancel such transaction, in which event the rights,
               preferences and privileges of the holders of the Series B
               Convertible Preferred Stock shall revert to and be the same as
               such rights, preferences and privileges existing immediately
               prior to the date of the first notice referred to in subsection
               3(e) below.

          e. The Corporation shall give each holder of record of Series B
     Convertible Preferred Stock written notice of any impending transaction
     described under subsection 3(d)(i) above, not later than 20 days prior to
     the shareholders' meeting called to approve such transaction, or 20 days
     prior to the closing of such transaction, whichever is earlier, and shall
     also notify such holders in writing of the final approval of such
     transaction. The first of such notices shall describe the material terms
     and conditions of the impending transaction and the provisions of this
     Section 3, and the Corporation shall thereafter give such holders prompt
     notice of any material changes. The transaction shall in no event take
     place sooner than 20 days after the Corporation has given the first notice
     provided for herein or sooner than 10 days after the Corporation has given
     notice of any material changes provided for herein; provided, however,

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     that such periods may be shortened upon the written consent of the holders
     of Series B Convertible Preferred Stock that are entitled to such notice
     rights or similar notice rights and that represent at least a majority of
     the then outstanding shares of Series B Convertible Preferred Stock.

     4. Conversion.

          a. Optional Conversion. Each share of Series B Convertible Preferred
     Stock shall at the option of the holder be convertible into fully paid and
     nonassessable shares of Common Stock at any time after the date that all of
     the following have occurred: (i) the Corporation has filed an amendment to
     its Articles of Incorporation increasing the authorized Common Stock from
     3,400,000 shares to at least 10,000,000 shares (the "Amendment"); and (ii)
     the Corporation has obtained any necessary approvals under the Nasdaq
     listing requirements. The events described in paragraphs (i) and (ii) above
     are referred to herein as the "Permissible Conversion Events." All
     outstanding shares of Series B Convertible Preferred Stock shall convert
     into shares of Common Stock at the Conversion Price in effect on the date
     the holder gives written notice of conversion and delivers certificates
     representing the shares to be so converted (the "Optional Conversion
     Date"), provided that if NASDAQ Rule 4460(I)(1)(d)(ii) would prevent
     conversion in full without stockholder approval, then the holder shall only
     be entitled to convert to the extent permitted by such rule and the
     Corporation shall obtain any requisite stockholder approval necessary to
     allow such conversion.

          b. Automatic Conversion. Each share of Series B Convertible Preferred
     Stock shall automatically convert into fully paid and nonassessable shares
     of Common Stock on the later of (i) the date of the occurrence of the
     Permissible Conversion Events; or (ii) June 30, 2001 (such later date
     referred to herein as the "Automatic Conversion Date"), provided that if
     NASDAQ Rule 4460(I)(1)(d)(ii) would prevent conversion in full without
     stockholder approval, then the automatic conversion shall occur to the
     extent permitted by such rule and the Corporation shall obtain any
     requisite stockholder approval necessary to allow such conversion in full.

          c. The number of shares of Common Stock to be issued upon a conversion
     under this Section 4 shall be determined by valuing each issued and
     outstanding share of Series B Convertible Preferred Stock at the Series B
     Liquidation Preference and converting such share into such number of shares
     of Common Stock as may be acquired at such value where each share of Common
     Stock is valued at the conversion price applicable to such share (the
     "Conversion Price"), determined as hereafter provided, in effect on the
     Optional Conversion Date, with respect to an optional conversion, and the
     Automatic Conversion Date, with respect to an automatic conversion. The
     Conversion Price per share of Common Stock on any day for purposes of a
     conversion under this Section 4 shall be equal to the lesser of (i) the
     average of the closing prices per share of the Corporation's Common Stock
     for the twenty (20) consecutive trading days immediately preceding the
     Optional Conversion Date, with respect to an optional conversion, and the
     Automatic Conversion Date, with respect to an automatic conversion, or (ii)
     $2.50 per share (subject to adjustment for stock splits, stock dividends
     and similar actions). Upon conversion pursuant to this Section 4, holders
     of Series B Convertible Preferred Stock shall surrender the certificate or
     certificates therefor, duly endorsed, at the office of the Corporation or

                                      A-4
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     of any transfer agent for the Series B Convertible Preferred Stock and
     shall state therein the name or names in which the certificate or
     certificates for shares of Common Stock are to be issued. The Corporation
     shall, as soon as practicable thereafter, issue and deliver at such office
     to such holder of Series B Convertible Preferred Stock, or to the nominee
     or nominees of such holder, a certificate or certificates for the number of
     shares of Common Stock to which such holder shall be entitled as aforesaid.
     Such conversion shall be deemed to have been made immediately prior to the
     close of business on the Optional Conversion Date, with respect to an
     optional conversion, and the Automatic Conversion Date, with respect to an
     automatic conversion, and the person or persons entitled to receive the
     shares of Common Stock issuable upon such conversion shall be treated for
     all purposes as the record holder or holders of such shares of Common Stock
     as of such date.

     5. Redemption. The Corporation shall have the right, at any time after the
occurrence of both Permissible Conversion Events and prior to the conversion of
such shares into shares of Common Stock as provided in Section 4 above, to
redeem any or all of the issued and outstanding shares of Series B Convertible
Preferred Stock for cash at a price per share equal to the Series B Liquidation
Preference. The Corporation shall give the holder not less than 30 days and not
more than 60 days prior notice of such redemption, and the holder shall be
entitled to convert any or all of the shares of Series B Convertible Preferred
Stock prior to the date of redemption.

     6. Other Distributions. In the event the Corporation shall declare a
distribution payable in securities of other persons, evidences of indebtedness
issued by the Corporation or other persons or assets (excluding cash dividends),
then, in each such case for the purpose of this Section 6, the holders of the
Series B Convertible Preferred Stock shall be entitled, upon conversion of the
Series B Convertible Preferred Stock, to a proportionate share of any such
distribution as though they were the holders of the number of shares of Common
Stock of the Corporation into which their shares of Series B Convertible
Preferred Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.

     7. Recapitalization. If at any time or from time to time there shall be a
recapitalization of the Common Stock (other than a subdivision, combination or
merger or sale of assets transaction provided for elsewhere in Section 3 or
Section 4) provision shall be made so that the holders of the Series B
Convertible Preferred Stock shall thereafter be entitled to receive upon
conversion of the Series B Convertible Preferred Stock the number of shares of
stock or other securities or property of the Corporation or otherwise, to which
a holder of Common Stock deliverable upon conversion would have been entitled on
such recapitalization. In any such case, appropriate adjustment shall be made in
the application of the provisions of Section 4 with respect to the rights of the
holders of the Series B Convertible Preferred Stock after the recapitalization
to the end that the provisions of Section 4 shall be applicable after that event
as nearly equivalent as may be practicable.

     8. No Impairment. The Corporation will not, by amendment of its Articles of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to

                                      A-5
<PAGE>

avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of Section 4 and in the taking
of all such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series B Convertible Preferred Stock
against impairment.

     9. No Fractional Common Shares and Certificate as to Adjustments. No
fractional shares of Common Stock shall be issued upon the conversion of any
share or shares of the Series B Convertible Preferred Stock, and the number of
shares of Common Stock to be issued shall be rounded to the nearest whole share.

     10. Notices. Any notice required by the provisions hereof to be given to
the holders of shares of Series B Convertible Preferred Stock shall be deemed
given on the date of service if served personally on the party to whom notice is
to be given, on the date of transmittal of services via telecopy to the party to
whom notice is to be given and five (5) days after mailing if mailed by first-
class mail to the address of the holder appearing on the books of the
Corporation.

     11. Voting Rights.

          a. Unless otherwise required by law, holders of Series B Convertible
     Preferred Stock will not be entitled to vote on any matter; provided,
     however, that the Corporation shall take no action that would adversely
     affect the holders of Series B Convertible Preferred Stock relative to the
     holders of any other class of the Corporation's securities (including,
     without limitation, by issuing any securities having a liquidation or
     dividend preference senior to, or pari passu with, the Series B Convertible
     Preferred Stock) without the prior approval of the holders of a majority of
     such Series B Convertible Preferred Stock voting as a separate class
     pursuant to subsection b of this Section 11.

          b. In any vote by the holders of the Series B Convertible Preferred
     Stock acting as a class, each holder of Series B Convertible Preferred
     Stock shall be entitled to one vote for each share of Series B Convertible
     Preferred Stock.

     12. Status of Converted or Redeemed Stock. In the event any shares of
Series B Convertible Preferred Stock shall be converted pursuant to Section 4
hereof or redeemed pursuant to Section 5 hereof, the shares so converted or
redeemed shall be canceled and shall not be reissuable by the Corporation.

     13. Amendment. Notwithstanding anything contained herein to the contrary,
any provision of this Certificate of Designations may be modified or waived with
the consent of the Company and the holders of a majority in interest of the
Series B Convertible Preferred Stock.

                                      A-6
<PAGE>

     IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations, Preferences and Rights to be duly executed to this 30th day of
December, 1999.

                                       MEDI-JECT CORPORATION

                                       By: /s/ Franklin Pass
                                           -------------------------------------
                                       Name: Franklin Pass
                                             -----------------------------------
                                       Title: Chairman
                                              ----------------------------------

                                      A-7
<PAGE>

                                    EXHIBIT B

                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

         This Registration Rights Agreement is made and entered into as of the
22nd day of December, 1999, by and among Medi-Ject Corporation, a Minnesota
corporation (the "Company") and Bio-Technology General Corp., a Delaware
corporation (the "Investor").

                                    RECITALS

     A. The Investor and the Company have entered into that certain Preferred
Stock Purchase Agreement, dated December 22, 1999 (the "Purchase Agreement").

     B. It is a condition to the transactions contemplated in the Purchase
Agreement that the Company provide the registration rights provided herein and
the parties hereto desire to provide for such rights on the terms and conditions
contained herein.

     NOW, THEREFORE, in consideration of the premises and covenants contained
herein, the parties hereto agree as follows:

     1. Defined Terms. Unless otherwise noted, all capitalized terms used herein
shall have the meanings afforded them in the Purchase Agreement.

     2. Registration Rights. The Company covenants and agrees as follows:

          2.1 Demand Registration. At any time beginning one year from the date
     hereof, on one occasion only, upon request by at least 50% of the
     registered holders of common stock acquired upon conversion of the
     Preferred Stock (such shares of common stock referred to herein as the
     "Registrable Stock"), the Company will promptly take all necessary steps to
     register or qualify the sale of such shares by the holders thereof on the
     applicable registration statement form under the Securities Act of 1933 and
     such state laws as such holders may reasonably request; provided, however,
     that (i) the Company shall not be required to include any such shares of
     Common Stock in any such registration for any holder who is able to sell
     all shares of Common Stock owned by such holder during the three-month
     period beginning on the date such registration is requested by such holder,
     without compliance with the registration requirements of the Securities Act
     pursuant to Rule 144(k) under the Securities Act; and (ii) the Company may,
     on not more than one occasion, delay the filing of any registration
     statement requested pursuant to this Section 2.1 to a date not more than 90
     days following the date of such request if in the reasonable opinion of the
     Company at the time of such request such a delay is necessary in order not
     to significantly adversely affect financing efforts then underway at the
     Company. The costs and expenses directly related to any registration
     requested pursuant to this section, including but not limited to legal fees
     of the Company's counsel, audit fees, printing expense, filing fees and
     fees and expenses relating to qualifications under state securities or blue
     sky laws incurred by the Company shall be borne entirely by the Company;
     provided, however, that the persons for whose account the securities
     covered by such registration are sold shall bear the underwriting
     commissions applicable to their

                                      B-1
<PAGE>

     shares and fees of their legal counsel. If the holders of Registrable Stock
     are the only persons whose shares are included in the registration pursuant
     to this section, such holders shall bear the expense of inclusion of
     audited financial statements in the registration statement which are not
     dated as of the Company's normal fiscal year or are not otherwise prepared
     by the Company for its own business purposes. The Company shall keep
     effective and maintain any registration, qualification, notification or
     approval specified in this paragraph for such period as may be necessary
     for the holders to dispose of such securities (not to exceed 180 days) and,
     from time to time shall amend or supplement, at the holder's expense, the
     prospectus or offering circular used in connection therewith to the extent
     necessary in order to comply with applicable law. The managing underwriter
     of an offering registered pursuant to this Section 2.1, if any, shall be
     selected by the holders of a majority of the Registrable Stock for which
     registration has been requested and shall be reasonably acceptable to the
     Company. Without the written consent of the holders of a majority of the
     Registrable Stock for which registration has been requested pursuant to
     this Section 2.1, neither the Company nor any other holder of securities of
     the Company may include securities in such registration if in the good
     faith judgment of the managing underwriter of such public offering the
     inclusion of such securities would interfere with the successful marketing
     of the Registrable Stock.

          2.2 Registration--General Provisions. In connection with the
     registration of the Registrable Stock under the Securities Act, the Company
     will:

               (a) prepare and file with the Commission a registration statement
          with respect to such securities and use its best efforts to cause such
          registration statement to become effective as soon as possible after
          the date it is filed and keep the prospectus which is a part of such
          registration statement current until the earlier of the date on which:
          (i) all such shares have been sold, or (ii) 180 days after the date it
          is declared effective by the Commission (the "Effectiveness Period");

               (b) prepare and file with the Commission such amendments to such
          registration statement and supplements to the prospectus contained
          therein as may be necessary to keep such registration statement
          effective for the Effectiveness Period referred to in Section 2.2(a)
          above;

               (c) at the request of the Investor, provide the Investor's
          counsel (referred to herein as "Investor's Counsel") with reasonable
          opportunities to review and comment on, and otherwise participate in,
          the preparation of such registration statement;

               (d) furnish to the Investor participating in such registration
          and to the underwriters of the securities being registered, if any,
          such reasonable number of copies of the registration statement,
          preliminary prospectus, final prospectus and such other documents as
          the Investor and underwriters may reasonably request in order to
          facilitate the public offering of such securities;

               (e) use its best efforts to register or qualify the securities
          covered by such registration statement under such state securities or
          blue sky laws of such jurisdictions as the Investor may reasonably
          request in writing within 30 days following the original filing of
          such

                                      B-2
<PAGE>

          registration statement, except that the Company shall not for any
          purpose be required to execute a general consent to service of process
          (which shall not include a "Uniform Consent to Service of Process" or
          other similar consent to service of process which relates only to
          actions or proceedings arising out of or in connection with the sale
          of securities, or out of a violation of the laws of the jurisdiction
          requesting such consent) or to qualify to do business as a foreign
          corporation in any jurisdiction wherein it is not so qualified;

               (f) notify the Investor, promptly after it shall receive notice
          thereof, of the time when such registration statement has become
          effective or a supplement to any prospectus forming a part of such
          registration statement has been filed with the Commission;

               (h) notify the Investor promptly of any request by the Commission
          for the amending or supplementing of such registration statement or
          prospectus or for additional information;

               (i) provide Investor with customary opinions and accountants cold
          comfort letter;

               (h) prepare and file with the Commission, promptly upon the
          request of the Investor, any amendments or supplements to such
          registration statement or prospectus which, in the opinion of
          Investor's Counsel, if any (and concurred in by counsel for the
          Company), is required under the Securities Act or the rules and
          regulations promulgated thereunder in connection with the distribution
          of the shares of the Company's common stock by the Investor;

               (i) prepare and promptly file with the Commission and promptly
          notify the Investor of the filing of such amendment or supplement to
          such registration statement or prospectus as may be necessary to
          correct any statements or omissions if, at the time when a prospectus
          relating to such securities is required to be delivered under the
          Securities Act, any event shall have occurred as the result of which
          any such prospectus or any other prospectus as then in effect would
          include an untrue statement of a material fact or omit to state any
          material fact necessary to make the statements therein, in the light
          of the circumstances in which they were made, not misleading;

               (j) advise the Investor, and the Investor's Counsel, if any,
          promptly after it shall receive notice or obtain knowledge thereof, of
          the issuance of any stop order by the Commission suspending the
          effectiveness of such registration statement or the initiation or
          threatening of any proceeding for that purpose and promptly use its
          best efforts to prevent the issuance of any stop order or to obtain
          its withdrawal if such stop order should be issued;

               (k) Notwithstanding the foregoing, following the effectiveness of
          such registration statement, the Company may, at any time, suspend the
          effectiveness of such registration statement for up to no longer than
          ninety (90) days, as appropriate (a "Suspension Period"), by giving
          notice to the Investor, if (i) the Company, with the advice of its
          counsel, shall have determined that the Company may be required to
          disclose any material corporate development or (ii) the Company shall
          be involved in an underwritten public offering of its

                                      B-3
<PAGE>

          securities. The Company will use its best efforts to minimize the
          length of any Suspension Period. Further, no more than one 90-day
          Suspension Period or multiple Suspension Periods which do not exceed
          90 days in the aggregate may occur in any 12-month period and the
          Effectiveness Period referred to in Section 2.2(a) shall be extended
          by the number of days such registration is subject to any Suspension
          Period. The Investor agrees that, upon receipt of any notice from the
          Company of a Suspension Period, it will not sell (subject to the
          limitations on the Company set forth above) any Registrable Stock
          pursuant to such registration statement until (i) such Investor is
          advised in writing by the Company that the use of the applicable
          prospectus may be resumed, (ii) the Investor has received copies of
          any additional or supplemental or amended prospectus, if applicable,
          and (iii) the Investor has received copies of any additional or
          supplemental filings which are incorporated or deemed to be
          incorporated by reference in such prospectus.

          2.3 Registration Expenses. The Company shall pay all Registration
     Expenses (as defined below) in connection with the inclusion of shares of
     the Company's common stock in any registration statement, or application to
     register or qualify such shares under state securities laws, filed by the
     Company hereunder, other than as set forth herein. For purposes of this
     Agreement, the term "Registration Expenses" means the filing fees payable
     to the Commission, any state agency and the NASD; the fees and expenses of
     the Company's legal counsel and independent certified public accountants in
     connection with the preparation and filing of the registration statement
     (and all amendments and supplements thereto) with the Commission; and all
     expenses relating to the printing of the registration statement,
     prospectuses and various agreements executed in connection with the
     registration statement. Notwithstanding the foregoing, the Investor will
     pay the fees and expenses of any legal counsel the Investor may engage, as
     well as the Investor's share of any custodian fees or commission or
     discounts or transfer taxes which may be payable to any underwriter and any
     other expenses incurred by the Investor not expressly included herein.

     3. Indemnification; Contribution.

          (a) To the extent permitted by law, the Company will indemnify the
     Investor, each of its officers, directors, members and partners, and each
     person controlling such Investor, with respect to which registration,
     qualification or compliance has been effected pursuant to this Agreement,
     each director and controlling person of the Company and each officer of the
     Company who signed the registration statement, and each underwriter, if
     any, and each person who controls any underwriter, against all claims,
     losses, damages and liabilities (or actions, proceedings or settlements, if
     such settlements are effected with the written consent of the Company, in
     respect thereof) arising out of or based on any untrue statement (or
     alleged untrue statement) of a material fact contained in any prospectus,
     offering circular or other document (including any related registration
     statement, notification of the like) incident to any such registration,
     qualification or compliance, or any omission (or alleged omission) to state
     therein a material fact required to be sated therein or necessary to make
     the statements therein not misleading, or any violation by the Company of
     the Securities Act or the Exchange Act or any rule or regulation thereunder
     applicable to the Company and relating to action or inaction required of
     the Company in connection with any such registration, qualification or
     compliance,

                                      B-4
<PAGE>

     and will reimburse the Investor, each of its officers, directors, members
     and partners, and each person controlling such Investor, each such
     director, controlling person and officer, each such underwriter and each
     person who controls any such underwriter, for any legal and any other
     expenses reasonably incurred in connection with investigating and defending
     or settling any such claim, loss, damage, liability, action or proceeding;
     provided, however, that the Company will not be liable in any such case to
     the extent that any such claim, loss, damage, liability or expense arises
     out of or is based on any untrue statement or omission made in such
     registration statement, prospectus, offering circular or other document in
     reliance upon and in conformity with written information furnished to the
     Company by such Investor or underwriter and stated to be specifically for
     use therein.

          (b) To the extent permitted by law, the Investor will indemnify the
     Company, each director, officer and controlling person of the Company and
     each officer of the Company who signed the registration statement, and each
     underwriter, if any, and each person who controls any underwriter, against
     all claims, losses, damages and liabilities (or actions, proceedings or
     settlements, if such settlements are effected with the written consent of
     the Investor, in respect thereof) arising out of or based on any untrue
     statement (or alleged untrue statement) of a material fact contained in any
     prospectus, offering circular or other document in which the Investor's
     shares are included (including any related registration statement,
     notification of the like) incident to any such registration, qualification
     or compliance, or any omission (or alleged omission) to state therein a
     material fact required to be stated therein or necessary to make the
     statements therein not misleading in each case to the extent that any such
     claim, loss, damage, liability or expense arises out of or is based on any
     untrue statement or omission made in such registration statement,
     prospectus, offering circular or other document in reliance upon and in
     conformity with written information furnished to the Company by such
     Investor and stated to be specifically for use therein, or any violation by
     the Investor of the Securities Act or the Exchange Act or any rule or
     regulation thereunder applicable to the Investor and relating to action or
     inaction required of the Investor in connection with any such registration,
     qualification or compliance, and will reimburse the Company, each of its
     officers, directors, and each person controlling the Company, each such
     underwriter and each person who controls any such underwriter, for any
     legal and any other expenses reasonably incurred in connection with
     investigating and defending or settling any such claim, loss, damage,
     liability, action or proceeding.

          (c) The party entitled to indemnification under this Section 3 (the
     "Indemnified Party") shall give notice to the party required to provide
     indemnification (the "Indemnifying Party") promptly after such Indemnified
     Party has actual knowledge of any claim as to which indemnity may be
     sought, and shall permit the Indemnifying Party to assume the defense of
     any such claim or any litigation resulting therefrom, provided that counsel
     for the Indemnifying Party, who shall conduct the defense of such claim or
     any litigation resulting therefrom, shall be approved by the Indemnified
     Party (whose approval shall not unreasonably be withheld), and the
     Indemnified Party may participate in such defense at such party's expense,
     and provided further that the failure of any Indemnified Party to give
     notice as provided herein shall not relieve the Indemnifying Party of its
     obligations under this Agreement, unless such failure to notify materially
     adversely affects the Indemnifying Party's ability to defend such

                                      B-5
<PAGE>

     action. No Indemnifying Party, in the defense of any such claim or
     litigation, shall, except with the consent of each Indemnified Party,
     consent to entry of any judgment or enter into any settlement which does
     not include as an unconditional term thereof the giving by the claimant or
     plaintiff to such Indemnified Party of a release from all liability in
     respect of such claim or litigation. Each Indemnified Party shall furnish
     such information regarding itself or the claim in question as an
     Indemnifying Party may reasonably request in writing and as shall be
     reasonably required in connection with the defense of such claim and
     litigation resulting therefrom.

          (d) If the indemnification provided for in this Section 3 shall for
     any reason be unenforceable by an Indemnified Party, although otherwise
     available in accordance with its terms, then each Indemnifying Party shall,
     in lieu of indemnifying such Indemnified Party, contribute to the amount
     paid or payable by such Indemnified Party as a result of the losses,
     claims, damages, liabilities or expenses with respect to which such
     Indemnified Party has claimed indemnification, in such proportion as is
     appropriate to reflect the relative fault of the Indemnified Party on the
     one hand and the Indemnifying Party on the other in connection with the
     statement or omissions which resulted in such losses, claims, damages,
     liabilities or expenses, as well as any other relevant equitable
     considerations. The relative fault, in the case of an untrue statement,
     alleged untrue statement, omission or alleged omission, shall be determined
     by, among other things, whether such statement, alleged statement, omission
     or alleged omission relates to information supplied by the Indemnifying
     Party or the Indemnified Party, and such parties' relative intent,
     knowledge, access to information and opportunity to correct or prevent such
     statement, alleged statement, omission or alleged omission. The Company and
     Investor agree that it would not be just and equitable if contribution
     pursuant hereto were to be determined by pro rata allocation or by any
     other method of allocation which does not take into account such equitable
     consideration. The amount paid or payable by an Indemnified Party as a
     result of the losses, claims, damages, liabilities or expenses referred to
     herein shall be deemed to include any legal or other expense reasonably
     incurred by such Indemnified Party in connection with investigating or
     defending against any action or claim which is the subject hereof. In no
     case, however, shall Investor be responsible for a portion of the
     contribution obligation in excess of the net proceeds to such Investor of
     securities sold as contemplated herein. No person guilty of fraudulent
     misrepresentation (within the meaning of Section11(f) of the Securities
     Act) shall be entitled to contribution from any person who is not guilty of
     such fraudulent misrepresentation.

          (e) Anything to the contrary contained in this Section 3
     notwithstanding, no Investor shall be liable for any indemnification or
     contribution in excess of the net proceeds received by it from any sale of
     Registrable Stock which has been registered hereunder.

     4. Miscellaneous.

          (a) Except as otherwise provided herein, the provisions of this
     Agreement may not be amended, modified or supplemented, and waivers or
     consents to or departures from the provisions hereof may not be given or
     made unless the Company has obtained the written consent of the Investor.

                                      B-6
<PAGE>

          (b) All notices and other communications provided for or permitted
     hereunder shall be made by hand delivery, telex, facsimile, overnight
     courier or registered first-class mail to the address of the party set
     forth on the signature page. All such notices and communications shall be
     deemed to have been duly given: when delivered, if by hand, overnight
     courier or mail; when the appropriate answer back is received, if by telex;
     when transmission is confirmed by the sending unit, if by facsimile.

          (c) This Agreement may be executed in any number of counterparts and
     by the parties hereto in separate counterparts, each of which when so
     executed shall be deemed to be an original and all of which taken together
     shall constitute one and the same agreement.

          (d) The headings to this Agreement are for convenience of reference
     only and shall not limit or otherwise affect the meaning hereof.

          (e) This Agreement shall be governed by and construed and enforced in
     accordance with the laws of the State of Minnesota without giving effect to
     the principles of conflicts of law thereof.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date indicated
above.

                                       MEDI-JECT CORPORATION

                                       By: /s/ Franklin Pass
                                           -------------------------------------
                                       Its: Chairman & CEO
                                            ------------------------------------
                                       Address: 161 Cheshire Ln. #100
                                                --------------------------------
                                                Minneapolis, MN 55441
                                                --------------------------------

                                                --------------------------------

                                       BIO-TECHNOLOGY GENERAL CORP.

                                       By: /s/ S. Fass
                                           -------------------------------------
                                       Its: CEO
                                            ------------------------------------
                                       Address: 70 Wood Ave. S.
                                                --------------------------------
                                                Iselin, NJ 08830
                                                --------------------------------

                                                --------------------------------

                                      B-7<PAGE>

                                                                  EXHIBIT 10.8.1

                              MEDI-JECT CORPORATION

                              EMPLOYMENT AGREEMENT

     THIS AGREEMENT, dated as of December 21, 1999, by and between Medi-Ject
Corporation, a Minnesota corporation (the "Company"), and Franklin Pass, an
individual resident of Hennepin County in the State of Minnesota ("Executive").

     WHEREAS, the Company wishes to employ Executive to render services for the
Company on the terms and conditions set forth in this Agreement, and Executive
wishes to be retained and employed by the Company on such terms and conditions.

     NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the Company and Executive set forth below, the Company and
Executive agree as follows:

1.   Employment. The Company hereby employs Executive, and Executive accepts
     such employment and agrees to perform services for the Company, for the
     period and upon the other terms and conditions set forth in this Agreement.

2.   Term. Unless terminated at an earlier date in accordance with Section 9 of
     this Agreement, the term of Executive's employment hereunder shall be for a
     period commencing on the date of this Agreement and continuing as set forth
     in the Term and Compensation Addendum applicable to each year.

3.   Position and Duties.

     3.01 Service with Company. During the term of this Agreement, Executive
          agrees to perform such reasonable employment duties as the Board of
          Directors of the Company shall assign to him from time to time. As of
          the date of this Agreement, Executive has been elected to serve as
          Chairman and Chief Executive Officer.

     3.02 Performance of Duties. Executive agrees to serve the Company
          faithfully and to the best of his ability and to devote his full time,
          attention and efforts to the business and affairs of the Company
          during the term of this Agreement. Executive hereby confirms that,
          other than as set forth herein, he is under no contractual commitments
          inconsistent with his obligations set forth in this Agreement, and
          that for the term of this Agreement, he will not render or perform
          services for any other corporation, firm, entity or person that are
          inconsistent with the provisions of this Agreement.

4.   Compensation.

     4.01 Salary. As compensation in full for services to be rendered by the
          Executive under this Agreement and as amended annually by the Term and
          Compensation Addendum, the Company shall pay to Executive a base
          annual salary set at $210,000 as of
<PAGE>

Medi-Ject Corporation
Employment Agreement
Page 2 of 9

          January 1, 1997, which salary shall be paid in accordance with the
          Company's normal payroll procedures and policies. The compensation
          payable to Executive during each year subsequent to 1997 during the
          term of this Agreement shall be mutually agreed upon by the Company
          and Executive prior to the commencement of each such year but shall
          not be less than $210,000 multiplied by a fraction, the denominator of
          which is the consumer price index (CPI) in effect on January 1, 1997,
          and the numeration of which is the CPI of each year. As used herein,
          CPI refers to the Consumer Price Index, All Items, U.S. Cities Average
          (base year 1982-1984) published by the Bureau of Labor Statistics.

     4.02 Participation in Benefit Plans. Executive shall also be entitled to
          participate in all employee benefit plans or programs (including
          vacation time) of the Company to the extent that his position, title,
          tenure, salary, age, health and other qualifications make him eligible
          to participate. The Company does not guarantee the adoption or
          continuance of any particular employee benefit plan or program during
          the term of this Agreement, and Executive's participation in any such
          plan or program shall be subject to the provisions, rules and
          regulations applicable thereto. In addition to the normal employee
          benefit programs of the Company, Executive shall be eligible for
          reimbursement or direct payment of expenses incurred for additional
          personal life insurance policies representing an aggregate policy
          amount of $2,000,000 and additional disability insurance premiums not
          to exceed $10,000 in each calendar year.

     4.03 Expenses. The Company will pay or reimburse Executive for all
          reasonable and necessary out-of-pocket expenses incurred by him in the
          performance of his duties under this Agreement, subject to the
          presentment of appropriate vouchers in accordance with the Company's
          normal policies for expense verification.

5.   Confidential Information. Except as permitted or directed by the Company's
     Board of Directors, during the term of this Agreement and for a period of
     five years thereafter, Executive shall not divulge, furnish or make
     accessible to anyone or use in any way (other than in the ordinary course
     of the business of the Company) any confidential or secret knowledge or
     information of the Company which Executive has acquired or become
     acquainted with or will acquire or become acquainted with prior to the
     termination of the period of his employment by the Company (including
     employment by the Company or any affiliated companies prior to the date of
     this Agreement), whether developed by himself or by others, concerning any
     trade secrets, confidential or secret designs, processes, formulae, plans,
     devices or material (whether or not patented or patentable) directly or
     indirectly useful in any aspect of the business of the Company, any
     customer or supplier lists of the Company, any confidential or secret
     development or research work of the Company, or any other confidential
     information or secret aspects of the business of the Company. Executive
     acknowledges that the above-described knowledge or information constitutes
     a unique and valuable asset of the Company and represents a substantial
     investment of time and expense by the Company and its predecessors, and
     that any disclosure or other use of such knowledge or information other
     than for the sole benefit of the Company would be wrongful and would
<PAGE>

Medi-Ject Corporation
Employment Agreement
Page 3 of 9

     cause irreparable harm to the Company. Both during and after the term of
     this Agreement, Executive will refrain from any acts or omissions that
     would reduce the value of such knowledge or information to the Company. The
     foregoing obligations of confidentiality, however, shall not apply to any
     knowledge or information which is now published or which subsequently
     becomes generally publicly known in the form in which it was obtained from
     the Company, other than as a direct or indirect result of the breach of
     this Agreement by Executive.

6.   Ventures. During the term of this Agreement, it is anticipated that
     Executive will be engaged in or associated with the planning and
     implementing of projects, programs and ventures involving the Company and
     third parties, and Executive hereby expressly acknowledges and agrees that
     all rights in such projects, programs and ventures shall belong to the
     Company. Except as formally approved by the Company's Board of Directors,
     Executive shall not be entitled to any interest in such projects, programs
     and ventures or to any commission, finder's fee or other compensation in
     connection therewith, other than the salary and compensation to be paid to
     Executive as provided in this Agreement, described in Section 4.01 of this
     Agreement.

7.   Noncompetition and Nonsolicitation Covenants.

     7.01 Agreement Not to Compete. Executive agrees that, during the term of
          his employment by the Company he shall not, directly or indirectly,
          engage in competition with the Company in any manner or capacity
          (e.g., as an advisor, principal, agent, partner, officer, director,
          stockholder, employee, member of any association, or otherwise) in any
          phase of the business that the Company is conducting during the term
          of this Agreement, including the design, development, manufacture,
          distribution, marketing, leasing or selling of accessories, devices,
          or systems related to the products or services being sold by the
          Company.

     7.02 Geographic Extent of Covenant. The obligations of Executive under
          Section 7.01 shall apply to any geographic area in which the Company:

          (a)  has engaged in business during the term of this Agreement through
               production, promotional sales or marketing activity, or
               otherwise; or

          (b)  has otherwise established its goodwill, business reputation, or
               any customer or supplier relations.

     7.03 Limitation on Covenant. Ownership by Executive, as a passive
          investment, of less than one percent (1%) of the outstanding shares of
          capital stock of any corporation listed on a national securities
          exchange or publicly traded in the over-the-counter market shall not
          constitute a breach of this Section 7.
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Employment Agreement
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     7.04 Nonsolicitation and Noninterference. During the term of this Agreement
          and for a period of two years thereafter, Executive shall not:

          (a)  induce or attempt to induce any employee of the Company to leave
               the employ of the Company, or in any way interfere adversely with
               the relationship between any such employee and the Company;

          (b)  induce or attempt to induce any employee of the Company to work
               for, render services to, provide advise to or supply confidential
               business information or trade secrets of the Company to any third
               person, firm or corporation; or

          (c)  induce or attempt to induce any customer, supplier, licensee,
               licensor or other business relation of the Company to cease doing
               business with the Company, or in any way interfere with the
               relationship between any such customer, supplier, licensee,
               licensor or other business relation and the Company.

     7.05 Indirect Competition and Interference. Executive further agrees that,
          during the term of this Agreement and, solely with respect to Section
          7.04, the period covered by Section 7.04, he will not, directly or
          indirectly, assist or encourage any other person in carrying out,
          directly or indirectly, any activity that would be prohibited by the
          above provisions of this Section 7 if such activity were carried out
          by Executive, either directly or indirectly; and, in particular,
          Executive agrees that he will not, directly or indirectly, induce any
          employee of the Company to carry out, directly or indirectly, any such
          activity.

8.   Patent and Related Matters.

     8.01 Disclosure and Assignment. Executive will promptly disclose in writing
          to the Company complete information concerning each and every
          invention, discovery, improvement, device, design, apparatus,
          practice, process, method or product, whether patentable or not, made,
          developed, perfected, devised, conceived or first reduced to practice
          by Executive, either solely or in collaboration with others, during
          the term of this Agreement, or within six months thereafter, whether
          or not during regular working hours, relating either directly or
          indirectly to the business, products, practices, or techniques of the
          Company (hereinafter referred to as "Developments"). Executive, to the
          extent that he has the legal right to do so, hereby acknowledges that
          any and all of said Developments are the property of the Company and
          hereby assigns and agrees to assign to the Company any and all of
          Executive's right, title and interest in and to any and all of such
          Developments. Without limiting the foregoing, any and all original
          works of authorship which are created by Executive (solely or jointly
          with others) within the scope of Executive's employment and which are
          protectable by copyright law shall be deemed "works made for hire," as
          that term is defined in the U.S. Copyright Act (17 U.S.C. Section
          101).
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Medi-Ject Corporation
Employment Agreement
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     8.02 Future Developments. As to any future Developments made by Executive
          that relate to the business, products or practices of the Company and
          that are first conceived or reduced to practice during the term of
          this Agreement, or within six months thereafter, but that are claimed
          for any reason to belong to an entity or person other than the
          Company, Executive will promptly disclose the same in writing to the
          Company and shall not disclose the same to others if the Company,
          within twenty (20) days thereafter, shall claim ownership of such
          Developments under the terms of this Agreement. If the Company makes
          such claim, Executive agrees that, insofar as the rights (if any) of
          Executive are involved, it will be settled by arbitration in
          accordance with the rules of the American Arbitration Association. The
          locale of the arbitration shall be Minneapolis, Minnesota (or other
          locale convenient to the Company's principal executive offices). If
          the Company makes no such claim, Executive hereby acknowledges that
          the Company has made no promise to receive and hold in confidence any
          such information disclosed by Executive.

     8.03 Limitation on Sections 8.01 and 8.02. The provisions of Sections 8.01
          and 8.02 shall not apply to any Development meeting the following
          conditions:

          (a)  such Development was developed entirely on Executive's own time;

          (b)  such Development was made without the use of any Company
               equipment, supplies, facility or trade secret information;

          (c)  such Development does not relate:

               (i)  directly to the business of the Company; or

               (ii) to the Company's actual or demonstrable anticipated
                    research;

          (d)  such Development does not result from any work performed by
               Executive for the Company.

     8.04 Assistance of Executive. Upon request and without further compensation
          therefor, but at no expense to Executive, and whether during the term
          of this Agreement or thereafter, Executive will do all lawful acts,
          including, but not limited to, the execution of papers and lawful
          oaths and the giving of testimony, that in the opinion of the Company,
          its successors and assigns may be necessary or desirable in obtaining,
          sustaining, reissuing, extending and enforcing United States and
          foreign Letters Patent, including, but not limited to, design patents,
          on any and all of such Developments, and for perfecting, affirming and
          recording the Company's complete ownership and title thereto, and to
          cooperate otherwise in all proceedings and matters relating thereto.

     8.05 Records. Executive will keep complete, accurate and authentic
          accounts, notes, data and records of all Developments in the manner
          and form requested by the Company.
<PAGE>

Medi-Ject Corporation
Employment Agreement
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          Such accounts, notes, data and records shall be the property of the
          Company, and, upon its request, Executive will promptly surrender the
          same to it or, if not previously surrendered upon its request or
          otherwise, Executive will surrender the same, and all copies thereof,
          to the Company upon the conclusion of his employment.

     8.06 Obligations, Restrictions and Limitations. Executive understands that
          the Company may enter into agreements or arrangements with agencies of
          the United States Government, and that the Company may be subject to
          laws and regulations which impose obligations, restrictions and
          limitations on it with respect to inventions and patents that may be
          acquired by it or that may be conceived or developed by employees,
          consultants or other agents rendering services to it. Executive agrees
          that he shall be bound by all such obligations, restrictions and
          limitations applicable to any such invention conceived or developed by
          him during the term of this Agreement and shall take any and all
          further action that may be required to discharge such obligations and
          to comply with such restrictions and limitations.

9. Termination.

     9.01 Grounds for Termination. This Agreement shall terminate prior to the
          expiration of the initial term set forth in Section 2 or any extension
          thereof in the event that at any time during the initial term or any
          extension thereof:

          (a)  Executive shall die;

          (b)  the Board of Directors of the Company shall determine that:

               (i)  Executive has become disabled;

               (ii) Executive had breached this Agreement in any material
                    respect, which breach is not cured by Executive or is not
                    capable of being cured by Executive within thirty (30) days
                    after written notice of such breach is delivered to
                    Executive; or

               (iii) Executive has engaged in willful and material misconduct,
                    including willful and material failure to perform his duties
                    as an officer or employee of the Company; or

          (c)  Executive is terminated by the Company (which may be with or
               without cause), following not less than ninety days prior written
               notice of such termination.

          Notwithstanding any termination of this Agreement, Executive, in
          consideration of his employment hereunder to the date of such
          termination, shall remain bound by the provisions of this Agreement
          that specifically relate to periods, activities or obligations upon or
          subsequent to the termination of Executive's employment.
<PAGE>

Medi-Ject Corporation
Employment Agreement
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     9.02 "Disability" Defined. The Board of Directors may determine that
          Executive has become disabled, for the purpose of this Agreement, in
          the event that Executive shall fail, because of illness or incapacity,
          to render services of the character contemplated by this Agreement
          over a period of ninety (90) days during any one hundred and eighty
          (180) day period. The existence or nonexistence of grounds for
          termination because of disability shall be made in good faith by the
          Board of Directors after notice in writing given to Executive at least
          thirty (30) days prior to such determination. During such thirty (30)
          day period, Executive shall be permitted to make a presentation to the
          Board of Directors for its consideration.

     9.03 Surrender of Records and Property. Upon termination of his employment
          with the Company, Executive shall deliver promptly to the Company all
          records, manuals, books, blank forms, documents, letters, memoranda,
          notes, notebooks, reports, data, tables, calculations or copies
          thereof, which are the property of the Company or which relate in any
          way to the business, products, practices or techniques of the Company,
          and all other property, trade secrets and confidential information of
          the Company, including, but not limited to, all documents which in
          whole or in part contain any trade secrets or confidential information
          of the Company, which in any of these cases are in his possession or
          under his control.

10.  Miscellaneous.

     10.01 Governing Law. This Agreement is made under and shall be governed by
          and construed in accordance with the laws of the State of Minnesota.

     10.02 Prior Agreements. This Agreement contains the entire Agreement of the
          parties relating to the subject matter hereof and supersedes all prior
          Agreements and understandings with respect to such subject matter, and
          the parties hereto have made no Agreements, representations or
          warranties relating to the subject matter of this Agreement which are
          not set forth herein.

     10.03 Withholding Taxes. The Company may withhold from any benefits payable
          under this Agreement all federal, state, city or other taxes as shall
          be required pursuant to any law or governmental regulation or ruling.

     10.04 Amendments. No amendment or modification of this Agreement shall be
          deemed effective unless made in writing and signed by the parties
          hereto.

     10.05 No Waiver. No term or condition of this Agreement shall be deemed to
          have been waived, nor shall there be any estoppel to enforce any
          provisions of this Agreement, except by a statement in writing signed
          by the party against whom enforcement of the waiver or estoppel is
          sought. Any written waiver shall not be deemed a continuing waiver
          unless specifically stated, shall operate only as to the specific term
          or
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Medi-Ject Corporation
Employment Agreement
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          condition waived and shall not constitute a waiver of such term or
          condition for the future or as to any act other than that specifically
          waived.

     10.06 Severability. To the extent any provision of this Agreement shall be
          invalid or unenforceable, it shall be considered deleted here from and
          the remainder of such provision and of this Agreement shall be
          unaffected and shall continue in full force and effect. In furtherance
          and not in limitation of the foregoing, should the duration or
          geographical extent of, or business activities covered by, any
          provision of this Agreement be in excess of that which is valid and
          enforceable under applicable law, then such provision shall be
          construed to cover only that duration, extent or activities which may
          validly and enforceably be covered. Executive acknowledges the
          uncertainty of the law in this respect and expressly stipulates that
          this Agreement be given the construction which renders its provisions
          valid and enforceable to the maximum extent (not exceeding its express
          terms) possible under applicable law.

     10.07 Assignment. This Agreement shall not be assignable, in whole or in
          part, by either party without the written consent of the other party,
          except that the Company may, without the consent of Executive, assign
          its rights and obligations under this Agreement to any corporation,
          firm or other business entity with or into which the Company may merge
          or consolidate, or to which the Company may sell or transfer all or
          substantially all of its assets, or of which 50% or more of the equity
          investment and of the voting control is owned, directly or indirectly,
          by, or is under common ownership with, the Company. After any such
          assignment by the Company, the Company shall be discharged from all
          further liability hereunder and such assignee shall thereafter be
          deemed to be the Company for the purposes of all provisions of this
          Agreement including this Section 10.

     10.08 Injunctive Relief. Executive agrees that it would be difficult to
          compensate the Company fully for damages for any violation of the
          provisions of this Agreement, including without limitation the
          provisions of Sections 5, 7, 8 and 9.03. Accordingly, Executive
          specifically agrees that the Company shall be entitled to temporary
          and permanent injunctive relief to enforce the provisions of this
          Agreement and that such relief may be granted without the necessity of
          proving actual damages. This provision with respect to injunctive
          relief shall not, however, diminish the right of the Company to claim
          and recover damages in addition to injunctive relief.
<PAGE>

Medi-Ject Corporation
Employment Agreement
Page 9 of 9

IN WITNESS WHEREOF, Executive and the Company have executed this Agreement as of
the date set forth in the first paragraph.

MEDI-JECT CORPORATION                  EXECUTIVE

By:
    ------------------------------     -----------------------------------------
                                       Franklin Pass

Its:
     -----------------------------
<PAGE>

                     TERM AND COMPENSATION ADDENDUM FOR 2000

             TO AMEND EMPLOYMENT AGREEMENT DATED DECEMBER 21, 1999,

                             AS OF DECEMBER 21, 1999

THIS AGREEMENT, effective as of December 21, 1999, by and between Medi-Ject
Corporation, a Minnesota corporation (the "Company") and Franklin Pass, an
individual resident of the State of Minnesota (the "Executive"),

WHEREAS, the Company and the Executive are parties to an Employment Agreement
dated December 21, 1999, (the "Agreement"), and

PURSUANT to the recommendation of the Compensation Committee of the Board of
Directors on December 21, 1999, as approved by the full Board of Directors on
the same date, and

WHEREAS, the Company and the Executive each wish to agree to the following:

     1.   The Agreement term shall begin on December 21, 1999, and extend
          through and include December 31, 2002.

     2.   Base compensation for year 2000 shall be $228,300.

     3.   A $25,000 cash bonus upon signing a development and distribution
          agreement and/or product and technology rights agreement with either
          Disetronic or Pharmacia & Upjohn.

All other terms of the Agreement and all amendments applicable thereto are to
remain in full force and effect.

AGREED:

MEDI-JECT CORPORATION:                 EXECUTIVE:

By:
    ------------------------------     -----------------------------------------
                                       Franklin Pass
Its:
     -----------------------------
Dated:                                 Dated:
      ----------------------------            ----------------------------------

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