8-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): January 15, 2002

La Jolla Pharmaceutical Company
(Exact Name of Registrant as Specified in Charter)

Delaware	0-24274	33-0361285
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6455 Nancy Ridge Drive, San Diego, California	92121
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 452-6600

N/A
(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

EXHIBIT 4.1

EXHIBIT 4.2

EXHIBIT 99.1

Item 5. Other Events

         On January 15, 2002, La Jolla Pharmaceutical Company (the “Company”) announced that it has entered into definitive purchase agreements for the sale of 7,000,000 restricted shares of newly issued common stock to institutional and other accredited investors (the “Purchasers”), for gross proceeds of approximately $51.6 million. The transactions are expected to close on January 18, 2002. The Company has agreed to register the shares of common stock for resale.

         A form of stock purchase agreement and form of registration rights agreement between the Company and Purchasers are attached hereto as Exhibit 4.1 and Exhibit 4.2, respectively. The press release announcing the execution of the purchase agreements is attached hereto as Exhibit 99.1.

Item 7. Exhibits

         Pursuant to General Instruction F of Form 8-K, the following documents are incorporated by reference herein and attached as exhibits hereto:

Exhibit	Description
4.1	Form of Stock Purchase Agreement between the Company and Purchasers.
4.2	Form of Registration Rights Agreement between the Company and Purchasers.
99.1	Press Release of the Company, dated as of January 15, 2002.

SIGNATURE

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

	La Jolla Pharmaceutical Company
Date: January 16, 2002	By:	/s/ Steven B. Engle
		Steven B. Engle Chief Executive Officer

EXHIBIT INDEX

Exhibit	Description
4.1	Form of Stock Purchase Agreement between the Company and Purchasers.
4.2	Form of Registration Rights Agreement between the Company and Purchasers.
99.1	Press Release of the Company, dated as of January 15, 2002.

EX-4.1 3 a78437ex4-1.txt EXHIBIT 4.1 EXHIBIT 4.1 FORM OF STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of January ___, 2002 by and between La Jolla Pharmaceutical Company, a Delaware corporation with its principal office at 6455 Nancy Ridge Drive, San Diego, California 92121 (the "COMPANY"), and the several purchasers named in Exhibit A attached hereto (each, a "PURCHASER" and collectively, the "PURCHASERS"). WHEREAS, the Company desires to issue and sell to the Purchasers an aggregate of up to 7,000,000 shares (the "SHARES") of the authorized but unissued shares of Company common stock, $0.01 par value per share (the "COMMON STOCK"); and WHEREAS, the Purchasers, severally, wish to purchase the Shares on the terms and subject to the conditions set forth in this Agreement. NOW THEREFORE, in consideration of the mutual agreements, representations, warranties and covenants herein contained, the parties hereto agree as follows: 1. Definitions. As used in this Agreement, the following terms shall have the following respective meanings: "Affiliate" of a party means any corporation or other business entity controlled by, controlling or under common control with such party. For this purpose "CONTROL" shall mean direct or indirect beneficial ownership of fifty percent (50%) or more of the voting or income interest in such corporation or other business entity. "Closing Date" means the date of the Closing. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and all of the rules and regulations promulgated thereunder. "GAAP" means United States generally accepted accounting principles. "KD&W" means Kelley Drye & Warren LLP. "Majority Purchasers" shall mean Purchasers which, at any given time, hold greater than fifty percent (50%) of the voting power of the outstanding Shares. "Material Adverse Effect" shall mean a material adverse effect on the prospects (financial or otherwise), condition, business, operations, assets, liabilities (including contingent liabilities required to be reserved against in accordance with GAAP), or results of operations of the Company. "NASD" means the National Association of Securities Dealers, Inc. "Registration Rights Agreement" shall mean that certain Registration Rights Agreement, dated as of the Closing Date, among the Company and the Purchasers. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder. 2. Purchase and Sale of Shares. 2.1 Purchase and Sale. Subject to and upon the terms and conditions set forth in this Agreement, the Company agrees to issue and sell to each Purchaser, and each Purchaser, severally, hereby agrees to purchase from the Company, at the Closing, the number of shares of Common Stock set forth opposite the name of such Purchaser under the heading "Number of Shares to be Purchased" on Exhibit A hereto, at a purchase price of $7.37 per share. The total purchase price payable by each Purchaser for the number of shares of Common Stock that such Purchaser is hereby agreeing to purchase is set forth opposite the name of such Purchaser under the heading "Purchase Price" on Exhibit A hereto. The aggregate purchase price payable by the Purchasers to the Company for all of the Shares shall be $51,590,000. The Company shall be obligated to register the Shares pursuant to the terms and conditions set forth in the Registration Rights Agreement. 2.2 Closing. The closing of the transactions contemplated under this Agreement (the "CLOSING") shall take place at 10:00 a.m. at the offices of Gibson, Dunn & Crutcher LLP in Irvine, California on January __, 2001, or at such other location, date and time as may be agreed upon between the Purchasers and the Company (the "CLOSING DATE"). 2.3 Independent Purchasers. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm's length purchaser with respect to this Agreement and the transactions contemplated hereby and that each Purchaser has separately negotiated the terms of this Agreement. Nothing contained herein or in any agreement or document relating to this transaction, and no action taken by any Purchaser, shall be deemed to constitute the Purchasers as, or to create any presumption that the Purchasers are in any way acting in concert or as, a group with respect to the obligations or transaction hereunder. No Purchaser has relied upon any other Purchaser for advice in entering into the transactions contemplated hereby. Each Purchaser shall be entitled to independently protect and enforce its rights hereunder. 3. Representations and Warranties of the Company. The Company hereby represents and warrants to each of the Purchasers as follows: 3.1 Incorporation. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification, except where the failure to so qualify would not have a Material Adverse Effect. The Company has all requisite corporate power and authority, and all necessary licenses and permits, to own and lease its properties and assets and to carry on its business as now conducted, except to the extent failure to have any such license or permit would not have a Material Adverse Effect. The Company does not have any subsidiaries. The Company does not own or control, directly or indirectly, any interest in any other corporation, partnership, limited liability company, unincorporated business organization, association, trust or other business entity. 3.2 Capitalization. The authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock, of which 35,248,561 shares are outstanding as of October 31, 2001, and (ii) 8,000,000 shares of preferred stock, of which no shares are outstanding on the date hereof. Except as set forth in Schedule 3.2 hereto, there are no existing options, warrants, calls, contracts, demands or preemptive (or similar) rights, subscriptions or other rights, agreements, arrangements or commitments of any character obligating the Company to issue, transfer or sell, or cause to be issued, transferred or sold, any shares of the capital stock of the Company or other equity interests in the Company or any securities convertible into or exchangeable for such shares of capital stock or other equity interests, and there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of its capital stock or other equity interests. There are no stockholder agreements, voting agreements, or similar agreements with respect to the Common Stock to which the Company is a party, or to the knowledge of the Company, by or between any stockholders of the Company or any of its Affiliates. 3.3 Authorization. The Company has all requisite corporate power to enter into this Agreement and the Registration Rights Agreement and to carry out and perform its obligations under the terms of this Agreement and the Registration Rights Agreement (including, without limitation, the issuance of the Shares). All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution, delivery and performance of this Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated herein and therein has been taken or will be taken prior to the Closing Date. When executed and delivered by the Company, each of this Agreement and the Registration Rights Agreement shall constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors' rights generally and by general equitable principles. 3.4 Valid Issuance of the Shares. The Shares being purchased by the Purchasers hereunder will, upon issuance pursuant to the terms hereof, be validly issued, fully paid and nonassessable. Except for blue sky filing fees, if any, there are no state or city taxes, fees or other charges payable in connection with the execution or delivery of this Agreement, the Registration Rights Agreement and the Shares. 3.5 Financial Statements. The Company has furnished to each Purchaser its audited Statements of Income, Stockholders' Equity and Cash Flows for the fiscal year ended December 31, 2000, its audited Balance Sheet as of December 31, 2000, its unaudited Statements of Income, Stockholders' Equity and Cash Flows for the period from December 31, 2000 through September 30, 2001 and its unaudited Balance Sheet as of September 30, 2001. All such financial statements are hereinafter referred to collectively as the "FINANCIAL STATEMENTS." The Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved, and fairly present, in all material respects, the financial position of the Company and the results of its operations as of the date and for the periods indicated thereon, except that the unaudited financial statements may not be in accordance with generally accepted accounting principles because of the absence of footnotes normally contained therein and are subject to normal year-end audit adjustments which, individually, and in the aggregate, will not be material. Since September 30, 2001, to the Company's knowledge, (i) there has been no development or change (actual or threatened), individually or in the aggregate, having a Material Adverse Effect, (ii) except as set forth in an SEC Document (as defined below), there does not exist any condition reasonably likely to result in a Material Adverse Effect and (iii) the Company has conducted its business only in the ordinary course. The Company has no indebtedness, obligations or liabilities of any kind (whether accrued, absolute, contingent or otherwise, and whether due or to become due) which were not fully reflected in, reserved against or otherwise described in the Financial Statements or the notes thereto, or incurred in the ordinary course of business consistent with the Company's past practices since September 30, 2001, and in any such case which were required generally to be reflected in such Financial Statements under GAAP, all of which individually and in the aggregate do not and would not have a Material Adverse Effect. 3.6 SEC Documents. The Company has furnished to each Purchaser, a true and complete copy of the Company's Annual Report on Form 10-K for the year ended December 31, 2000, the Company's Quarterly Reports on Form 10-Q for three months ended March 31, 2001, June 30, 2001 and September 30, 2001 and any other statement, report, registration statement (other than registration statements on Form S-8) or definitive proxy statement filed by the Company with the SEC during the period commencing December 31, 2000 and ending on the date hereof. The Company will, promptly upon the filing thereof, also furnish to each Purchaser all statements, reports (including, without limitation, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K), registration statements and definitive proxy statements filed by the Company with the SEC during the period commencing on the date hereof and ending on the Closing Date (all such materials required to be furnished to each Purchaser pursuant to this sentence or pursuant to the next preceding sentence of this Section 3.6 being called, collectively, the "SEC DOCUMENTS"). Since January 1, 2001, the Company has timely made all filings required to be made by it under the Exchange Act, the Securities Act and the securities laws of any state, and any rules and regulations promulgated thereunder. The SEC Documents complied or will comply in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable, and none of the SEC Documents contained or will contain any untrue statement of a material fact or omitted or will omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, as of their respective filing dates, except to the extent corrected by a subsequently filed SEC Document filed prior to the date hereof. The Company is eligible to use a registration statement on Form S-3 with respect to the registration of Registrable Securities (as such term is defined in the Registration Rights Agreement) pursuant to the Registration Rights Agreement. 3.7 Consents. All permits, consents, approvals, orders, authorizations of, or declarations to or filings with any federal, state, local or foreign court, governmental or regulatory authority, or other person (including third party consents) required on the part of the Company in connection with the execution, delivery or performance of this Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated herein (including, without limitation, the issuance of the Shares) and therein have been obtained or will be obtained prior to the Closing Date, and will be effective as of the Closing Date. 3.8 No Conflict. The execution and delivery of this Agreement and the Registration Rights Agreement by the Company and the consummation of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares) will not (x) conflict with or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a material benefit under (i) any provision of the Certificate of Incorporation or bylaws of the Company or (ii) any agreement or instrument, permit, franchise, license, judgment, order, statute, law, ordinance, rule or regulations, applicable to the Company or its respective properties or assets or (y) result in the creation of any lien, security interest, charge or encumbrance upon the Company's assets, properties, or outstanding capital stock. 3.9 Brokers or Finders. Except for UBS Warburg LLC ("UBS") and Pacific Growth Equities, Inc. ("PGE"), the Company has not dealt with any broker or finder in connection with the transactions contemplated by this Agreement, and, except for certain fees and expenses payable by the Company to UBS and PGE, the Company has not incurred, and shall not incur, directly or indirectly, any liability for any brokerage or finders' fees or agents commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby. 3.10 Nasdaq National Market. The Common Stock is listed on The Nasdaq National Market, and there are no proceedings to revoke or suspend such listing. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act. The Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from The Nasdaq National Market. The Company has not received any notification that, and has no knowledge that, the SEC or the NASD is contemplating terminating such listing or registration. The issuance of the Shares does not require stockholder approval, including, without limitation, as may be required pursuant to the Nasdaq Marketplace Rules. 3.11 Absence of Litigation. There is no action, suit or proceeding or, to the Company's knowledge, any investigation, pending, or to the Company's knowledge, threatened by or before any governmental body against the Company and in which an unfavorable outcome, ruling or finding in any said matter, or for all matters taken as a whole, might have a Material Adverse Effect. The foregoing includes, without limitation, any such action, suit, proceeding or investigation that questions this Agreement or the Registration Rights Agreement or the right of the Company to execute, deliver and perform under same. 3.12 Fiduciary Duties. The Company represents and warrants that, to the best of its knowledge, none of its directors or officers is or has been the subject of, or a defendant in: (i) an enforcement action or prosecution (or settlement in lieu thereof) brought by a governmental authority relating to a violation of securities, fiduciary or criminal laws, or (ii) a civil action (or settlement in lieu thereof) brought by stockholders or investors for violation of duties owed to the stockholders or investors. 3.13 Title to Property and Assets. The Company owns its property and assets free and clear of all mortgages, liens, loans, claims, charges and encumbrances, except such encumbrances and liens that arise in the ordinary course of business and do not materially impair the Company's ownership or use of such property or assets. With respect to property and assets it leases, the Company is in material compliance with such leases and, to the best of its knowledge, holds a valid leasehold interest free of any liens, charges, claims or encumbrances, except to extent such would not have a Material Adverse Effect. 3.14 Intellectual Property. Seller is the sole and exclusive owner of, or has the right to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, trade secrets, information, licenses, proprietary rights and processes used by the Company which are material to the Company to conduct its business as presently conducted. The Company has not received written notice that, and has no knowledge that, its use and enjoyment of the intellectual property described in this Section 3.14 in connection with the conduct by the Company of its business as currently conducted conflicts with or infringes on the rights of others in a manner that would have a Material Adverse Effect. The Company's intellectual property rights as described in this Section 3.14 have been duly registered (where applicable) with the appropriate state, federal and foreign jurisdictions. 3.15 Environmental Matters. Except as set forth in the SEC Documents, to its knowledge, the Company is not in violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, which violation could reasonably be expected to result in a Material Adverse Effect, and to the best of its knowledge, no expenditures are required in order to comply with any such existing statute, law or regulation, which expenditures could reasonably be expected to result in a Material Adverse Effect. 3.16 Employees. To the Company's knowledge, no strike, labor dispute or union organizing activities are pending or threatened against the Company by its employees. No employees belong to a union or collective bargaining unit. The Company does not have any workers' compensation liabilities. 3.17 Tax Matters. The Company has filed all tax returns and reports as required by federal, state, local, and foreign law and has paid all taxes shown thereon that have become due and payable. Such returns and reports were materially accurate and complete when filed and reflect all taxes and other assessments due thereunder to be paid by the Company, except those contested by it in good faith. The provision for taxes of the Company included in the provision for accrued liabilities in the Company's financial statements is adequate for taxes due or accrued as of the date thereof. The Company has never had any material tax deficiency proposed or assessed against it. Since 1995, none of the Company's federal income tax returns have been audited by governmental authorities. 3.18 Compliance with Laws. The business and operations of the Company have been conducted in accordance with all applicable laws, rules and regulations of all governmental agencies, authorities and instrumentalities (including, without limitation, under the Employee Retirement Income Security Act of 1974, as amended, laws and regulations administered by the Food and Drug Administration, and all laws relating to the employment of labor), except for such violations which would not, individually or in the aggregate, have a Material Adverse Effect. 3.19 Insurance. The Company maintains insurance of the type and in the amount reasonably adequate for its business, including, but not limited to, insurance covering all real and personal property owned or leased by the Company against theft, damage, destruction, acts vandalism, and all other risks customarily insured against by similarly situated companies, all of which insurance is in full force and effect. 3.20 Investment Company Act. The Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT"), and the Company is not directly or indirectly controlled by or acting on behalf of any person that is an "investment company" within the meaning of the Investment Company Act. 3.21 Compliance With Securities Laws. Assuming the accuracy of the representations and warranties of the Purchasers set forth in Section 4 hereof, the offer and sale by the Company of the Shares is exempt from (i) the registration and prospectus delivery requirements of the Securities Act and (ii) the registration and qualification provisions of all applicable state securities and "blue sky" laws. Other than pursuant to an effective registration statement under the Securities Act, the Company has not issued, offered or sold any shares of Common Stock (including for this purpose any securities of the same or a similar class as the Common Stock or any securities convertible into or exchangeable or exercisable for the Common Stock or any such other securities) within the six (6) month period preceding the date hereof or taken any other action, or failed to take any action, that, in any such case, would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the NASD, as applicable. The Company shall not directly or indirectly take, and shall not permit any of its directors, officers or Affiliates directly or indirectly to take, any action (including, without limitation, any offering or sale to any person or entity of the Shares or any Common Stock) that will make unavailable the exemption from registration under the Securities Act being relied upon by the Company for the offer and sale to the Purchasers of the Shares as contemplated by this Agreement, including, without limitation, the filing of a registration statement under the Securities Act. No form of general solicitation or advertising within the meaning of Rule 502(c) under the Securities Act has been used or authorized by the Company or any of its officers, directors or Affiliates in connection with the offer or sale of the Shares as contemplated by this Agreement or any other agreement to which the Company is a party. 3.22 Registration Rights. There are no persons with registration or other similar rights to have any securities registered to the Registration Statement or otherwise registered by the Company under the Securities Act which have not been satisfied. 3.24 Related Party Transactions. Except as set forth in the SEC Documents, neither the Company nor any of its officers, directors or Affiliates nor any family member of any officer, director or Affiliate of the Company has borrowed any moneys from or has outstanding any indebtedness or other similar obligations to the Company. Neither the Company nor any of its officers, directors or Affiliates nor any family member of any officer, director or Affiliate of the Company (i) owns any direct or indirect interest constituting more than a 1% equity (or similar profit participation) interest in, or controls or is a director, officer, partner, member or employee of, or consultant or lender to or borrower from, or has the right to participate in the profits of, any person or entity which is a participant in any transaction to which the Company is a party or (ii) is a party to any contract, agreement, commitment or other arrangement with the Company. 3.25 Contracts. All contracts and agreements filed or required to be filed as exhibits to the SEC Documents filed prior to the date hereof, except such contracts and agreements that have expired by their own terms (collectively, "CONTRACTS") are in full force and effect and constitute legal, valid and binding obligations of the Company and, to the best knowledge of the Company, the other parties thereto; the Company and, to the best knowledge of the Company, each other party thereto, have performed in all material respects all obligations required to be performed by them under the Contracts, and no material violation or default exists in respect thereof, nor any event that with notice or lapse of time, or both, would constitute a default thereof, on the part of the Company or, to the best knowledge of the Company, any other party thereto; none of the Contracts is currently being renegotiated; and the validity, effectiveness and continuation of all Contracts will not be materially adversely affected by the transactions contemplated by this Agreement. 3.26 Disclosure. The Agreement and the SEC Documents does not contain any untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. 4. Representations and Warranties of the Purchasers. Each Purchaser severally for itself, and not jointly with the other Purchasers, represents and warrants to the Company as follows: 4.1 Authorization. Such Purchaser has all requisite power under its constituent documents to enter into each of this Agreement and the Registration Rights Agreement and to carry out and perform its obligations under the terms of this Agreement and the Registration Rights Agreement. All action on the part of such Purchaser and, if applicable, its officers, directors, stockholders, managers, members and equity holders necessary for the authorization, execution, delivery and performance of this Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated herein and therein has been taken. When executed and delivered, each of this Agreement and the Registration Rights Agreement will constitute the legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors' rights generally and by general equitable principles. 4.2 Purchase Entirely for Own Account. Such Purchaser is acquiring the Shares being purchased by it hereunder for investment, for its own account, and not for resale or with a view to distribution thereof in violation of the Securities Act. 4.3 Investor Status; Etc. Such Purchaser certifies and represents to the Company that at the time such Purchaser acquires any of the Shares, such Purchaser will be an "Accredited Investor" as defined in Rule 501 of Regulation D promulgated under the Securities Act and was not organized for the purpose of acquiring the Shares. Such Purchaser's financial condition is such that it is able to bear the risk of holding the Shares for an indefinite period of time and the risk of loss of its entire investment. Such Purchaser has been afforded the opportunity to ask questions of and receive answers from the management of the Company concerning this investment and has sufficient knowledge and experience in investing in companies similar to the Company in terms of the Company's stage of development so as to be able to evaluate the risks and merits of its investment in the Company. 4.4 Shares Not Registered. Such Purchaser understands that the Shares have not been registered under the Securities Act, by reason of their issuance by the Company in a transaction exempt from the registration requirements of the Securities Act, and that the Shares must continue to be held by such Purchaser unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration. The Purchaser understands that the exemptions from registration afforded by Rule 144 (the provisions of which are known to it) promulgated under the Securities Act depend on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts. 4.5 No Conflict. The execution and delivery of this Agreement and the Registration Rights Agreement by such Purchaser and the consummation by it of the transactions contemplated hereby and thereby will not conflict with or result in any violation of or default by such Purchaser (with or without notice or lapse of time, or both) under (i) any provision of the organizational documents of such Purchaser or (ii) any judgment, order, statute, law, ordinance, rule or regulations, applicable to such Purchaser or its respective properties or assets. 4.6 Brokers. Such Purchaser has not retained, utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement. 4.7 Consents. All consents, approvals, orders and authorizations required on the part of such Purchaser in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated herein have been obtained and are effective as of the Closing Date. 5. Conditions Precedent. 5.1 Conditions to the Obligation of the Purchasers to Consummate the Closing. The obligation of each Purchaser to consummate the Closing and to purchase and pay for the Shares being purchased by it pursuant to this Agreement is subject to the satisfaction of the following conditions precedent (or waiver by such Purchaser): (a) The representations and warranties contained herein of the Company shall be true and correct on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (it being understood and agreed by each Purchaser that, in the case of any representation and warranty of the Company contained herein which is not hereinabove qualified by application thereto of a materiality standard, such representation and warranty need be true and correct only in all material respects in order to satisfy as to such representation or warranty the condition precedent set forth in the foregoing provisions of this Section 5.1(a)). (b) Prior to the Closing Date, no Material Adverse Event shall have occurred and the Company shall have performed all covenants, agreements, obligations and conditions herein required to be performed or observed by the Company on or prior to the Closing Date. (c) No suit, action, or other proceeding challenging this Agreement or the transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially delay the Closing, shall have been instituted before any court, arbitrator or governmental body, agency or official and shall be pending. (d) The purchase of and payment for the Shares by such Purchasers shall not be prohibited by any law or governmental order or regulation. All necessary consents, approvals, licenses, permits, orders and authorizations of, or registrations, declarations and filings with, any governmental or administrative agency or of any other person with respect to any of the transactions contemplated hereby (including, without limitation, the issuance of the Shares) shall have been duly obtained or made and shall be in full force and effect. (e) The Company shall have complied with all applicable requirements of federal and state securities or "blue sky" laws with respect to the issuance of the Shares, and each Purchaser, at such Purchaser's request, shall have been provided reasonable evidence thereof. (f) The Shares shall have been approved for listing on The Nasdaq National Market, and each Purchaser, at such Purchaser's request, shall have been provided reasonable evidence thereof. (g) The Registration Rights Agreement shall have been executed and delivered by the Company. (h) A certificate shall have been delivered by the Company, signed by its President or Chief Executive Officer, to the effect that: (i) the representations and warranties of the Company contained in this Agreement are true and correct in all material respects on and as of the Closing Date, as though newly made on and as of that date (except for representations and warranties which speak as of the date of the Agreement or as of another specific date or period covered thereby) and (ii) the Company has performed or complied with, in all material respects, all of its covenants contained in this Agreement and required to be performed or complied with on or before Closing Date. (i) The Company shall have delivered to each Purchaser an opinion of counsel for the Company, dated the Closing Date, in substantially the form of Exhibit B attached hereto. (j) A single stock certificate shall have been delivered by the Company, registered in the name of such Purchaser or nominee as designated by the Purchaser in writing, representing the number of shares of Common Stock purchased by such Purchaser, free of all restrictive and other legends (except as provided in Section 6.2 hereof and otherwise in the form of good delivery), against payment of the purchase price therefor by wire transfer of immediately available funds to such account or accounts as the Company shall designate in writing. (k) All instruments and corporate proceedings in connection with the transactions contemplated by this Agreement to be consummated at the Closing shall be satisfactory in form and substance to such Purchaser, and such Purchaser shall have received copies (executed or certified, as may be appropriate) of all documents which such Purchaser may have reasonably requested in connection with such transactions. (l) Purchasers shall have committed, pursuant to the terms hereof, to purchase an aggregate of at least four million (4,000,000) Shares. 5.2 Conditions to the Obligation of the Company to Consummate the Closing. The obligation of the Company to consummate the Closing and to issue and sell to each Purchaser the Shares to be purchased by it at the Closing is subject to the satisfaction of the following conditions precedent (or waiver by the Company): (a) The representations and warranties contained herein of such Purchaser shall be true and correct on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (it being understood and agreed by the Company that, in the case of any representation and warranty of each Purchaser contained herein which is not hereinabove qualified by application thereto of a materiality standard, such representation and warranty need be true and correct only in all material respects in order to satisfy as to such representation or warranty the condition precedent set forth in the foregoing provisions of this Section 5.2(a)). (b) The Registration Rights Agreement shall have been executed and delivered by each Purchaser. (c) Such Purchaser shall have performed all obligations and conditions herein required to be performed or observed by it on or prior to the Closing Date. (d) No proceeding challenging this Agreement or the transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially delay the Closing, shall have been instituted before any court, arbitrator or governmental body, agency or official and shall be pending. (e) The sale of the Shares by the Company shall not be prohibited by any law or governmental order or regulation. All necessary consents, approvals, licenses, permits, orders and authorizations of, or registrations, declarations and filings with, any governmental or administrative agency or of any other person with respect to any of the transactions contemplated hereby shall have been duly obtained or made and shall be in full force and effect. (f) Such Purchaser shall have executed and delivered to the Company a Investor Questionnaire, in substantially the form attached hereto as Exhibit C, pursuant to which each such Purchaser shall provide information necessary to confirm each such Purchaser's status as an "accredited investor" (as such term is defined in Rule 501 promulgated under the Securities Act). (g) The Company shall have received executed agreements from each of the Purchasers to purchase, in accordance with this Agreement, the number of shares of Common Stock set forth on Exhibit A opposite its name under the heading "Number of Shares to be Purchased." (h) All instruments and corporate proceedings in connection with the transactions contemplated by this Agreement to be consummated at the Closing shall be satisfactory in form and substance to the Company, and the Company shall have received counterpart originals, or certified or other copies of all documents, including without limitation records of corporate or other proceedings, which it may have reasonably requested in connection therewith. (i) Purchasers shall have committed, pursuant to the terms hereof, to purchase an aggregate of at least four million (4,000,000) Shares. 6. Transfer; Legends. 6.1 Securities Law Transfer Restrictions. No Purchaser shall sell, assign, pledge, transfer or otherwise dispose or encumber any of the Shares being purchased by it hereunder, except: (i) pursuant to an effective registration statement under the Securities Act or (ii) pursuant to an available exemption from registration under the Securities Act and applicable state securities laws and, if reasonably requested by the Company, upon delivery by such Purchaser of an opinion of counsel reasonably satisfactory to the Company to the effect that the proposed transfer is exempt from registration under the Securities Act and applicable state securities laws. Any transfer or purported transfer of the Shares in violation of this Section 6.1 shall be voidable by the Company; provided, however, that no opinion will be required in connection with (i) a public sale or transfer of Shares pursuant to an effective registration statement in connection with which Purchaser represents in writing to the Company that such Shares have been or are being sold pursuant to such registration statement; (ii) a public sale of Shares pursuant to Rule 144 under the Securities Act if Purchaser has delivered to the Company a customary and accurate Rule 144 broker's and seller's representation letter; or (iii) a sale of shares pursuant to Rule 144(k) under the Securities Act if Purchaser has delivered to the Company a customary and accurate Rule 144 seller's representation letter. The Company shall not register any transfer of the Shares in violation of this Section 6.1. The Company may, and may instruct any transfer agent for the Company, to place such stop transfer orders as may be required on the transfer books of the Company in order to ensure compliance with the provisions of this Section 6.1. 6.2 Legends. Each certificate requesting any of the Shares shall be endorsed with a legend in substantially the form set forth below, and each Purchaser covenants that, except to the extent such restrictions are waived by the Company, it shall not transfer the shares represented by any such certificate without complying with the restrictions on transfer described in this Agreement and the legends endorsed on such certificate: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED TRANSFERRED OR OTHERWISE DISPOSED OF (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SUCH LAWS OR (II) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SAID ACT, AND TO THE EXTENT REQUIRED BY SECTION 6.1 OF THE STOCK PURCHASE AGREEMENT PURSUANT TO WHICH THE SHARES REPRESENTED HEREBY WERE ACQUIRED, UPON DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM THE ACT AND SUCH LAWS. 6.3 Removal of Legends. Any legend endorsed on a certificate evidencing the Shares shall be removed, and the Company shall issue a certificate without such legend to the holder of such Shares, if such Shares are being sold pursuant to an effective registration statement under the Securities Act or pursuant to Rule 144 promulgated thereunder and the purchaser thereof may immediately resell such Shares without restriction and without registration; provided, however, that in the case of a sale pursuant to Rule 144, such holder of Shares shall provide such information as is reasonably requested by the Company to ensure that such Shares may be sold in reliance on Rule 144. 7. Termination; Liabilities Consequent Thereon. This Agreement may be terminated and the transactions contemplated hereunder abandoned at any time prior to the Closing only as follows: (a) with respect to a Purchaser, by such Purchaser, upon notice to the Company if the conditions set forth in Section 5.1 shall not have been satisfied on or prior to February __, 2002; or (b) with respect to a Purchaser, by the Company, upon notice to such Purchaser if the conditions set forth in Section 5.2 to be satisfied by such Purchaser shall not have been satisfied on or prior to February __, 2002; or (c) at any time by mutual agreement of the Company and not less than five (5) Purchasers who represent at least fifty percent (50%) of the Shares being sold hereunder; or (d) with respect to a Purchaser, by such Purchaser, if there has been any breach of any representation or warranty or any material breach of any covenant of the Company contained herein and the same has not been cured within 15 days after notice thereof, (it being understood and agreed by each Purchaser that, in the case of any representation or warranty of the Company contained herein which is not hereinabove qualified by application thereto of a materiality standard, such representation or warranty will be deemed to have been breached for purposes of this Section 7.1(d) only if such representation or warranty was not true and correct in all material respects at the time such representation or warranty was made by the Company); or (e) by the Company with respect to a Purchaser, if there has been any breach of any representation, warranty or any material breach of any covenant of such Purchaser contained herein and the same has not been cured within 15 days after notice thereof (it being understood and agreed by the Company that, in the case of any representation and warranty of the Purchaser contained herein which is not hereinabove qualified by application thereto of a materiality standard, such representation or warranty will be deemed to have been breached for purposes of this Section 7.1(e) only if such representation or warranty was not true and correct in all material respects at the time such representation or warranty was made by such Purchaser). Any termination pursuant to this Section 7 shall be without liability on the part of any party, unless such termination is the result of a material breach of this Agreement by a party to this Agreement in which case such breaching party shall remain liable for such breach notwithstanding any termination of this Agreement. 8. Miscellaneous Provisions. 8.1 Use of Proceeds. The Company shall expend the net proceeds from the sale of the Shares solely for general corporate and working capital purposes. 8.2 Filings. The Company shall make all necessary filings with the SEC and "blue sky" filings required to be made by the Company in connection with the sale of the Shares to the Purchasers as required by all applicable laws, and shall provide a copy thereof to the Purchasers promptly after such filing. 8.3 Public Statements or Releases. Each of the parties to this Agreement agrees that it shall not make, issue, or release any announcement, whether to the public generally, or to any of its suppliers or customers, with respect to this Agreement or the transactions provided for herein, or make any statement or acknowledgment of the existence of, or reveal the status of, this Agreement or the transactions provided for herein, without the prior consent of the other parties, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, nothing in this Section 8.3 shall prevent any of the parties hereto from making such public announcements or filings as it may consider necessary in order to satisfy its legal obligations, or from releasing a public statement mutually acceptable to the parties hereto upon the completion of the offering contemplated hereby. 8.4 Further Assurances. The parties agree to cooperate fully to execute such further instruments, documents and agreements and to give such further written assurances, as may be reasonably requested by any party to better evidence and reflect the transactions described herein and contemplated hereby, and to carry into effect the intents and purposes of this Agreement. 8.5 Notification of Effectiveness of Registration Statement. The Company covenants that it will provide written notice to each Purchaser (which notice may be in electronic form) that the Company's registration statement on Form S-3 registering the Shares sold hereunder to the Purchasers has been declared effective by the SEC, which notice shall be given promptly, but in no event more than two (2) days after the Company has received notice of such effectiveness from the SEC. 8.6 Rights Cumulative. Each and all of the various rights, powers and remedies of the parties shall be considered to be cumulative with and in addition to any other rights, powers and remedies which such parties may have at law or in equity in the event of the breach of any of the terms of this Agreement. The exercise or partial exercise of any right, power or remedy shall neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party. 8.7 Pronouns. All pronouns or any variation thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person, persons, entity or entities may require. 8.8 Notices. (a) Any notices, reports or other correspondence (hereinafter collectively referred to as "CORRESPONDENCE") required or permitted to be given hereunder shall be sent by postage prepaid first class mail, courier or facsimile or delivered by hand to the party to whom such correspondence is required or permitted to be given hereunder. The date of giving any notice shall be the date of its actual receipt. (b) All correspondence to the Company shall be addressed as follows: La Jolla Pharmaceutical Company 6455 Nancy Ridge Drive San Diego, CA 92121 Attention: Steven B. Engle Facsimile: (858) 452-6893 with a copy to: Gibson, Dunn & Crutcher LLP 4 Park Plaza, Suite 1700 Irvine, California 92614 Attention: Leonard J. McGill Facsimile: (949) 451-4220 (c) All correspondence to any Purchaser shall be sent to such Purchaser at the address set forth in Exhibit A, with a copy to: Kelley Drye & Warren LLP 101 Park Avenue New York, NY 10178 Attention: Salvatore J. Vitiello Facsimile: (212) 808-7897 (d) Any entity may change the address to which correspondence to it is to be addressed by notification as provided for herein. 8.9 Captions. The captions and paragraph headings of this Agreement are solely for the convenience of reference and shall not affect its interpretation. 8.10 Severability. Should any part or provision of this Agreement be held unenforceable or in conflict with the applicable laws or regulations of any jurisdiction, the invalid or unenforceable part or provisions shall be replaced with a provision which accomplishes, to the extent possible, the original business purpose of such part or provision in a valid and enforceable manner, and the remainder of this Agreement shall remain binding upon the parties hereto. 8.11 Governing Law; Injunctive Relief. (a) This Agreement shall be governed by and construed in accordance with the internal and substantive laws of the State of California and without regard to any conflicts of laws concepts that would apply the substantive law of some other jurisdiction. (b) Each of the parties hereto acknowledges and agrees that damages will not be an adequate remedy for any material breach or violation of this Agreement if such material breach or violation would cause immediate and irreparable harm (an "IRREPARABLE BREACH"). Accordingly, in the event of a threatened or ongoing Irreparable Breach, each party hereto shall be entitled to seek, in any state or federal court in the State of California, equitable relief of a kind appropriate in light of the nature of the ongoing or threatened Irreparable Breach, which relief may include, without limitation, specific performance or injunctive relief; provided, however, that if the party bringing such action is unsuccessful in obtaining the relief sought, the moving party shall pay the non-moving party's costs, including actual attorney's fees, incurred in connection with defending such action. Such remedies shall not be the parties' exclusive remedies, but shall be in addition to all other remedies provided in this Agreement. 8.12 Waiver. No waiver of any term, provision or condition of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition of this Agreement. 8.13 Expenses. Each party will bear its own costs and expenses in connection with this Agreement; provided, however, that the Company shall pay all costs and expenses of KD&W, as counsel to the Purchasers, incurred through the Closing Date, up to an aggregate of $35,000, plus reasonable out-of-pocket expenses, which amount shall be payable on the Closing Date and further provided that if this Agreement is terminated pursuant to Section 7 prior to the Closing Date, then the costs and expenses of KD&W shall be payable by the Company no later than ten (10) days after the date of termination. 8.14 Assignment. The rights and obligations of the parties hereto shall inure to the benefit of and shall be binding upon the authorized successors and permitted assigns of each party. No Purchaser may assign its rights or obligations under this Agreement or designate another person (i) to perform all or part of its obligations under this Agreement or (ii) to have all or part of its rights and benefits under this Agreement, in each case without the prior written consent of the Company, which consent will not be unreasonably withheld. In the event of any assignment in accordance with the terms of this Agreement, the assignee shall specifically assume and be bound by the provisions of the Agreement by executing and agreeing to an assumption agreement reasonably acceptable to the other party. 8.15 Survival. The respective representations and warranties given by the parties hereto, and the other covenants and agreements contained herein, shall survive the Closing Date and the consummation of the transactions contemplated herein for a period of two years, without regard to any investigation made by any party. 8.16 Entire Agreement. This Agreement along with the schedules and exhibits attached hereto and incorporated herewith constitute the entire agreement between the parties hereto respecting the subject matter hereof and supersedes all prior agreements, negotiations, understandings, representations and statements respecting the subject matter hereof, whether written or oral. No modification, alteration, waiver or change in any of the terms of this Agreement shall be valid or binding upon the parties hereto unless made in writing and duly executed by the Company and (a) prior to Closing, not less than five (5) Purchasers who represent at least fifty percent (50%) of the Shares being sold hereunder or (b) following Closing, the Majority Purchasers; provided, however, that, in each case, no such amendment shall increase the obligations of any Purchaser without such Purchaser's written consent. 8.17 Confidential Information. Each of the Company and each Purchaser agrees to keep confidential, and not to disclose to or use for the benefit of any third party, the terms of this Agreement or any other information which at any time is communicated by the other party as being confidential, without the prior written approval of the other party; provided, however, that this provision shall not apply to information which, at the time of disclosure, is already part of the public domain (except by breach of this Agreement) and information which is required to be disclosed by law (including, without limitation, pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act and the Exchange Act). 8.18 Indemnification Regarding Brokers' Fees. The Company shall indemnify and hold harmless each Purchaser against, and from any liability, cost or expense, resulting from the Company's fee agreement with UBS, or owing to PGE, in connection with this Agreement or the transactions contemplated hereby. 8.19 Counterparts. This Agreement may be executed simultaneously 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. [The remainder of this page has been intentionally left blank; signature page follows.] IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase Agreement as of the date and year first above written. LA JOLLA PHARMACEUTICAL COMPANY By: Steven B. Engle Chief Executive Officer THE PURCHASER'S SIGNATURE TO THE INVESTOR QUESTIONNAIRE DATED EVEN DATE HEREWITH SHALL CONSTITUTE THE PURCHASER'S SIGNATURE TO THIS STOCK PURCHASE AGREEMENT. EX-4.2 4 a78437ex4-2.txt EXHIBIT 4.2 EXHIBIT 4.2 FORM OF REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of January ____, 2002 by and among (i) La Jolla Pharmaceutical Company, a Delaware corporation (the "COMPANY"), (ii) each person listed on Exhibit A attached hereto (collectively, the "INITIAL INVESTORS" and each individually, an "INITIAL INVESTOR"), and (iii) each person or entity that subsequently becomes a party to this Agreement pursuant to, and in accordance with, the provisions of Section 12 hereof (each an "INVESTOR PERMITTED Transferee" and collectively, the "INVESTOR PERMITTED TRANSFEREES"). WHEREAS, the Company has agreed to issue and sell to the Initial Investors, and the Initial Investors have agreed to purchase from the Company, an aggregate of 7,000,000 shares (the "PURCHASED SHARES") of the Company's common stock, $0.01 par value per share (the "COMMON STOCK"), all upon the terms and conditions set forth in that certain Stock Purchase Agreement, dated of even date herewith, between the Company and the Initial Investors (the "STOCK PURCHASE AGREEMENT"); and WHEREAS, the terms of the Stock Purchase Agreement provide that it shall be a condition precedent to the closing of the transactions thereunder, for the Company and the Initial Investors to execute and deliver this Agreement. NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto hereby agree as follows: 1. Definitions. The following terms shall have the meanings provided therefor below or elsewhere in this Agreement as described below: "Board" shall mean the board of directors of the Company. "Closing" shall have the meaning ascribed to such term in the Stock Purchase Agreement. "Closing Date" shall have the meaning ascribed to such term in the Stock Purchase Agreement. "Effectiveness Deadline" shall be one hundred five (105) days after the Closing Date. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and all of the rules and regulations promulgated thereunder. "Filing Date Deadline" shall be fifteen (15) business days after the Closing Date. "Investors" shall mean, collectively, the Initial Investors and the Investor Permitted Transferees; provided, however, that the term "Investors" shall not include any of the Initial Investors or any of the Investor Permitted Transferees that ceases to own or hold any Purchased Shares. "Majority Holders" shall mean, at the relevant time of reference thereto, those Investors holding and/or having the right to acquire, as the case may be, more than fifty percent (50%) of the Registrable Shares held by all of the Investors. "NASD" shall mean the National Association of Securities Dealers, Inc. "Qualifying Holder" shall have the meaning ascribed thereto in Section 12 hereof. "Registrable Shares" shall mean (i) the Purchased Shares and (ii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution (including a stock split or reverse stock split) with respect to, or in exchange for, or in replacement of, the shares referenced in (i) above after the Closing and prior to the date upon which the Registration Statement is declared effective by the SEC; provided, however, such term shall not, after the Mandatory Registration Termination Date, include any of the Purchased Shares that become or have become eligible for resale pursuant to subsection (k) of Rule 144. "Rule 144" shall mean Rule 144 promulgated under the Securities Act and any successor or substitute rule, law or provision. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder. 2. Effectiveness; Termination. This Agreement shall become effective and legally binding only if the Closing occurs. This Agreement shall terminate and be of no further force or effect, automatically and without any action being required of any party hereto, upon the termination of the Stock Purchase Agreement pursuant to Section 7 thereof. Nothing contained herein or in any agreement or document relating to this transaction, and no action taken by any Investor, shall be deemed to constitute the Investors as, or to create any presumption that the Investors are in any way acting in concert or as, a group with respect to the obligations or transaction hereunder. Each Investor shall be entitled to independently protect and enforce its rights hereunder. 3. Mandatory Registration. (a) Within fifteen (15) business days after the Closing Date, the Company shall prepare and file with the SEC a registration statement on Form S-3 for the purpose of registering under the Securities Act all of the Registrable Shares for resale by, and for the account of, the Investors as selling stockholders thereunder (the "REGISTRATION STATEMENT"). The Registration Statement shall permit the Investors to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, any or all of the Registrable Shares. The Company shall be required to keep the Registration Statement effective until such date that is the earlier of (i) the date when all of the Registrable Shares registered thereunder shall have been sold or (ii) the date on which all of the Registrable Shares may be immediately sold without restriction (including without any limitation as to volume or manner of sale by each Investor) and without registration under the Securities Act (the "MANDATORY REGISTRATION TERMINATION DATE"). Thereafter, the Company shall be entitled to withdraw the Registration Statement and the Investors shall have no further right to offer or sell any of the Registrable Shares pursuant to the Registration Statement (or any prospectus relating thereto). (b) Unless otherwise agreed to by the Company, the offer and sale of the Registrable Shares pursuant to the Registration Statement shall not be underwritten. (c) The Company represents and warrants that, as of the date of this Agreement, it meets the requirements for the use of Form S-3 for registration of the resale by the Investors of the Registrable Shares, and it will use its commercially reasonable efforts to continue to meet such requirements during the period in which it takes to have the Registration Statement declared effective. (d) The Company shall cause all of the Registrable Shares to be listed on The Nasdaq National Market. (e) This Section 3(e) shall apply to the Company's obligation under Section 3(a) hereof to file the Registration Statement with the SEC and to cause such Registration Statement to become effective. The Company and Initial Investors agree that the Investors will suffer damages if the Registration Statement is not filed on or prior to the Filing Date Deadline and not declared effective by the SEC on or prior to the Effectiveness Deadline. The Company and the Initial Investors further agree that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if (i) the Registration Statement is not filed on or prior to the Filing Date Deadline; (ii) the Registration Statement is not declared effective prior to the Effectiveness Deadline; or (iii) the Company fails to file with the SEC a request for acceleration in accordance with Rule 12d1-2 promulgated under the Exchange Act as promptly as practicable after the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be reviewed, or not subject to further review (each of the events listed in (i)-(iii) above being referred to as an "EVENT"), then the Company shall pay as liquidated damages for any such failure and not as a penalty (the "LIQUIDATED DAMAGES") $250,000 (the "LIQUIDATED DAMAGES AMOUNT") to the Investors for each thirty (30) day period (pro rated for any period less than thirty (30) days) following the Event until the applicable Event has been cured; provided, however, that if the Registration Statement is not declared effective by the SEC within one hundred eighty (180) days after the Closing Date, then the Liquidated Damages Amount shall increase to $500,000 for each such subsequent thirty (30) day period (pro rated for any period less than thirty (30) days). Each Liquidated Damages payment, if any, shall by payable to the Investors on a pro rata basis among them based on the number of shares each Initial Investor purchased pursuant to the Stock Purchase Agreement. In any event, no Liquidated Damages shall accrue after the twelve (12) month anniversary of the Closing Date. Payments to be made pursuant to this Section 3(e) shall be due and payable in immediately available funds within three days of such payment becoming payable hereunder. The parties agree that the Liquidated Damages represent a reasonable estimate on the part of the parties, as of the date of this Agreement, of the amount of damages that may be incurred by the Investors if the Registration Statement is not filed on or prior to the Filing Date Deadline or has not been declared effective by the SEC on or prior to the Effectiveness Deadline. 4. "Piggyback" Registration Rights. (a) If, at any time after the Mandatory Registration Termination Date, the Company proposes to register any of its Common Stock under the Securities Act, whether as a result of a primary or secondary offering of Common Stock or pursuant to registration rights granted to holders of other securities of the Company (but excluding in all cases any registrations to be effected on Forms S-4 or S-8 or other applicable successor forms), the Company shall, each such time, give to the Investors holding Registrable Shares written notice of its intent to do so. Upon the written request of any such Investor given within 20 days after the giving of any such notice by the Company, the Company shall use reasonable efforts to cause to be included in such registration the Registrable Shares of such selling Investor, to the extent requested to be registered; provided that (i) the number of Registrable Shares proposed to be sold by such selling Investor is equal to at least twenty-five percent (25%) of the total number of Registrable Shares then held by such participating selling Investor, (ii) such selling Investor agrees to sell those of its Registrable Shares to be included in such registration in the same manner and on the same terms and conditions as the other shares of Common Stock which the Company proposes to register and (iii) if the registration is to include shares of Common Stock to be sold for the account of the Company or any party exercising demand registration rights pursuant to any other agreement with the Company, the proposed managing underwriter does not advise the Company that in its opinion the inclusion of such selling Investor's Registrable Shares (without any reduction in the number of shares to be sold for the account of the Company or such party exercising demand registration rights) is likely to affect materially and adversely the success of the offering or the price that would be received for any shares of Common Stock offered, in which case the rights of such selling Investor shall be as provided in Section 4(b) hereof. (b) If a registration pursuant to Section 4(a) hereof involves an underwritten offering and the managing underwriter shall advise the Company in writing that, in its opinion, the number of shares of Common Stock requested by the Investors to be included in such registration is likely to affect materially and adversely the success of the offering or the price that would be received for any shares of Common Stock offered in such offering, then, notwithstanding anything in Section 4(a) to the contrary, the Company shall only be required to include in such registration, to the extent of the number of shares of Common Stock which the Company is so advised can be sold in such offering, (i) first, the number of shares of Common Stock proposed to be included in such registration for the account of the Company and/or any stockholders of the Company (other than the Investors) that have exercised demand registration rights, in accordance with the priorities, if any, then existing among the Company and/or such stockholders of the Company with registration rights (other than the Investors), and (ii) second, the shares of Common Stock requested to be included in such registration by all other stockholders of the Company who have piggyback registration rights (including, without limitation, the Investors), pro rata among such other stockholders (including, without limitation, the Investors) on the basis of the number of shares of Common Stock that each of them requested to be included in such registration. (c) In connection with any offering involving an underwriting of shares under this Section 4, the Company shall not be required under Section 4 hereof or otherwise to include the Registrable Shares of any Investor therein unless such Investor accepts and agrees to the terms of the underwriting, which shall be reasonable and customary, as agreed upon between the Company and the underwriters selected by the Company. 5. Obligations of the Company. In connection with the Company's obligation under Section 3 and 4 hereof to file the Registration Statement with the SEC and to use its best efforts to cause the Registration Statement to become effective, the Company shall, as expeditiously as reasonably possible: (a) Prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Shares covered by the Registration Statement; provided, however, that before filing a registration statement or prospectus or any amendments or supplements thereto, or comparable statements under securities or blue sky laws of any jurisdiction, the Company will furnish to Kelley, Drye & Warren LLP, Attn: Salvatore J. Vitiello, as designated counsel for the Investors participating in the planned offering (the "DESIGNATED COUNSEL"), copies of all such documents proposed to be filed (including all exhibits thereto), which documents will be subject to the reasonable review and reasonable comment of such counsel. (b) Furnish to the selling Investors such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents (including, without limitation, prospectus amendments and supplements as are prepared by the Company in accordance with Section 5(a) above) as the selling Investors may reasonably request in order to facilitate the disposition of such selling Investors' Registrable Shares. (c) Promptly notify the selling Investors, at any time when a prospectus relating to the Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in or relating to the Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading; and, thereafter, the Company will promptly prepare (and, when completed, give notice to each selling Investor) a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Shares pursuant to the Registration Statement, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading; provided that upon such notification by the Company of the foregoing and instructing each selling Investor to cease to offer and sell Registrable Securities, each selling Investor will use its commercially reasonable efforts to cease its offer and sale of Registrable Shares until the Company has notified the selling Investors that it has prepared a supplement or amendment to such prospectus and delivered copies of such supplement or amendment to the selling Investors (it being understood and agreed by the Company that the foregoing proviso shall in no way diminish or otherwise impair the Company's obligation to promptly prepare a prospectus amendment or supplement as above provided in this Section 5(c) and deliver copies of same as above provided in Section 5(b) hereof). (d) Use commercially reasonable efforts to register and qualify the Registrable Shares covered by the Registration Statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably appropriate in the opinion of the Company and the managing underwriters, if any, or if reasonably requested by the Investors; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions; and provided further that (notwithstanding anything in this Agreement to the contrary with respect to the bearing of expenses) if any jurisdiction in which any of such Registrable Shares shall be qualified shall require that expenses incurred in connection with the qualification therein of any such Registrable Shares be borne by the selling Investors, then the selling Investors shall, to the extent required by such jurisdiction, pay their pro rata share of such qualification expenses. (e) Promptly notify (i) each selling Investor (A) any time when a registration statement, the prospectus relating thereto or any prospectus supplement related thereto or post-effective amendment has been filed, and with respect to the registration statement or any post-effective amendment, when the same has become effective, (B) of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation of any proceedings by any person to such effect, and promptly use all commercially reasonable efforts to obtain the release of such suspension, (C) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Shares for sale under the securities or blue sky laws of any jurisdiction or the initiation of any proceeding for such purpose, (D) when a prospectus relating to the registration is required to be delivered under the Securities Act, or (E) of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes and untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; and (ii) Designated Counsel of any request by the SEC for amendments or supplements to such registration statement or prospectus related thereto or for additional information. If the notification relates to an event described in Section 5(c), the Company shall in accordance with Section 5(a), promptly prepare and furnish to each Investor, if any, selling Registrable Shares covered by such registration statement, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading. (f) Cause all such Registrable Shares registered pursuant to this Agreement to be listed on each securities exchange on which similar securities issued by the Company are then listed, if the listing of such Registrable Shares is then permitted under the rules of such exchange, or if no similar securities are then so listed, to either cause all such Registrable Shares to be listed on a national securities exchange or to secure designation of all such Registrable Shares as a NASDAQ "national market system security" within the meaning of Rule 11Aa2-1 of the Exchange Act, or failing that, secure NASDAQ Authorization for such Registrable Shares. (g) Provide a transfer agent and registrar for all Registrable Shares registered pursuant to this Agreement and a CUSIP number for all such Registrable Shares, in each case not later than the effective date of such registration and, at the time of the sale of the Registrable Shares pursuant to an effective registration statement or in accordance with Section 6.3 of the Stock Purchase Agreement, use commercially reasonable efforts to cause the transfer agent to remove restrictive legends on the securities covered by such registration statement. (h) Promptly deliver to Designated Counsel copies of all correspondence between the SEC and the Company, its counsel or auditors and all memoranda relating to discussions with the SEC or its staff with respect to the registration statement, other than those portions of any such memoranda that contain information subject to attorney client privilege with respect to the Company, and, upon receipt of such confidentiality agreements as the Company may reasonably request, make reasonably available for inspection by Designated Counsel participating in any disposition to be effected pursuant to such registration statement, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company's officers, directors and employees to supply all information reasonably requested by Designated Counsel in connection with such registration statement. (i) Use commercially reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement. (j) Upon written request, furnish to each selling Investor participating in the offering, without charge, at least one (1) conformed copy of the registration statement and any post-effective amendments thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference). (k) Comply with all applicable rules and regulations of the SEC, and make generally available to its security holders, as soon as reasonably practicable after the effective date of the registration statement (and in any event within sixteen (16) months thereafter), an earnings statement (which need not be audited) covering the period of at least twelve (12) consecutive months beginning with the first day of the Company's first calendar quarter after the effective date of the registration statement, which earnings shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder. 6. Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement (including, without limitation, to maintain the accuracy of any information previously furnished by Investors for use in the Registration Statement) that the selling Investors shall furnish to the Company such information regarding them and the securities held by them as the Company shall reasonably request and as shall be required by applicable securities laws in order to effect any registration by the Company pursuant to this Agreement. 7. Expenses of Registration. All of the expenses incurred by the Company in connection with the registration of the Registrable Shares pursuant to this Agreement (excluding underwriting, brokerage and other selling commissions and discounts), including without limitation all registration and qualification and filing fees, printing, and fees and disbursements of its counsel and, to the extent provided in Section 8.13 of the Stock Purchase Agreement, one counsel to the Investors, shall be borne by the Company, whether or not such Registration Statement becomes effective or remains effective for the period contemplated hereby. 8. Delay of Registration. No Investor shall take any action to restrain, enjoin or otherwise delay any registration as the result of any controversy which might arise with respect to the interpretation or implementation of this Agreement. 9. Indemnification. (a) To the extent permitted by law, the Company will indemnify and hold harmless each selling Investor, its directors, officers, employees, fiduciaries, members, managers, or general or limited partners (and the directors, officers, employees and stockholders thereof), any broker/dealer acting on behalf of any selling Investor and each officer and director of such selling Investor, such broker/dealer and each person, if any, who controls such selling Investor, or broker/dealer and each person who controls such broker/dealer within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, and expenses (including reasonable fees of counsel and any amounts paid in any settlement effected with the Company's prior written consent) to which they may become subject (including the settlement of litigation) under the Securities Act, the Exchange Act, state securities laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue or alleged untrue statement of any material fact contained in the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, in any preliminary prospectus or final prospectus relating thereto or in any amendments or supplements to the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, or any such preliminary prospectus or final prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading or any violation or alleged violation by the Company of the Securities Act, the Exchange Act, state securities laws, or otherwise or any rule or regulation promulgated under the Securities Act, the Exchange Act, state securities laws or NASDAQ or (ii) any failure of the Company to fulfill any undertaking included in the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof; and will reimburse such selling Investor, broker/dealer or such officer, director or controlling person for any expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action (including reasonable expenses of legal counsel); provided, however, that the indemnity agreement contained in this Section 9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, damage, liability or action to the extent that it arises out of or is based upon an untrue statement or alleged untrue statement or omission made in connection with the Registration Statement or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, or any preliminary prospectus or final prospectus relating thereto or any amendments or supplements thereto or any such preliminary prospectus or final prospectus, in reliance upon and in conformity with written information furnished expressly for use in connection with the Registration Statement or any such preliminary prospectus or final prospectus by the selling Investors or for them or controlling person with respect to them. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the sale of such Registrable Shares by such selling Investor. (b) To the extent permitted by law, each selling Investor will severally, and not jointly, indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, each person, if any, who controls the Company within the meaning of the Securities Act, any investment banking firm acting as underwriter for the Company or the selling Investors, or any broker/dealer acting on behalf of the Company or any selling Investor, and all other selling Investors against any losses, claims, damages or liabilities to which the Company or any such director, officer, controlling person, underwriter, or broker/dealer or such other selling Investor may become subject to, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any untrue or alleged untrue statement of any material fact contained in the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, or any preliminary prospectus or final prospectus, relating thereto or in any amendments or supplements to the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, or any such preliminary prospectus or final prospectus, or arise out of or are based upon the 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 and only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, in any preliminary prospectus or final prospectus relating thereto or in any amendments or supplements to the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, or any such preliminary prospectus or final prospectus, in reliance upon and in conformity with written information furnished by the selling Investor expressly for use in connection with the Registration Statement, or any preliminary prospectus or final prospectus; and such selling Investor will reimburse any expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter, broker/dealer or other selling Investor in connection with investigating or defending any such loss, claim, damage, liability or action (including reasonable expenses of legal counsel); provided, however, that the liability of each selling Investor hereunder shall be limited to the proceeds (net of underwriting discounts and commissions, if any) received by such selling Investor from the sale of Registrable Shares covered by the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof; and provided, further, however, that the indemnity agreement contained in this Section 9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of those selling Investor(s) against which the request for indemnity is being made (which consent shall not be unreasonably withheld). Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and, as relevant, shall survive the sale of such Registrable Shares by any selling Investor. (c) Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 9, notify the indemnifying party in writing of the commencement thereof and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party desires, jointly with any other indemnifying party similarly noticed, to assume at its expense the defense thereof with counsel mutually satisfactory to the indemnifying parties with the consent of the indemnified party which consent will not be unreasonably withheld, conditioned or delayed. In the event that the indemnifying party assumes any such defense, the indemnified party may participate in such defense with its own counsel and at its own expense; provided, however, that the counsel for the indemnifying party shall act as lead counsel in all matters pertaining to such defense or settlement of such claim and the indemnifying party shall only pay for such indemnified party's expenses for the period prior to the date of its participation on such defense. The failure to notify an indemnifying party promptly of the commencement of any such action, if prejudicial to his ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 9, but the omission so to notify the indemnifying party will not relieve him of any liability which he may have to any indemnified party otherwise other than under this Section 9. (d) If the indemnification provided for in this Section 9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, claim or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. If, however, the allocation provided in the first sentence of this paragraph is not permitted by applicable law, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative faults but also the relative benefits of the indemnifying party and the indemnified party as well as any other relevant equitable considerations. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 9(d) were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the preceding sentences of this Section 9(d). The amount paid or payable in respect of any claim shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending such loss, claim, damage or liability (including legal expenses reasonably incurred). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding anything in this Section 9(d) to the contrary, no indemnifying party shall be required pursuant to this Section 9(d) to contribute any amount in excess of the net proceeds received by such indemnifying party from the sale of Registrable Shares in the offering to which the loss, claims, damage or liability of the indemnified parties relate, less the amount of any indemnification payment made by such indemnifying party pursuant to Section 9(b). (e) The obligations of the Company and the selling Investors under this Section 9 shall survive the completion of any offering of Registrable Shares in a Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, and otherwise. (f) Notwithstanding anything to the contrary herein, the indemnifying party shall not be entitled to settle any claim, suit or proceeding unless in connection with such settlement the indemnified party receives an unconditional release with respect to the subject matter of such claim, suit or proceeding and such settlement does not contain any admission of fault by the indemnified party. 10. Reports under the Exchange Act. With a view to making available to the Investors the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit the Investors to sell the Purchased Shares to the public without registration, the Company agrees to use commercially reasonable efforts: (i) to make and keep public information available, as those terms are understood and defined in the General Instructions to Form S-3, or any successor or substitute form, and in Rule 144; (ii) to file with the SEC in a timely manner all reports and other documents required to be filed by an issuer of securities registered under the Securities Act or the Exchange Act; (iii) as long as any Investor owns any Purchased Shares, to furnish in writing upon such Investor's request a written statement by the Company that it has complied with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act, and to furnish to such Investor a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as may be reasonably requested in availing such Investor of any rule or regulation of the SEC permitting the selling of any such Purchased Shares without registration; and (iv) undertake any additional actions reasonably necessary to maintain the availability of the Registration Statement or the use of Rule 144. 11. Deferral and Lock-up. Notwithstanding anything in this Agreement to the contrary, if the Company shall furnish to the selling Investors a certificate signed by the President or Chief Executive Officer of the Company stating that the Board of Directors of the Company has made the good faith determination (i) that continued use by the selling Investors of the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof, for purposes of effecting offers or sales of Registrable Shares pursuant thereto would require, under the Securities Act, premature disclosure in the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof (or the prospectus relating thereto) of material, nonpublic information concerning the Company, its business or prospects or any proposed material transaction involving the Company, (ii) that such premature disclosure would be materially adverse to the Company, its business or prospects or any such proposed material transaction or would make the successful consummation by the Company of any such material transaction significantly less likely and (iii) that it is therefore essential to suspend the use by the Investors of such Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof (and the prospectus relating thereto) for purposes of effecting offers or sales of Registrable Shares pursuant thereto, then the right of the selling Investors to use the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof (and the prospectus relating thereto) for purposes of effecting offers or sales of Registrable Shares pursuant thereto shall be suspended for not more than two 30-day periods in a twelve month period (the "SUSPENSION PERIOD(S)") after delivery by the Company of the certificate referred to above in this Section 11. In no event, however, will any suspension be any longer than is reasonably necessary to avoid the adverse effect. During the Suspension Period, none of the Investors shall offer or sell any Registrable Shares publicly pursuant to or in reliance upon the Registration Statement, or any registration statement pursuant to which Registrable Shares are registered pursuant to Section 4 hereof (or the prospectus relating thereto). 12. Transfer of Registration Rights. None of the rights of any Investor under this Agreement shall be transferred or assigned to any person unless (i) such person is a Qualifying Holder (as defined below), and (ii) such person agrees to become a party to, and bound by, all of the terms and conditions of, this Agreement by duly executing and delivering to the Company an Instrument of Adherence in the form attached as Exhibit B hereto. For purposes of this Section 12, the term "QUALIFYING HOLDER" shall mean, with respect to any Investor, (i) any partner thereof, (ii) any corporation, partnership controlling, controlled by, or under common control with, such Investor or any partner thereof, or (iii) any other direct transferee from such Investor of at least 75,000 shares included as Registrable Shares on the date hereof that are held or that may be acquired by such Investor. None of the rights of any Investor under this Agreement shall be transferred or assigned to any person (including, without limitation, a Qualifying Holder) that acquires Registrable Shares in the event that and to the extent that such person is eligible to resell such Registrable Shares pursuant to Rule 144(k) of the Securities Act or may otherwise resell such Registrable Shares pursuant to an exemption from the registration provisions of the Securities Act. 13. Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Investors holding a majority of the Registrable Shares then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder to include such securities in any registration statement filed pursuant to Section 3 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Shares of the Investors that is included. 14. No Required Sale. Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Investor to sell any Registrable Shares pursuant to any effective registration statement. 15. Nominees for Beneficial Owners. If Registrable Shares are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its option, be treated as the holder of such Registrable Shares for purposes of any request or other action by any Investor pursuant to this Agreement (or any determination of any number or percentage of shares constituting Registrable Shares held by any Investor contemplated by this Agreement); provided that the Company shall have received assurances reasonably satisfactory to it of such beneficial ownership. 16. Entire Agreement. This Agreement along with the schedules and exhibits attached hereto and incorporated herewith constitute and contain the entire agreement and understanding of the parties with respect to the subject matter hereof, and supersedes any and all prior negotiations, correspondence, agreements or understandings with respect to the subject matter hereof and supercedes all prior agreements, negotiations, understandings, representations and statements respecting the subject matter hereof, whether oral or written. 17. Miscellaneous. (a) Amendment. No amendment, modification, alteration, waiver or change in any of the terms of this Agreement shall be valid or binding upon the parties hereto unless made in writing and duly executed by the Company and (a) prior to Closing, not less than five (5) Initial Investors who represent at least fifty percent (50%) of the Purchased Shares or (b) following Closing, a majority of the Investors; provided, however, that in each case, no such amendment shall increase the obligations of any Investor without such Investor's written consent. (b) Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of California and without regard to any conflicts of laws concepts that would apply the laws of another jurisdiction. (c) Assignment. The rights and obligations of the parties hereto shall inure to the benefit of, and shall be binding upon the authorized successors and permitted assigns of each party; provided that the terms and conditions of Section 12 hereof are satisfied. This Agreement shall also be binding upon and inure to the benefit of any transferee of any of the Purchased Shares; provided the terms and conditions of Section 12 hereof are satisfied. Notwithstanding anything in this Agreement to the contrary, if at any time any Investor shall cease to own any Registrable Shares, all of such Investor's rights under this Agreement shall immediately terminate; provided, however, that if such Investor ceases to own Registrable Shares because such shares were sold pursuant to an effective registration statement filed pursuant to Section 3 or 4 hereof, then such Investor shall continue to be subject to Section 9 hereof, as provided in Section 9(e) hereof. In the event of any assignment by an Investor in accordance with the terms of this Agreement, the assignee shall specifically assume and be bound by the provisions of the Agreement by executing the Instrument of Adherence attached hereto as Exhibit B. (d) Specific Performance. Each of the parties hereto acknowledges and agrees that damages will not be an adequate remedy for any material breach or violation of this Agreement if such material breach or violation would cause immediate and irreparable harm (an "IRREPARABLE BREACH"). Accordingly, in the event of a threatened or ongoing Irreparable Breach, each party hereto shall be entitled to seek, in any state or federal court in the State of California, equitable relief of a kind appropriate in light of the nature of the ongoing or threatened Irreparable Breach, which relief may include, without limitation, specific performance or injunctive relief; provided, however, that if the party bringing such action is unsuccessful in obtaining the relief sought, the moving party shall pay the non-moving party's costs, including actual attorney's fees, incurred in connection with defending such action. Such remedies shall not be the parties' exclusive remedies, but shall be in addition to all other remedies provided in this Agreement. (e) Notice. Any notices, reports or other correspondence (hereinafter collectively referred to as "CORRESPONDENCE") required or permitted to be given hereunder shall be sent by courier (overnight or same day) or facsimile or delivered by hand to the party to whom such correspondence is required or permitted to be given hereunder. The date of giving any notice shall be the date of its actual receipt. (i) All correspondence to the Company shall be addressed as follows: La Jolla Pharmaceutical Company 6455 Nancy Ridge Drive San Diego, CA 92121 Attention: Chief Executive Officer Facsimile: (858) 626-2851 with a copy to: Gibson, Dunn & Crutcher LLP 4 Park Plaza, Suite 1700 Irvine, California 92614 Attention: Leonard J. McGill Facsimile: (949) 451-4220 (ii) All correspondence to any Investor shall be sent to such Investor at the address set forth in Exhibit A, with a copy to Designated Counsel at: Kelley Drye & Warren LLP 101 Park Avenue New York, New York 10178 Attention: Salvatore J. Vitiello, Esq. Facsimile: (212) 808-7897 (iii) Any entity may change the address to which correspondence to it is to be addressed by notification as provided for herein. (f) Waiver. No waiver of any term, provision or condition of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition of this Agreement. (g) Counterparts. This Agreement may be executed 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. (The remainder of this page has been intentionally left blank; signature page follows) IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date and year first above written. LA JOLLA PHARMACEUTICAL COMPANY By: Steven B. Engle Chief Executive Officer THE INITIAL INVESTOR'S SIGNATURE TO THE INVESTOR QUESTIONNAIRE DATED EVEN DATE HEREWITH SHALL CONSTITUTE THE INITIAL INVESTOR'S SIGNATURE TO THIS REGISTRATION RIGHTS AGREEMENT. EX-99.1 5 a78437ex99-1.txt EXHIBIT 99.1 EXHIBIT 99.1 COMPANY CONTACT: Andrew Wiseman, Ph.D. Sr. Director of Business Development La Jolla Pharmaceutical Company 858-646-6615 andrew.wiseman@ljpc.com LA JOLLA PHARMACEUTICAL COMPANY ANNOUNCES $51.6 MILLION PRIVATE PLACEMENT SAN DIEGO, JANUARY 15, 2002 - La Jolla Pharmaceutical Company (Nasdaq: LJPC) today announced that it has entered into definitive purchase agreements for the sale of an aggregate of seven million shares of newly issued Common Stock to selected institutional and other accredited investors for gross proceeds of approximately $51.6 million. The purchase price was $7.37 per share. The transactions are expected to close by January 18, 2002. UBS Warburg LLC and Pacific Growth Equities, Inc. served as placement agents for these transactions. The shares of Common Stock have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration, or an applicable exemption from registration. The Company has agreed to register these shares for resale. This press release does not constitute an offer of any securities for sale. The Company intends to use net proceeds from this private placement for research and development, including clinical trials of the Company's product candidates, and for working capital and general corporate purposes. La Jolla Pharmaceutical Company is a biotechnology company developing therapeutics for antibody-mediated autoimmune diseases. Statements made in this press release about La Jolla Pharmaceutical's sale of stock and plans regarding use of the net proceeds from the sale are forward-looking statements and are subject to a number of uncertainties that could cause actual events to differ materially from the statements made, including risks associated with the success of clinical trials, the progress of research and product development programs, the regulatory approval process, competitive products, future capital requirements and the extent and breadth of La Jolla Pharmaceutical's patent portfolio. Interested parties are urged to review the risks detailed from time to time in La Jolla Pharmaceutical Company's Securities and Exchange Commission filings, including the report on Form 10-K as amended for the year ended December 31, 2000 and in Form 10-Q for the quarter ended September 30, 2001. -----END PRIVACY-ENHANCED MESSAGE-----

EX-4.1

                                                                     EXHIBIT 4.1

                        FORM OF STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of January
___, 2002 by and between La Jolla Pharmaceutical Company, a Delaware corporation
with its principal office at 6455 Nancy Ridge Drive, San Diego, California 92121
(the "COMPANY"), and the several purchasers named in Exhibit A attached hereto
(each, a "PURCHASER" and collectively, the "PURCHASERS").

         WHEREAS, the Company desires to issue and sell to the Purchasers an
aggregate of up to 7,000,000 shares (the "SHARES") of the authorized but
unissued shares of Company common stock, $0.01 par value per share (the "COMMON
STOCK"); and

         WHEREAS, the Purchasers, severally, wish to purchase the Shares on the
terms and subject to the conditions set forth in this Agreement.

         NOW THEREFORE, in consideration of the mutual agreements,
representations, warranties and covenants herein contained, the parties hereto
agree as follows:

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

         "Affiliate" of a party means any corporation or other business entity
controlled by, controlling or under common control with such party. For this
purpose "CONTROL" shall mean direct or indirect beneficial ownership of fifty
percent (50%) or more of the voting or income interest in such corporation or
other business entity.

         "Closing Date" means the date of the Closing.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and all of the rules and regulations promulgated thereunder.

         "GAAP" means United States generally accepted accounting principles.

         "KD&W" means Kelley Drye & Warren LLP.

         "Majority Purchasers" shall mean Purchasers which, at any given time,
hold greater than fifty percent (50%) of the voting power of the outstanding
Shares.

         "Material Adverse Effect" shall mean a material adverse effect on the
prospects (financial or otherwise), condition, business, operations, assets,
liabilities (including contingent liabilities required to be reserved against in
accordance with GAAP), or results of operations of the Company.

         "NASD" means the National Association of Securities Dealers, Inc.

         "Registration Rights Agreement" shall mean that certain Registration
Rights Agreement, dated as of the Closing Date, among the Company and the
Purchasers.

         "SEC" shall mean the Securities and Exchange Commission.

         "Securities Act" shall mean the Securities Act of 1933, as amended, and
all of the rules and regulations promulgated thereunder.

2.       Purchase and Sale of Shares.

         2.1 Purchase and Sale. Subject to and upon the terms and conditions set
forth in this Agreement, the Company agrees to issue and sell to each Purchaser,
and each Purchaser, severally, hereby agrees to purchase from the Company, at
the Closing, the number of shares of Common Stock set forth opposite the name of
such Purchaser under the heading "Number of Shares to be Purchased" on Exhibit A
hereto, at a purchase price of $7.37 per share. The total purchase price payable
by each Purchaser for the number of shares of Common Stock that such Purchaser
is hereby agreeing to purchase is set forth opposite the name of such Purchaser
under the heading "Purchase Price" on Exhibit A hereto. The aggregate purchase
price payable by the Purchasers to the Company for all of the Shares shall be
$51,590,000. The Company shall be obligated to register the Shares pursuant to
the terms and conditions set forth in the Registration Rights Agreement.

         2.2 Closing. The closing of the transactions contemplated under this
Agreement (the "CLOSING") shall take place at 10:00 a.m. at the offices of
Gibson, Dunn & Crutcher LLP in Irvine, California on January __, 2001, or at
such other location, date and time as may be agreed upon between the Purchasers
and the Company (the "CLOSING DATE").

         2.3 Independent Purchasers. The Company acknowledges and agrees that
each of the Purchasers is acting solely in the capacity of an arm's length
purchaser with respect to this Agreement and the transactions contemplated
hereby and that each Purchaser has separately negotiated the terms of this
Agreement. Nothing contained herein or in any agreement or document relating to
this transaction, and no action taken by any Purchaser, shall be deemed to
constitute the Purchasers as, or to create any presumption that the Purchasers
are in any way acting in concert or as, a group with respect to the obligations
or transaction hereunder. No Purchaser has relied upon any other Purchaser for
advice in entering into the transactions contemplated hereby. Each Purchaser
shall be entitled to independently protect and enforce its rights hereunder.

3. Representations and Warranties of the Company. The Company hereby represents
and warrants to each of the Purchasers as follows:

         3.1 Incorporation. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
qualified to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification, except
where the failure to so qualify would not have a Material Adverse Effect. The
Company has all requisite corporate power and authority, and all necessary
licenses and permits, to own and lease its properties and assets and to carry on
its business as now conducted, except to the extent failure to have any such
license or permit would not have a Material Adverse Effect. The Company does not
have any subsidiaries. The Company does not own or control, directly or
indirectly, any interest in any other corporation, partnership, limited
liability company, unincorporated business organization, association, trust or
other business entity.

         3.2 Capitalization. The authorized capital stock of the Company
consists of (i) 100,000,000 shares of Common Stock, of which 35,248,561 shares
are outstanding as of October 31, 2001, and (ii) 8,000,000 shares of preferred
stock, of which no shares are outstanding on the date hereof. Except as set
forth in Schedule 3.2 hereto, there are no existing options, warrants, calls,
contracts, demands or preemptive (or similar) rights, subscriptions or other
rights, agreements, arrangements or commitments of any character obligating the
Company to issue, transfer or sell, or cause to be issued, transferred or sold,

any shares of the capital stock of the Company or other equity interests in the
Company or any securities convertible into or exchangeable for such shares of
capital stock or other equity interests, and there are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of its capital stock or other equity interests. There are no
stockholder agreements, voting agreements, or similar agreements with respect to
the Common Stock to which the Company is a party, or to the knowledge of the
Company, by or between any stockholders of the Company or any of its Affiliates.

         3.3 Authorization. The Company has all requisite corporate power to
enter into this Agreement and the Registration Rights Agreement and to carry out
and perform its obligations under the terms of this Agreement and the
Registration Rights Agreement (including, without limitation, the issuance of
the Shares). All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution, delivery
and performance of this Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated herein and therein has been taken
or will be taken prior to the Closing Date. When executed and delivered by the
Company, each of this Agreement and the Registration Rights Agreement shall
constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such may be limited
by bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally and by general equitable principles.

         3.4 Valid Issuance of the Shares. The Shares being purchased by the
Purchasers hereunder will, upon issuance pursuant to the terms hereof, be
validly issued, fully paid and nonassessable. Except for blue sky filing fees,
if any, there are no state or city taxes, fees or other charges payable in
connection with the execution or delivery of this Agreement, the Registration
Rights Agreement and the Shares.

         3.5 Financial Statements. The Company has furnished to each Purchaser
its audited Statements of Income, Stockholders' Equity and Cash Flows for the
fiscal year ended December 31, 2000, its audited Balance Sheet as of December
31, 2000, its unaudited Statements of Income, Stockholders' Equity and Cash
Flows for the period from December 31, 2000 through September 30, 2001 and its
unaudited Balance Sheet as of September 30, 2001. All such financial statements
are hereinafter referred to collectively as the "FINANCIAL STATEMENTS." The
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved,
and fairly present, in all material respects, the financial position of the
Company and the results of its operations as of the date and for the periods
indicated thereon, except that the unaudited financial statements may not be in
accordance with generally accepted accounting principles because of the absence
of footnotes normally contained therein and are subject to normal year-end audit
adjustments which, individually, and in the aggregate, will not be material.
Since September 30, 2001, to the Company's knowledge, (i) there has been no
development or change (actual or threatened), individually or in the aggregate,
having a Material Adverse Effect, (ii) except as set forth in an SEC Document
(as defined below), there does not exist any condition reasonably likely to
result in a Material Adverse Effect and (iii) the Company has conducted its
business only in the ordinary course. The Company has no indebtedness,
obligations or liabilities of any kind (whether accrued, absolute, contingent or
otherwise, and whether due or to become due) which were not fully reflected in,
reserved against or otherwise described in the Financial Statements or the notes
thereto, or incurred in the ordinary course of business consistent with the
Company's past practices since September 30, 2001, and in any such case which
were required generally to be reflected in such Financial Statements under GAAP,
all of which individually and in the aggregate do not and would not have a
Material Adverse Effect.

         3.6 SEC Documents. The Company has furnished to each Purchaser, a true
and complete copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 2000, the Company's Quarterly Reports on Form 10-Q for three months
ended March 31, 2001, June 30, 2001 and

September 30, 2001 and any other statement, report, registration statement
(other than registration statements on Form S-8) or definitive proxy statement
filed by the Company with the SEC during the period commencing December 31, 2000
and ending on the date hereof. The Company will, promptly upon the filing
thereof, also furnish to each Purchaser all statements, reports (including,
without limitation, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K), registration statements and definitive proxy statements filed by the
Company with the SEC during the period commencing on the date hereof and ending
on the Closing Date (all such materials required to be furnished to each
Purchaser pursuant to this sentence or pursuant to the next preceding sentence
of this Section 3.6 being called, collectively, the "SEC DOCUMENTS"). Since
January 1, 2001, the Company has timely made all filings required to be made by
it under the Exchange Act, the Securities Act and the securities laws of any
state, and any rules and regulations promulgated thereunder. The SEC Documents
complied or will comply in all material respects with the requirements of the
Exchange Act or the Securities Act, as applicable, and none of the SEC Documents
contained or will contain any untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading, as of their respective filing dates,
except to the extent corrected by a subsequently filed SEC Document filed prior
to the date hereof. The Company is eligible to use a registration statement on
Form S-3 with respect to the registration of Registrable Securities (as such
term is defined in the Registration Rights Agreement) pursuant to the
Registration Rights Agreement.

         3.7 Consents. All permits, consents, approvals, orders, authorizations
of, or declarations to or filings with any federal, state, local or foreign
court, governmental or regulatory authority, or other person (including third
party consents) required on the part of the Company in connection with the
execution, delivery or performance of this Agreement and the Registration Rights
Agreement and the consummation of the transactions contemplated herein
(including, without limitation, the issuance of the Shares) and therein have
been obtained or will be obtained prior to the Closing Date, and will be
effective as of the Closing Date.

         3.8 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Shares) will not (x) conflict with or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to a loss of a material benefit under (i) any provision of the Certificate of
Incorporation or bylaws of the Company or (ii) any agreement or instrument,
permit, franchise, license, judgment, order, statute, law, ordinance, rule or
regulations, applicable to the Company or its respective properties or assets or
(y) result in the creation of any lien, security interest, charge or encumbrance
upon the Company's assets, properties, or outstanding capital stock.

         3.9 Brokers or Finders. Except for UBS Warburg LLC ("UBS") and Pacific
Growth Equities, Inc. ("PGE"), the Company has not dealt with any broker or
finder in connection with the transactions contemplated by this Agreement, and,
except for certain fees and expenses payable by the Company to UBS and PGE, the
Company has not incurred, and shall not incur, directly or indirectly, any
liability for any brokerage or finders' fees or agents commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.

         3.10 Nasdaq National Market. The Common Stock is listed on The Nasdaq
National Market, and there are no proceedings to revoke or suspend such listing.
The Common Stock is registered pursuant to Section 12(b) of the Exchange Act.
The Company has taken no action designed to, or which to its knowledge is likely
to have the effect of, terminating the registration of the Common Stock under
the Exchange Act or delisting the Common Stock from The Nasdaq National Market.
The Company has not

received any notification that, and has no knowledge that, the SEC or the NASD
is contemplating terminating such listing or registration. The issuance of the
Shares does not require stockholder approval, including, without limitation, as
may be required pursuant to the Nasdaq Marketplace Rules.

         3.11 Absence of Litigation. There is no action, suit or proceeding or,
to the Company's knowledge, any investigation, pending, or to the Company's
knowledge, threatened by or before any governmental body against the Company and
in which an unfavorable outcome, ruling or finding in any said matter, or for
all matters taken as a whole, might have a Material Adverse Effect. The
foregoing includes, without limitation, any such action, suit, proceeding or
investigation that questions this Agreement or the Registration Rights Agreement
or the right of the Company to execute, deliver and perform under same.

         3.12 Fiduciary Duties. The Company represents and warrants that, to the
best of its knowledge, none of its directors or officers is or has been the
subject of, or a defendant in: (i) an enforcement action or prosecution (or
settlement in lieu thereof) brought by a governmental authority relating to a
violation of securities, fiduciary or criminal laws, or (ii) a civil action (or
settlement in lieu thereof) brought by stockholders or investors for violation
of duties owed to the stockholders or investors.

         3.13 Title to Property and Assets. The Company owns its property and
assets free and clear of all mortgages, liens, loans, claims, charges and
encumbrances, except such encumbrances and liens that arise in the ordinary
course of business and do not materially impair the Company's ownership or use
of such property or assets. With respect to property and assets it leases, the
Company is in material compliance with such leases and, to the best of its
knowledge, holds a valid leasehold interest free of any liens, charges, claims
or encumbrances, except to extent such would not have a Material Adverse Effect.

         3.14 Intellectual Property. Seller is the sole and exclusive owner of,
or has the right to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, trade secrets,
information, licenses, proprietary rights and processes used by the Company
which are material to the Company to conduct its business as presently
conducted. The Company has not received written notice that, and has no
knowledge that, its use and enjoyment of the intellectual property described in
this Section 3.14 in connection with the conduct by the Company of its business
as currently conducted conflicts with or infringes on the rights of others in a
manner that would have a Material Adverse Effect. The Company's intellectual
property rights as described in this Section 3.14 have been duly registered
(where applicable) with the appropriate state, federal and foreign
jurisdictions.

         3.15 Environmental Matters. Except as set forth in the SEC Documents,
to its knowledge, the Company is not in violation of any applicable statute, law
or regulation relating to the environment or occupational health and safety,
which violation could reasonably be expected to result in a Material Adverse
Effect, and to the best of its knowledge, no expenditures are required in order
to comply with any such existing statute, law or regulation, which expenditures
could reasonably be expected to result in a Material Adverse Effect.

         3.16 Employees. To the Company's knowledge, no strike, labor dispute or
union organizing activities are pending or threatened against the Company by its
employees. No employees belong to a union or collective bargaining unit. The
Company does not have any workers' compensation liabilities.

         3.17 Tax Matters. The Company has filed all tax returns and reports as
required by federal, state, local, and foreign law and has paid all taxes shown
thereon that have become due and payable. Such returns and reports were
materially accurate and complete when filed and reflect all taxes and other
assessments due thereunder to be paid by the Company, except those contested by
it in good faith. The provision for taxes of the Company included in the
provision for accrued liabilities in the Company's

financial statements is adequate for taxes due or accrued as of the date
thereof. The Company has never had any material tax deficiency proposed or
assessed against it. Since 1995, none of the Company's federal income tax
returns have been audited by governmental authorities.

         3.18 Compliance with Laws. The business and operations of the Company
have been conducted in accordance with all applicable laws, rules and
regulations of all governmental agencies, authorities and instrumentalities
(including, without limitation, under the Employee Retirement Income Security
Act of 1974, as amended, laws and regulations administered by the Food and Drug
Administration, and all laws relating to the employment of labor), except for
such violations which would not, individually or in the aggregate, have a
Material Adverse Effect.

         3.19 Insurance. The Company maintains insurance of the type and in the
amount reasonably adequate for its business, including, but not limited to,
insurance covering all real and personal property owned or leased by the Company
against theft, damage, destruction, acts vandalism, and all other risks
customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.

         3.20 Investment Company Act. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"), and the Company is not directly or indirectly
controlled by or acting on behalf of any person that is an "investment company"
within the meaning of the Investment Company Act.

         3.21 Compliance With Securities Laws. Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Section 4 hereof,
the offer and sale by the Company of the Shares is exempt from (i) the
registration and prospectus delivery requirements of the Securities Act and (ii)
the registration and qualification provisions of all applicable state securities
and "blue sky" laws. Other than pursuant to an effective registration statement
under the Securities Act, the Company has not issued, offered or sold any shares
of Common Stock (including for this purpose any securities of the same or a
similar class as the Common Stock or any securities convertible into or
exchangeable or exercisable for the Common Stock or any such other securities)
within the six (6) month period preceding the date hereof or taken any other
action, or failed to take any action, that, in any such case, would (i)
eliminate the availability of the exemption from registration under Regulation D
under the Securities Act in connection with the offer and sale of the Shares as
contemplated hereby or (ii) cause the offering of the Shares pursuant to this
Agreement to be integrated with prior offerings by the Company for purposes of
the Securities Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of the NASD, as applicable.
The Company shall not directly or indirectly take, and shall not permit any of
its directors, officers or Affiliates directly or indirectly to take, any action
(including, without limitation, any offering or sale to any person or entity of
the Shares or any Common Stock) that will make unavailable the exemption from
registration under the Securities Act being relied upon by the Company for the
offer and sale to the Purchasers of the Shares as contemplated by this
Agreement, including, without limitation, the filing of a registration statement
under the Securities Act. No form of general solicitation or advertising within
the meaning of Rule 502(c) under the Securities Act has been used or authorized
by the Company or any of its officers, directors or Affiliates in connection
with the offer or sale of the Shares as contemplated by this Agreement or any
other agreement to which the Company is a party.

         3.22 Registration Rights. There are no persons with registration or
other similar rights to have any securities registered to the Registration
Statement or otherwise registered by the Company under the Securities Act which
have not been satisfied.

         3.24 Related Party Transactions. Except as set forth in the SEC
Documents, neither the Company nor any of its officers, directors or Affiliates
nor any family member of any officer, director or Affiliate of the Company has
borrowed any moneys from or has outstanding any indebtedness or other similar
obligations to the Company. Neither the Company nor any of its officers,
directors or Affiliates nor any family member of any officer, director or
Affiliate of the Company (i) owns any direct or indirect interest constituting
more than a 1% equity (or similar profit participation) interest in, or controls
or is a director, officer, partner, member or employee of, or consultant or
lender to or borrower from, or has the right to participate in the profits of,
any person or entity which is a participant in any transaction to which the
Company is a party or (ii) is a party to any contract, agreement, commitment or
other arrangement with the Company.

         3.25 Contracts. All contracts and agreements filed or required to be
filed as exhibits to the SEC Documents filed prior to the date hereof, except
such contracts and agreements that have expired by their own terms
(collectively, "CONTRACTS") are in full force and effect and constitute legal,
valid and binding obligations of the Company and, to the best knowledge of the
Company, the other parties thereto; the Company and, to the best knowledge of
the Company, each other party thereto, have performed in all material respects
all obligations required to be performed by them under the Contracts, and no
material violation or default exists in respect thereof, nor any event that with
notice or lapse of time, or both, would constitute a default thereof, on the
part of the Company or, to the best knowledge of the Company, any other party
thereto; none of the Contracts is currently being renegotiated; and the
validity, effectiveness and continuation of all Contracts will not be materially
adversely affected by the transactions contemplated by this Agreement.

         3.26 Disclosure. The Agreement and the SEC Documents does not contain
any untrue statement of a material fact nor omit to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.

4. Representations and Warranties of the Purchasers. Each Purchaser severally
for itself, and not jointly with the other Purchasers, represents and warrants
to the Company as follows:

         4.1 Authorization. Such Purchaser has all requisite power under its
constituent documents to enter into each of this Agreement and the Registration
Rights Agreement and to carry out and perform its obligations under the terms of
this Agreement and the Registration Rights Agreement. All action on the part of
such Purchaser and, if applicable, its officers, directors, stockholders,
managers, members and equity holders necessary for the authorization, execution,
delivery and performance of this Agreement and the Registration Rights Agreement
and the consummation of the transactions contemplated herein and therein has
been taken. When executed and delivered, each of this Agreement and the
Registration Rights Agreement will constitute the legal, valid and binding
obligation of such Purchaser, enforceable against such Purchaser in accordance
with its terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally and by
general equitable principles.

         4.2 Purchase Entirely for Own Account. Such Purchaser is acquiring the
Shares being purchased by it hereunder for investment, for its own account, and
not for resale or with a view to distribution thereof in violation of the
Securities Act.

         4.3 Investor Status; Etc. Such Purchaser certifies and represents to
the Company that at the time such Purchaser acquires any of the Shares, such
Purchaser will be an "Accredited Investor" as defined in Rule 501 of Regulation
D promulgated under the Securities Act and was not organized for the purpose of
acquiring the Shares. Such Purchaser's financial condition is such that it is
able to bear the risk of holding the Shares for an indefinite period of time and
the risk of loss of its entire investment.

Such Purchaser has been afforded the opportunity to ask questions of and receive
answers from the management of the Company concerning this investment and has
sufficient knowledge and experience in investing in companies similar to the
Company in terms of the Company's stage of development so as to be able to
evaluate the risks and merits of its investment in the Company.

         4.4 Shares Not Registered. Such Purchaser understands that the Shares
have not been registered under the Securities Act, by reason of their issuance
by the Company in a transaction exempt from the registration requirements of the
Securities Act, and that the Shares must continue to be held by such Purchaser
unless a subsequent disposition thereof is registered under the Securities Act
or is exempt from such registration. The Purchaser understands that the
exemptions from registration afforded by Rule 144 (the provisions of which are
known to it) promulgated under the Securities Act depend on the satisfaction of
various conditions, and that, if applicable, Rule 144 may afford the basis for
sales only in limited amounts.

         4.5 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement by such Purchaser and the consummation by it of
the transactions contemplated hereby and thereby will not conflict with or
result in any violation of or default by such Purchaser (with or without notice
or lapse of time, or both) under (i) any provision of the organizational
documents of such Purchaser or (ii) any judgment, order, statute, law,
ordinance, rule or regulations, applicable to such Purchaser or its respective
properties or assets.

         4.6 Brokers. Such Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.

         4.7 Consents. All consents, approvals, orders and authorizations
required on the part of such Purchaser in connection with the execution,
delivery or performance of this Agreement and the consummation of the
transactions contemplated herein have been obtained and are effective as of the
Closing Date.

5.       Conditions Precedent.

         5.1 Conditions to the Obligation of the Purchasers to Consummate the
Closing. The obligation of each Purchaser to consummate the Closing and to
purchase and pay for the Shares being purchased by it pursuant to this Agreement
is subject to the satisfaction of the following conditions precedent (or waiver
by such Purchaser):

                  (a) The representations and warranties contained herein of the
Company shall be true and correct on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date (it being
understood and agreed by each Purchaser that, in the case of any representation
and warranty of the Company contained herein which is not hereinabove qualified
by application thereto of a materiality standard, such representation and
warranty need be true and correct only in all material respects in order to
satisfy as to such representation or warranty the condition precedent set forth
in the foregoing provisions of this Section 5.1(a)).

                  (b) Prior to the Closing Date, no Material Adverse Event shall
have occurred and the Company shall have performed all covenants, agreements,
obligations and conditions herein required to be performed or observed by the
Company on or prior to the Closing Date.

                  (c) No suit, action, or other proceeding challenging this
Agreement or the transactions contemplated hereby, or seeking to prohibit,
alter, prevent or materially delay the Closing,

shall have been instituted before any court, arbitrator or governmental body,
agency or official and shall be pending.

                  (d) The purchase of and payment for the Shares by such
Purchasers shall not be prohibited by any law or governmental order or
regulation. All necessary consents, approvals, licenses, permits, orders and
authorizations of, or registrations, declarations and filings with, any
governmental or administrative agency or of any other person with respect to any
of the transactions contemplated hereby (including, without limitation, the
issuance of the Shares) shall have been duly obtained or made and shall be in
full force and effect.

                  (e) The Company shall have complied with all applicable
requirements of federal and state securities or "blue sky" laws with respect to
the issuance of the Shares, and each Purchaser, at such Purchaser's request,
shall have been provided reasonable evidence thereof.

                  (f) The Shares shall have been approved for listing on The
Nasdaq National Market, and each Purchaser, at such Purchaser's request, shall
have been provided reasonable evidence thereof.

                  (g) The Registration Rights Agreement shall have been executed
and delivered by the Company.

                  (h) A certificate shall have been delivered by the Company,
signed by its President or Chief Executive Officer, to the effect that: (i) the
representations and warranties of the Company contained in this Agreement are
true and correct in all material respects on and as of the Closing Date, as
though newly made on and as of that date (except for representations and
warranties which speak as of the date of the Agreement or as of another specific
date or period covered thereby) and (ii) the Company has performed or complied
with, in all material respects, all of its covenants contained in this Agreement
and required to be performed or complied with on or before Closing Date.

                  (i) The Company shall have delivered to each Purchaser an
opinion of counsel for the Company, dated the Closing Date, in substantially the
form of Exhibit B attached hereto.

                  (j) A single stock certificate shall have been delivered by
the Company, registered in the name of such Purchaser or nominee as designated
by the Purchaser in writing, representing the number of shares of Common Stock
purchased by such Purchaser, free of all restrictive and other legends (except
as provided in Section 6.2 hereof and otherwise in the form of good delivery),
against payment of the purchase price therefor by wire transfer of immediately
available funds to such account or accounts as the Company shall designate in
writing.

                  (k) All instruments and corporate proceedings in connection
with the transactions contemplated by this Agreement to be consummated at the
Closing shall be satisfactory in form and substance to such Purchaser, and such
Purchaser shall have received copies (executed or certified, as may be
appropriate) of all documents which such Purchaser may have reasonably requested
in connection with such transactions.

                  (l) Purchasers shall have committed, pursuant to the terms
hereof, to purchase an aggregate of at least four million (4,000,000) Shares.

         5.2 Conditions to the Obligation of the Company to Consummate the
Closing. The obligation of the Company to consummate the Closing and to issue
and sell to each Purchaser the Shares to be purchased by it at the Closing is
subject to the satisfaction of the following conditions precedent (or waiver by
the Company):

                  (a) The representations and warranties contained herein of
such Purchaser shall be true and correct on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date (it being
understood and agreed by the Company that, in the case of any representation and
warranty of each Purchaser contained herein which is not hereinabove qualified
by application thereto of a materiality standard, such representation and
warranty need be true and correct only in all material respects in order to
satisfy as to such representation or warranty the condition precedent set forth
in the foregoing provisions of this Section 5.2(a)).

                  (b) The Registration Rights Agreement shall have been executed
and delivered by each Purchaser.

                  (c) Such Purchaser shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the
Closing Date.

                  (d) No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the Closing, shall have been instituted before any court,
arbitrator or governmental body, agency or official and shall be pending.

                  (e) The sale of the Shares by the Company shall not be
prohibited by any law or governmental order or regulation. All necessary
consents, approvals, licenses, permits, orders and authorizations of, or
registrations, declarations and filings with, any governmental or administrative
agency or of any other person with respect to any of the transactions
contemplated hereby shall have been duly obtained or made and shall be in full
force and effect.

                  (f) Such Purchaser shall have executed and delivered to the
Company a Investor Questionnaire, in substantially the form attached hereto as
Exhibit C, pursuant to which each such Purchaser shall provide information
necessary to confirm each such Purchaser's status as an "accredited investor"
(as such term is defined in Rule 501 promulgated under the Securities Act).

                  (g) The Company shall have received executed agreements from
each of the Purchasers to purchase, in accordance with this Agreement, the
number of shares of Common Stock set forth on Exhibit A opposite its name under
the heading "Number of Shares to be Purchased."

                  (h) All instruments and corporate proceedings in connection
with the transactions contemplated by this Agreement to be consummated at the
Closing shall be satisfactory in form and substance to the Company, and the
Company shall have received counterpart originals, or certified or other copies
of all documents, including without limitation records of corporate or other
proceedings, which it may have reasonably requested in connection therewith.

                  (i) Purchasers shall have committed, pursuant to the terms
hereof, to purchase an aggregate of at least four million (4,000,000) Shares.

6.       Transfer; Legends.

         6.1 Securities Law Transfer Restrictions. No Purchaser shall sell,
assign, pledge, transfer or otherwise dispose or encumber any of the Shares
being purchased by it hereunder, except: (i) pursuant to an effective
registration statement under the Securities Act or (ii) pursuant to an available
exemption from registration under the Securities Act and applicable state
securities laws and, if reasonably requested by the Company, upon delivery by
such Purchaser of an opinion of counsel reasonably satisfactory to the Company
to the effect that the proposed transfer is exempt from registration under the
Securities Act and applicable state securities laws. Any transfer or purported
transfer of the Shares in violation of this

Section 6.1 shall be voidable by the Company; provided, however, that no opinion
will be required in connection with (i) a public sale or transfer of Shares
pursuant to an effective registration statement in connection with which
Purchaser represents in writing to the Company that such Shares have been or are
being sold pursuant to such registration statement; (ii) a public sale of Shares
pursuant to Rule 144 under the Securities Act if Purchaser has delivered to the
Company a customary and accurate Rule 144 broker's and seller's representation
letter; or (iii) a sale of shares pursuant to Rule 144(k) under the Securities
Act if Purchaser has delivered to the Company a customary and accurate Rule 144
seller's representation letter. The Company shall not register any transfer of
the Shares in violation of this Section 6.1. The Company may, and may instruct
any transfer agent for the Company, to place such stop transfer orders as may be
required on the transfer books of the Company in order to ensure compliance with
the provisions of this Section 6.1.

         6.2 Legends. Each certificate requesting any of the Shares shall be
endorsed with a legend in substantially the form set forth below, and each
Purchaser covenants that, except to the extent such restrictions are waived by
the Company, it shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer described in
this Agreement and the legends endorsed on such certificate:

                           THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
                  BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
                  (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
                  BE OFFERED, SOLD, ASSIGNED, PLEDGED TRANSFERRED OR OTHERWISE
                  DISPOSED OF (I) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
                  STATEMENT UNDER THE ACT AND SUCH LAWS OR (II) PURSUANT TO AN
                  AVAILABLE EXEMPTION FROM REGISTRATION UNDER SAID ACT, AND TO
                  THE EXTENT REQUIRED BY SECTION 6.1 OF THE STOCK PURCHASE
                  AGREEMENT PURSUANT TO WHICH THE SHARES REPRESENTED HEREBY WERE
                  ACQUIRED, UPON DELIVERY OF AN OPINION OF COUNSEL REASONABLY
                  SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS
                  EXEMPT FROM THE ACT AND SUCH LAWS.

         6.3 Removal of Legends. Any legend endorsed on a certificate evidencing
the Shares shall be removed, and the Company shall issue a certificate without
such legend to the holder of such Shares, if such Shares are being sold pursuant
to an effective registration statement under the Securities Act or pursuant to
Rule 144 promulgated thereunder and the purchaser thereof may immediately resell
such Shares without restriction and without registration; provided, however,
that in the case of a sale pursuant to Rule 144, such holder of Shares shall
provide such information as is reasonably requested by the Company to ensure
that such Shares may be sold in reliance on Rule 144.

7. Termination; Liabilities Consequent Thereon. This Agreement may be terminated
and the transactions contemplated hereunder abandoned at any time prior to the
Closing only as follows:

                  (a) with respect to a Purchaser, by such Purchaser, upon
notice to the Company if the conditions set forth in Section 5.1 shall not have
been satisfied on or prior to February __, 2002; or

                  (b) with respect to a Purchaser, by the Company, upon notice
to such Purchaser if the conditions set forth in Section 5.2 to be satisfied by
such Purchaser shall not have been satisfied on or prior to February __, 2002;
or

                  (c) at any time by mutual agreement of the Company and not
less than five (5) Purchasers who represent at least fifty percent (50%) of the
Shares being sold hereunder; or

                  (d) with respect to a Purchaser, by such Purchaser, if there
has been any breach of any representation or warranty or any material breach of
any covenant of the Company contained herein and the same has not been cured
within 15 days after notice thereof, (it being understood and agreed by each
Purchaser that, in the case of any representation or warranty of the Company
contained herein which is not hereinabove qualified by application thereto of a
materiality standard, such representation or warranty will be deemed to have
been breached for purposes of this Section 7.1(d) only if such representation or
warranty was not true and correct in all material respects at the time such
representation or warranty was made by the Company); or

                  (e) by the Company with respect to a Purchaser, if there has
been any breach of any representation, warranty or any material breach of any
covenant of such Purchaser contained herein and the same has not been cured
within 15 days after notice thereof (it being understood and agreed by the
Company that, in the case of any representation and warranty of the Purchaser
contained herein which is not hereinabove qualified by application thereto of a
materiality standard, such representation or warranty will be deemed to have
been breached for purposes of this Section 7.1(e) only if such representation or
warranty was not true and correct in all material respects at the time such
representation or warranty was made by such Purchaser).

                  Any termination pursuant to this Section 7 shall be without
liability on the part of any party, unless such termination is the result of a
material breach of this Agreement by a party to this Agreement in which case
such breaching party shall remain liable for such breach notwithstanding any
termination of this Agreement.

8.       Miscellaneous Provisions.

         8.1 Use of Proceeds. The Company shall expend the net proceeds from the
sale of the Shares solely for general corporate and working capital purposes.

         8.2 Filings. The Company shall make all necessary filings with the SEC
and "blue sky" filings required to be made by the Company in connection with the
sale of the Shares to the Purchasers as required by all applicable laws, and
shall provide a copy thereof to the Purchasers promptly after such filing.

         8.3 Public Statements or Releases. Each of the parties to this
Agreement agrees that it shall not make, issue, or release any announcement,
whether to the public generally, or to any of its suppliers or customers, with
respect to this Agreement or the transactions provided for herein, or make any
statement or acknowledgment of the existence of, or reveal the status of, this
Agreement or the transactions provided for herein, without the prior consent of
the other parties, which shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, nothing in this Section 8.3 shall prevent any of
the parties hereto from making such public announcements or filings as it may
consider necessary in order to satisfy its legal obligations, or from releasing
a public statement mutually acceptable to the parties hereto upon the completion
of the offering contemplated hereby.

         8.4 Further Assurances. The parties agree to cooperate fully to execute
such further instruments, documents and agreements and to give such further
written assurances, as may be reasonably requested by any party to better
evidence and reflect the transactions described herein and contemplated hereby,
and to carry into effect the intents and purposes of this Agreement.

         8.5 Notification of Effectiveness of Registration Statement. The
Company covenants that it will provide written notice to each Purchaser (which
notice may be in electronic form) that the Company's registration statement on
Form S-3 registering the Shares sold hereunder to the Purchasers has been
declared effective by the SEC, which notice shall be given promptly, but in no
event more than two (2) days after the Company has received notice of such
effectiveness from the SEC.

         8.6 Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have at
law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.

         8.7 Pronouns. All pronouns or any variation thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require.

         8.8      Notices.

                  (a) Any notices, reports or other correspondence (hereinafter
collectively referred to as "CORRESPONDENCE") required or permitted to be given
hereunder shall be sent by postage prepaid first class mail, courier or
facsimile or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder. The date of giving any notice shall
be the date of its actual receipt.

                  (b) All correspondence to the Company shall be addressed as
follows:

                           La Jolla Pharmaceutical Company
                           6455 Nancy Ridge Drive
                           San Diego, CA 92121
                           Attention:  Steven B. Engle
                           Facsimile:  (858) 452-6893

                           with a copy to:

                           Gibson, Dunn & Crutcher LLP
                           4 Park Plaza, Suite 1700
                           Irvine, California 92614
                           Attention:  Leonard J. McGill
                           Facsimile:  (949) 451-4220

                   (c) All correspondence to any Purchaser shall be sent to such
Purchaser at the address set forth in Exhibit A, with a copy to:

                           Kelley Drye & Warren LLP
                           101 Park Avenue
                           New York, NY  10178
                           Attention:  Salvatore J. Vitiello
                           Facsimile:  (212) 808-7897

                  (d) Any entity may change the address to which correspondence
to it is to be addressed by notification as provided for herein.

         8.9 Captions. The captions and paragraph headings of this Agreement are
solely for the convenience of reference and shall not affect its interpretation.

         8.10 Severability. Should any part or provision of this Agreement be
held unenforceable or in conflict with the applicable laws or regulations of any
jurisdiction, the invalid or unenforceable part or provisions shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties
hereto.

         8.11     Governing Law; Injunctive Relief.

                  (a) This Agreement shall be governed by and construed in
accordance with the internal and substantive laws of the State of California and
without regard to any conflicts of laws concepts that would apply the
substantive law of some other jurisdiction.

                  (b) Each of the parties hereto acknowledges and agrees that
damages will not be an adequate remedy for any material breach or violation of
this Agreement if such material breach or violation would cause immediate and
irreparable harm (an "IRREPARABLE BREACH"). Accordingly, in the event of a
threatened or ongoing Irreparable Breach, each party hereto shall be entitled to
seek, in any state or federal court in the State of California, equitable relief
of a kind appropriate in light of the nature of the ongoing or threatened
Irreparable Breach, which relief may include, without limitation, specific
performance or injunctive relief; provided, however, that if the party bringing
such action is unsuccessful in obtaining the relief sought, the moving party
shall pay the non-moving party's costs, including actual attorney's fees,
incurred in connection with defending such action. Such remedies shall not be
the parties' exclusive remedies, but shall be in addition to all other remedies
provided in this Agreement.

         8.12 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.

         8.13 Expenses. Each party will bear its own costs and expenses in
connection with this Agreement; provided, however, that the Company shall pay
all costs and expenses of KD&W, as counsel to the Purchasers, incurred through
the Closing Date, up to an aggregate of $35,000, plus reasonable out-of-pocket
expenses, which amount shall be payable on the Closing Date and further provided
that if this Agreement is terminated pursuant to Section 7 prior to the Closing
Date, then the costs and expenses of KD&W shall be payable by the Company no
later than ten (10) days after the date of termination.

         8.14 Assignment. The rights and obligations of the parties hereto shall
inure to the benefit of and shall be binding upon the authorized successors and
permitted assigns of each party. No Purchaser may assign its rights or
obligations under this Agreement or designate another person (i) to perform all
or part of its obligations under this Agreement or (ii) to have all or part of
its rights and benefits under this Agreement, in each case without the prior
written consent of the Company, which consent will not be unreasonably withheld.
In the event of any assignment in accordance with the terms of this Agreement,
the assignee shall specifically assume and be bound by the provisions of the
Agreement by executing and agreeing to an assumption agreement reasonably
acceptable to the other party.

         8.15 Survival. The respective representations and warranties given by
the parties hereto, and the other covenants and agreements contained herein,
shall survive the Closing Date and the consummation of the transactions
contemplated herein for a period of two years, without regard to any
investigation made by any party.

         8.16 Entire Agreement. This Agreement along with the schedules and
exhibits attached hereto and incorporated herewith constitute the entire
agreement between the parties hereto respecting the subject matter hereof and
supersedes all prior agreements, negotiations, understandings, representations
and statements respecting the subject matter hereof, whether written or oral. No
modification, alteration, waiver or change in any of the terms of this Agreement
shall be valid or binding upon the parties hereto unless made in writing and
duly executed by the Company and (a) prior to Closing, not less than five (5)
Purchasers who represent at least fifty percent (50%) of the Shares being sold
hereunder or (b) following Closing, the Majority Purchasers; provided, however,
that, in each case, no such amendment shall increase the obligations of any
Purchaser without such Purchaser's written consent.

         8.17 Confidential Information. Each of the Company and each Purchaser
agrees to keep confidential, and not to disclose to or use for the benefit of
any third party, the terms of this Agreement or any other information which at
any time is communicated by the other party as being confidential, without the
prior written approval of the other party; provided, however, that this
provision shall not apply to information which, at the time of disclosure, is
already part of the public domain (except by breach of this Agreement) and
information which is required to be disclosed by law (including, without
limitation, pursuant to Item 601(b)(10) of Regulation S-K under the Securities
Act and the Exchange Act).

         8.18 Indemnification Regarding Brokers' Fees. The Company shall
indemnify and hold harmless each Purchaser against, and from any liability, cost
or expense, resulting from the Company's fee agreement with UBS, or owing to
PGE, in connection with this Agreement or the transactions contemplated hereby.

         8.19 Counterparts. This Agreement may be executed simultaneously 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.



[The remainder of this page has been intentionally left blank; signature page
follows.]

         IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement as of the date and year first above written.

                                             LA JOLLA PHARMACEUTICAL COMPANY



                                             By:
                                                      Steven B. Engle
                                                      Chief Executive Officer

         THE PURCHASER'S SIGNATURE TO THE INVESTOR QUESTIONNAIRE DATED EVEN DATE
HEREWITH SHALL CONSTITUTE THE PURCHASER'S SIGNATURE TO THIS STOCK PURCHASE
AGREEMENT.

EX-4.2

                                                                     EXHIBIT 4.2

                      FORM OF REGISTRATION RIGHTS AGREEMENT

         This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of
January ____, 2002 by and among (i) La Jolla Pharmaceutical Company, a Delaware
corporation (the "COMPANY"), (ii) each person listed on Exhibit A attached
hereto (collectively, the "INITIAL INVESTORS" and each individually, an "INITIAL
INVESTOR"), and (iii) each person or entity that subsequently becomes a party to
this Agreement pursuant to, and in accordance with, the provisions of Section 12
hereof (each an "INVESTOR PERMITTED Transferee" and collectively, the "INVESTOR
PERMITTED TRANSFEREES").

         WHEREAS, the Company has agreed to issue and sell to the Initial
Investors, and the Initial Investors have agreed to purchase from the Company,
an aggregate of 7,000,000 shares (the "PURCHASED SHARES") of the Company's
common stock, $0.01 par value per share (the "COMMON STOCK"), all upon the terms
and conditions set forth in that certain Stock Purchase Agreement, dated of even
date herewith, between the Company and the Initial Investors (the "STOCK
PURCHASE AGREEMENT"); and

         WHEREAS, the terms of the Stock Purchase Agreement provide that it
shall be a condition precedent to the closing of the transactions thereunder,
for the Company and the Initial Investors to execute and deliver this Agreement.

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

         1. Definitions. The following terms shall have the meanings provided
therefor below or elsewhere in this Agreement as described below:

                  "Board" shall mean the board of directors of the Company.

                  "Closing" shall have the meaning ascribed to such term in the
Stock Purchase Agreement.

                  "Closing Date" shall have the meaning ascribed to such term in
the Stock Purchase Agreement.

                  "Effectiveness Deadline" shall be one hundred five (105) days
after the Closing Date.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and all of the rules and regulations promulgated thereunder.

                  "Filing Date Deadline" shall be fifteen (15) business days
after the Closing Date.

                  "Investors" shall mean, collectively, the Initial Investors
and the Investor Permitted Transferees; provided, however, that the term
"Investors" shall not include any of the Initial Investors or any of the
Investor Permitted Transferees that ceases to own or hold any Purchased Shares.

                  "Majority Holders" shall mean, at the relevant time of
reference thereto, those Investors holding and/or having the right to acquire,
as the case may be, more than fifty percent (50%) of the Registrable Shares held
by all of the Investors.

                  "NASD" shall mean the National Association of Securities
Dealers, Inc.

                  "Qualifying Holder" shall have the meaning ascribed thereto in
Section 12 hereof.

                  "Registrable Shares" shall mean (i) the Purchased Shares and
(ii) any Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security that is issued as) a
dividend or other distribution (including a stock split or reverse stock split)
with respect to, or in exchange for, or in replacement of, the shares referenced
in (i) above after the Closing and prior to the date upon which the Registration
Statement is declared effective by the SEC; provided, however, such term shall
not, after the Mandatory Registration Termination Date, include any of the
Purchased Shares that become or have become eligible for resale pursuant to
subsection (k) of Rule 144.

                  "Rule 144" shall mean Rule 144 promulgated under the
Securities Act and any successor or substitute rule, law or provision.

                  "SEC" shall mean the Securities and Exchange Commission.

                  "Securities Act" shall mean the Securities Act of 1933, as
amended, and all of the rules and regulations promulgated thereunder.

         2. Effectiveness; Termination. This Agreement shall become effective
and legally binding only if the Closing occurs. This Agreement shall terminate
and be of no further force or effect, automatically and without any action being
required of any party hereto, upon the termination of the Stock Purchase
Agreement pursuant to Section 7 thereof. Nothing contained herein or in any
agreement or document relating to this transaction, and no action taken by any
Investor, shall be deemed to constitute the Investors as, or to create any
presumption that the Investors are in any way acting in concert or as, a group
with respect to the obligations or transaction hereunder. Each Investor shall be
entitled to independently protect and enforce its rights hereunder.

         3.       Mandatory Registration.

                  (a) Within fifteen (15) business days after the Closing Date,
the Company shall prepare and file with the SEC a registration statement on Form
S-3 for the purpose of registering under the Securities Act all of the
Registrable Shares for resale by, and for the account of, the Investors as
selling stockholders thereunder (the "REGISTRATION STATEMENT"). The Registration
Statement shall permit the Investors to offer and sell, on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, any or all of
the Registrable Shares. The Company shall be required to keep the Registration
Statement effective until such date that is the earlier of (i) the date when all
of the Registrable Shares registered thereunder shall have been sold or (ii) the
date on which all of the Registrable Shares may be immediately sold without
restriction (including without any limitation as to volume or manner of sale by
each Investor) and without registration under the Securities Act (the "MANDATORY
REGISTRATION TERMINATION DATE"). Thereafter, the Company shall be entitled to
withdraw the Registration Statement and the Investors shall have no further
right to offer or sell any of the Registrable Shares pursuant to the
Registration Statement (or any prospectus relating thereto).

                  (b) Unless otherwise agreed to by the Company, the offer and
sale of the Registrable Shares pursuant to the Registration Statement shall not
be underwritten.

                  (c) The Company represents and warrants that, as of the date
of this Agreement, it meets the requirements for the use of Form S-3 for
registration of the resale by the Investors of the Registrable Shares, and it
will use its commercially reasonable efforts to continue to meet such
requirements during the period in which it takes to have the Registration
Statement declared effective.

                  (d) The Company shall cause all of the Registrable Shares to
be listed on The Nasdaq National Market.

                  (e) This Section 3(e) shall apply to the Company's obligation
under Section 3(a) hereof to file the Registration Statement with the SEC and to
cause such Registration Statement to become effective. The Company and Initial
Investors agree that the Investors will suffer damages if the Registration
Statement is not filed on or prior to the Filing Date Deadline and not declared
effective by the SEC on or prior to the Effectiveness Deadline. The Company and
the Initial Investors further agree that it would not be feasible to ascertain
the extent of such damages with precision. Accordingly, if (i) the Registration
Statement is not filed on or prior to the Filing Date Deadline; (ii) the
Registration Statement is not declared effective prior to the Effectiveness
Deadline; or (iii) the Company fails to file with the SEC a request for
acceleration in accordance with Rule 12d1-2 promulgated under the Exchange Act
as promptly as practicable after the date that the Company is notified (orally
or in writing, whichever is earlier) by the Commission that a Registration
Statement will not be reviewed, or not subject to further review (each of the
events listed in (i)-(iii) above being referred to as an "EVENT"), then the
Company shall pay as liquidated damages for any such failure and not as a
penalty (the "LIQUIDATED DAMAGES") $250,000 (the "LIQUIDATED DAMAGES AMOUNT") to
the Investors for each thirty (30) day period (pro rated for any period less
than thirty (30) days) following the Event until the applicable Event has been
cured; provided, however, that if the Registration Statement is not declared
effective by the SEC within one hundred eighty (180) days after the Closing
Date, then the Liquidated Damages Amount shall increase to $500,000 for each
such subsequent thirty (30) day period (pro rated for any period less than
thirty (30) days). Each Liquidated Damages payment, if any, shall by payable to
the Investors on a pro rata basis among them based on the number of shares each
Initial Investor purchased pursuant to the Stock Purchase Agreement. In any
event, no Liquidated Damages shall accrue after the twelve (12) month
anniversary of the Closing Date. Payments to be made pursuant to this Section
3(e) shall be due and payable in immediately available funds within three days
of such payment becoming payable hereunder. The parties agree that the
Liquidated Damages represent a reasonable estimate on the part of the parties,
as of the date of this Agreement, of the amount of damages that may be incurred
by the Investors if the Registration Statement is not filed on or prior to the
Filing Date Deadline or has not been declared effective by the SEC on or prior
to the Effectiveness Deadline.

         4.       "Piggyback" Registration Rights.

                  (a) If, at any time after the Mandatory Registration
Termination Date, the Company proposes to register any of its Common Stock under
the Securities Act, whether as a result of a primary or secondary offering of
Common Stock or pursuant to registration rights granted to holders of other
securities of the Company (but excluding in all cases any registrations to be
effected on Forms S-4 or S-8 or other applicable successor forms), the Company
shall, each such time, give to the Investors holding Registrable Shares written
notice of its intent to do so. Upon the written request of any such Investor
given within 20 days after the giving of any such notice by the Company, the
Company shall use reasonable efforts to cause to be included in such
registration the Registrable Shares of such selling Investor, to the extent
requested to be registered; provided that (i) the number of Registrable Shares
proposed to be sold by such selling Investor is equal to at least twenty-five
percent (25%) of the total number of Registrable Shares then held by such
participating selling Investor, (ii) such selling Investor agrees to sell those
of its Registrable Shares to be

included in such registration in the same manner and on the same terms and
conditions as the other shares of Common Stock which the Company proposes to
register and (iii) if the registration is to include shares of Common Stock to
be sold for the account of the Company or any party exercising demand
registration rights pursuant to any other agreement with the Company, the
proposed managing underwriter does not advise the Company that in its opinion
the inclusion of such selling Investor's Registrable Shares (without any
reduction in the number of shares to be sold for the account of the Company or
such party exercising demand registration rights) is likely to affect materially
and adversely the success of the offering or the price that would be received
for any shares of Common Stock offered, in which case the rights of such selling
Investor shall be as provided in Section 4(b) hereof.

                  (b) If a registration pursuant to Section 4(a) hereof involves
an underwritten offering and the managing underwriter shall advise the Company
in writing that, in its opinion, the number of shares of Common Stock requested
by the Investors to be included in such registration is likely to affect
materially and adversely the success of the offering or the price that would be
received for any shares of Common Stock offered in such offering, then,
notwithstanding anything in Section 4(a) to the contrary, the Company shall only
be required to include in such registration, to the extent of the number of
shares of Common Stock which the Company is so advised can be sold in such
offering, (i) first, the number of shares of Common Stock proposed to be
included in such registration for the account of the Company and/or any
stockholders of the Company (other than the Investors) that have exercised
demand registration rights, in accordance with the priorities, if any, then
existing among the Company and/or such stockholders of the Company with
registration rights (other than the Investors), and (ii) second, the shares of
Common Stock requested to be included in such registration by all other
stockholders of the Company who have piggyback registration rights (including,
without limitation, the Investors), pro rata among such other stockholders
(including, without limitation, the Investors) on the basis of the number of
shares of Common Stock that each of them requested to be included in such
registration.

                  (c) In connection with any offering involving an underwriting
of shares under this Section 4, the Company shall not be required under Section
4 hereof or otherwise to include the Registrable Shares of any Investor therein
unless such Investor accepts and agrees to the terms of the underwriting, which
shall be reasonable and customary, as agreed upon between the Company and the
underwriters selected by the Company.

         5. Obligations of the Company. In connection with the Company's
obligation under Section 3 and 4 hereof to file the Registration Statement with
the SEC and to use its best efforts to cause the Registration Statement to
become effective, the Company shall, as expeditiously as reasonably possible:

                  (a) Prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Shares covered by the
Registration Statement; provided, however, that before filing a registration
statement or prospectus or any amendments or supplements thereto, or comparable
statements under securities or blue sky laws of any jurisdiction, the Company
will furnish to Kelley, Drye & Warren LLP, Attn: Salvatore J. Vitiello, as
designated counsel for the Investors participating in the planned offering (the
"DESIGNATED COUNSEL"), copies of all such documents proposed to be filed
(including all exhibits thereto), which documents will be subject to the
reasonable review and reasonable comment of such counsel.

                  (b) Furnish to the selling Investors such number of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents (including, without
limitation, prospectus amendments and supplements as

are prepared by the Company in accordance with Section 5(a) above) as the
selling Investors may reasonably request in order to facilitate the disposition
of such selling Investors' Registrable Shares.

                  (c) Promptly notify the selling Investors, at any time when a
prospectus relating to the Registration Statement is required to be delivered
under the Securities Act, of the happening of any event as a result of which the
prospectus included in or relating to the Registration Statement contains an
untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading; and, thereafter, the Company will promptly
prepare (and, when completed, give notice to each selling Investor) a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Shares pursuant to the Registration Statement,
such prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading;
provided that upon such notification by the Company of the foregoing and
instructing each selling Investor to cease to offer and sell Registrable
Securities, each selling Investor will use its commercially reasonable efforts
to cease its offer and sale of Registrable Shares until the Company has notified
the selling Investors that it has prepared a supplement or amendment to such
prospectus and delivered copies of such supplement or amendment to the selling
Investors (it being understood and agreed by the Company that the foregoing
proviso shall in no way diminish or otherwise impair the Company's obligation to
promptly prepare a prospectus amendment or supplement as above provided in this
Section 5(c) and deliver copies of same as above provided in Section 5(b)
hereof).

                  (d) Use commercially reasonable efforts to register and
qualify the Registrable Shares covered by the Registration Statement under such
other securities or Blue Sky laws of such jurisdictions as shall be reasonably
appropriate in the opinion of the Company and the managing underwriters, if any,
or if reasonably requested by the Investors; provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions; and provided further that (notwithstanding anything in this
Agreement to the contrary with respect to the bearing of expenses) if any
jurisdiction in which any of such Registrable Shares shall be qualified shall
require that expenses incurred in connection with the qualification therein of
any such Registrable Shares be borne by the selling Investors, then the selling
Investors shall, to the extent required by such jurisdiction, pay their pro rata
share of such qualification expenses.

                  (e) Promptly notify (i) each selling Investor (A) any time
when a registration statement, the prospectus relating thereto or any prospectus
supplement related thereto or post-effective amendment has been filed, and with
respect to the registration statement or any post-effective amendment, when the
same has become effective, (B) of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation of
any proceedings by any person to such effect, and promptly use all commercially
reasonable efforts to obtain the release of such suspension, (C) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of any Registrable Shares for sale under the securities or blue
sky laws of any jurisdiction or the initiation of any proceeding for such
purpose, (D) when a prospectus relating to the registration is required to be
delivered under the Securities Act, or (E) of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes and untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing; and (ii)
Designated Counsel of any request by the SEC for amendments or supplements to
such registration statement or prospectus related thereto or for additional
information. If the notification relates to an event described in Section 5(c),
the Company shall in accordance with Section 5(a), promptly prepare and furnish
to each Investor, if any, selling Registrable Shares covered by such
registration statement, a reasonable

number of copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Registrable Shares, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
in the light of the circumstances under which they were made not misleading.

                  (f) Cause all such Registrable Shares registered pursuant to
this Agreement to be listed on each securities exchange on which similar
securities issued by the Company are then listed, if the listing of such
Registrable Shares is then permitted under the rules of such exchange, or if no
similar securities are then so listed, to either cause all such Registrable
Shares to be listed on a national securities exchange or to secure designation
of all such Registrable Shares as a NASDAQ "national market system security"
within the meaning of Rule 11Aa2-1 of the Exchange Act, or failing that, secure
NASDAQ Authorization for such Registrable Shares.

                  (g) Provide a transfer agent and registrar for all Registrable
Shares registered pursuant to this Agreement and a CUSIP number for all such
Registrable Shares, in each case not later than the effective date of such
registration and, at the time of the sale of the Registrable Shares pursuant to
an effective registration statement or in accordance with Section 6.3 of the
Stock Purchase Agreement, use commercially reasonable efforts to cause the
transfer agent to remove restrictive legends on the securities covered by such
registration statement.

                  (h) Promptly deliver to Designated Counsel copies of all
correspondence between the SEC and the Company, its counsel or auditors and all
memoranda relating to discussions with the SEC or its staff with respect to the
registration statement, other than those portions of any such memoranda that
contain information subject to attorney client privilege with respect to the
Company, and, upon receipt of such confidentiality agreements as the Company may
reasonably request, make reasonably available for inspection by Designated
Counsel participating in any disposition to be effected pursuant to such
registration statement, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause all of the
Company's officers, directors and employees to supply all information reasonably
requested by Designated Counsel in connection with such registration statement.

                  (i) Use commercially reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement.

                  (j) Upon written request, furnish to each selling Investor
participating in the offering, without charge, at least one (1) conformed copy
of the registration statement and any post-effective amendments thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits (including those incorporated by reference).

                  (k) Comply with all applicable rules and regulations of the
SEC, and make generally available to its security holders, as soon as reasonably
practicable after the effective date of the registration statement (and in any
event within sixteen (16) months thereafter), an earnings statement (which need
not be audited) covering the period of at least twelve (12) consecutive months
beginning with the first day of the Company's first calendar quarter after the
effective date of the registration statement, which earnings shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

         6. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement
(including, without limitation, to maintain the accuracy of any information
previously furnished by Investors for use in the Registration Statement) that
the selling Investors shall furnish to the Company such information regarding
them and the securities held by

them as the Company shall reasonably request and as shall be required by
applicable securities laws in order to effect any registration by the Company
pursuant to this Agreement.

         7. Expenses of Registration. All of the expenses incurred by the
Company in connection with the registration of the Registrable Shares pursuant
to this Agreement (excluding underwriting, brokerage and other selling
commissions and discounts), including without limitation all registration and
qualification and filing fees, printing, and fees and disbursements of its
counsel and, to the extent provided in Section 8.13 of the Stock Purchase
Agreement, one counsel to the Investors, shall be borne by the Company, whether
or not such Registration Statement becomes effective or remains effective for
the period contemplated hereby.

         8. Delay of Registration. No Investor shall take any action to
restrain, enjoin or otherwise delay any registration as the result of any
controversy which might arise with respect to the interpretation or
implementation of this Agreement.

         9.       Indemnification.

                  (a) To the extent permitted by law, the Company will indemnify
and hold harmless each selling Investor, its directors, officers, employees,
fiduciaries, members, managers, or general or limited partners (and the
directors, officers, employees and stockholders thereof), any broker/dealer
acting on behalf of any selling Investor and each officer and director of such
selling Investor, such broker/dealer and each person, if any, who controls such
selling Investor, or broker/dealer and each person who controls such
broker/dealer within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, and expenses (including
reasonable fees of counsel and any amounts paid in any settlement effected with
the Company's prior written consent) to which they may become subject (including
the settlement of litigation) under the Securities Act, the Exchange Act, state
securities laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, or any registration statement pursuant
to which Registrable Shares are registered pursuant to Section 4 hereof, in any
preliminary prospectus or final prospectus relating thereto or in any amendments
or supplements to the Registration Statement, or any registration statement
pursuant to which Registrable Shares are registered pursuant to Section 4
hereof, or any such preliminary prospectus or final prospectus, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the statements therein
not misleading or any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, state securities laws, or otherwise or any
rule or regulation promulgated under the Securities Act, the Exchange Act, state
securities laws or NASDAQ or (ii) any failure of the Company to fulfill any
undertaking included in the Registration Statement, or any registration
statement pursuant to which Registrable Shares are registered pursuant to
Section 4 hereof; and will reimburse such selling Investor, broker/dealer or
such officer, director or controlling person for any expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action (including reasonable expenses of legal
counsel); provided, however, that the indemnity agreement contained in this
Section 9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission made in connection with
the Registration Statement or any registration statement pursuant to which
Registrable Shares are registered pursuant to Section 4 hereof, or any
preliminary prospectus or final prospectus relating thereto or any amendments or
supplements thereto or any such preliminary prospectus or final prospectus, in
reliance upon and in conformity with written information furnished expressly for
use in connection with the Registration

Statement or any such preliminary prospectus or final prospectus by the selling
Investors or for them or controlling person with respect to them. Such indemnity
and reimbursement of expenses shall remain in full force and effect regardless
of any investigation made by or on behalf of such indemnified party and shall
survive the sale of such Registrable Shares by such selling Investor.

                  (b) To the extent permitted by law, each selling Investor will
severally, and not jointly, indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the Registration Statement, or
any registration statement pursuant to which Registrable Shares are registered
pursuant to Section 4 hereof, each person, if any, who controls the Company
within the meaning of the Securities Act, any investment banking firm acting as
underwriter for the Company or the selling Investors, or any broker/dealer
acting on behalf of the Company or any selling Investor, and all other selling
Investors against any losses, claims, damages or liabilities to which the
Company or any such director, officer, controlling person, underwriter, or
broker/dealer or such other selling Investor may become subject to, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, or any registration statement pursuant to which
Registrable Shares are registered pursuant to Section 4 hereof, or any
preliminary prospectus or final prospectus, relating thereto or in any
amendments or supplements to the Registration Statement, or any registration
statement pursuant to which Registrable Shares are registered pursuant to
Section 4 hereof, or any such preliminary prospectus or final prospectus, or
arise out of or are based upon the 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 and only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, or any registration
statement pursuant to which Registrable Shares are registered pursuant to
Section 4 hereof, in any preliminary prospectus or final prospectus relating
thereto or in any amendments or supplements to the Registration Statement, or
any registration statement pursuant to which Registrable Shares are registered
pursuant to Section 4 hereof, or any such preliminary prospectus or final
prospectus, in reliance upon and in conformity with written information
furnished by the selling Investor expressly for use in connection with the
Registration Statement, or any preliminary prospectus or final prospectus; and
such selling Investor will reimburse any expenses reasonably incurred by the
Company or any such director, officer, controlling person, underwriter,
broker/dealer or other selling Investor in connection with investigating or
defending any such loss, claim, damage, liability or action (including
reasonable expenses of legal counsel); provided, however, that the liability of
each selling Investor hereunder shall be limited to the proceeds (net of
underwriting discounts and commissions, if any) received by such selling
Investor from the sale of Registrable Shares covered by the Registration
Statement, or any registration statement pursuant to which Registrable Shares
are registered pursuant to Section 4 hereof; and provided, further, however,
that the indemnity agreement contained in this Section 9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of those selling Investor(s)
against which the request for indemnity is being made (which consent shall not
be unreasonably withheld). Such indemnity and reimbursement of expenses shall
remain in full force and effect regardless of any investigation made by or on
behalf of such indemnified party and, as relevant, shall survive the sale of
such Registrable Shares by any selling Investor.

                  (c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 9, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in and, to the extent the indemnifying party desires, jointly with
any other indemnifying party

similarly noticed, to assume at its expense the defense thereof with counsel
mutually satisfactory to the indemnifying parties with the consent of the
indemnified party which consent will not be unreasonably withheld, conditioned
or delayed. In the event that the indemnifying party assumes any such defense,
the indemnified party may participate in such defense with its own counsel and
at its own expense; provided, however, that the counsel for the indemnifying
party shall act as lead counsel in all matters pertaining to such defense or
settlement of such claim and the indemnifying party shall only pay for such
indemnified party's expenses for the period prior to the date of its
participation on such defense. The failure to notify an indemnifying party
promptly of the commencement of any such action, if prejudicial to his ability
to defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 9, but the omission so to notify the
indemnifying party will not relieve him of any liability which he may have to
any indemnified party otherwise other than under this Section 9.

                  (d) If the indemnification provided for in this Section 9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage, liability or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, or expense in such proportion
as is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, claim or expense as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. If, however, the allocation provided in the
first sentence of this paragraph is not permitted by applicable law, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative faults but also the relative benefits of the indemnifying party and the
indemnified party as well as any other relevant equitable considerations. The
parties hereto agree that it would not be just and equitable if contributions
pursuant to this Section 9(d) were to be determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable
considerations referred to in the preceding sentences of this Section 9(d). The
amount paid or payable in respect of any claim shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending such loss, claim, damage or liability
(including legal expenses reasonably incurred). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding anything in this Section 9(d) to
the contrary, no indemnifying party shall be required pursuant to this Section
9(d) to contribute any amount in excess of the net proceeds received by such
indemnifying party from the sale of Registrable Shares in the offering to which
the loss, claims, damage or liability of the indemnified parties relate, less
the amount of any indemnification payment made by such indemnifying party
pursuant to Section 9(b).

                  (e) The obligations of the Company and the selling Investors
under this Section 9 shall survive the completion of any offering of Registrable
Shares in a Registration Statement, or any registration statement pursuant to
which Registrable Shares are registered pursuant to Section 4 hereof, and
otherwise.

                  (f) Notwithstanding anything to the contrary herein, the
indemnifying party shall not be entitled to settle any claim, suit or proceeding
unless in connection with such settlement

the indemnified party receives an unconditional release with respect to the
subject matter of such claim, suit or proceeding and such settlement does not
contain any admission of fault by the indemnified party.

         10. Reports under the Exchange Act. With a view to making available to
the Investors the benefits of Rule 144 and any other rule or regulation of the
SEC that may at any time permit the Investors to sell the Purchased Shares to
the public without registration, the Company agrees to use commercially
reasonable efforts: (i) to make and keep public information available, as those
terms are understood and defined in the General Instructions to Form S-3, or any
successor or substitute form, and in Rule 144; (ii) to file with the SEC in a
timely manner all reports and other documents required to be filed by an issuer
of securities registered under the Securities Act or the Exchange Act; (iii) as
long as any Investor owns any Purchased Shares, to furnish in writing upon such
Investor's request a written statement by the Company that it has complied with
the reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act, and to furnish to such Investor a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so
filed by the Company as may be reasonably requested in availing such Investor of
any rule or regulation of the SEC permitting the selling of any such Purchased
Shares without registration; and (iv) undertake any additional actions
reasonably necessary to maintain the availability of the Registration Statement
or the use of Rule 144.

         11. Deferral and Lock-up. Notwithstanding anything in this Agreement to
the contrary, if the Company shall furnish to the selling Investors a
certificate signed by the President or Chief Executive Officer of the Company
stating that the Board of Directors of the Company has made the good faith
determination (i) that continued use by the selling Investors of the
Registration Statement, or any registration statement pursuant to which
Registrable Shares are registered pursuant to Section 4 hereof, for purposes of
effecting offers or sales of Registrable Shares pursuant thereto would require,
under the Securities Act, premature disclosure in the Registration Statement, or
any registration statement pursuant to which Registrable Shares are registered
pursuant to Section 4 hereof (or the prospectus relating thereto) of material,
nonpublic information concerning the Company, its business or prospects or any
proposed material transaction involving the Company, (ii) that such premature
disclosure would be materially adverse to the Company, its business or prospects
or any such proposed material transaction or would make the successful
consummation by the Company of any such material transaction significantly less
likely and (iii) that it is therefore essential to suspend the use by the
Investors of such Registration Statement, or any registration statement pursuant
to which Registrable Shares are registered pursuant to Section 4 hereof (and the
prospectus relating thereto) for purposes of effecting offers or sales of
Registrable Shares pursuant thereto, then the right of the selling Investors to
use the Registration Statement, or any registration statement pursuant to which
Registrable Shares are registered pursuant to Section 4 hereof (and the
prospectus relating thereto) for purposes of effecting offers or sales of
Registrable Shares pursuant thereto shall be suspended for not more than two
30-day periods in a twelve month period (the "SUSPENSION PERIOD(S)") after
delivery by the Company of the certificate referred to above in this Section 11.
In no event, however, will any suspension be any longer than is reasonably
necessary to avoid the adverse effect. During the Suspension Period, none of the
Investors shall offer or sell any Registrable Shares publicly pursuant to or in
reliance upon the Registration Statement, or any registration statement pursuant
to which Registrable Shares are registered pursuant to Section 4 hereof (or the
prospectus relating thereto).

         12. Transfer of Registration Rights. None of the rights of any Investor
under this Agreement shall be transferred or assigned to any person unless (i)
such person is a Qualifying Holder (as defined below), and (ii) such person
agrees to become a party to, and bound by, all of the terms and conditions of,
this Agreement by duly executing and delivering to the Company an Instrument of
Adherence in the form

attached as Exhibit B hereto. For purposes of this Section 12, the term
"QUALIFYING HOLDER" shall mean, with respect to any Investor, (i) any partner
thereof, (ii) any corporation, partnership controlling, controlled by, or under
common control with, such Investor or any partner thereof, or (iii) any other
direct transferee from such Investor of at least 75,000 shares included as
Registrable Shares on the date hereof that are held or that may be acquired by
such Investor. None of the rights of any Investor under this Agreement shall be
transferred or assigned to any person (including, without limitation, a
Qualifying Holder) that acquires Registrable Shares in the event that and to the
extent that such person is eligible to resell such Registrable Shares pursuant
to Rule 144(k) of the Securities Act or may otherwise resell such Registrable
Shares pursuant to an exemption from the registration provisions of the
Securities Act.

         13. Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Investors holding a majority of the Registrable Shares then outstanding,
enter into any agreement with any holder or prospective holder of any securities
of the Company that would allow such holder or prospective holder to include
such securities in any registration statement filed pursuant to Section 3
hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of his securities will not reduce the amount of the
Registrable Shares of the Investors that is included.

         14. No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any Investor to sell any
Registrable Shares pursuant to any effective registration statement.

         15. Nominees for Beneficial Owners. If Registrable Shares are held by a
nominee for the beneficial owner thereof, the beneficial owner thereof may, at
its option, be treated as the holder of such Registrable Shares for purposes of
any request or other action by any Investor pursuant to this Agreement (or any
determination of any number or percentage of shares constituting Registrable
Shares held by any Investor contemplated by this Agreement); provided that the
Company shall have received assurances reasonably satisfactory to it of such
beneficial ownership.

         16. Entire Agreement. This Agreement along with the schedules and
exhibits attached hereto and incorporated herewith constitute and contain the
entire agreement and understanding of the parties with respect to the subject
matter hereof, and supersedes any and all prior negotiations, correspondence,
agreements or understandings with respect to the subject matter hereof and
supercedes all prior agreements, negotiations, understandings, representations
and statements respecting the subject matter hereof, whether oral or written.

         17.      Miscellaneous.

                  (a) Amendment. No amendment, modification, alteration, waiver
or change in any of the terms of this Agreement shall be valid or binding upon
the parties hereto unless made in writing and duly executed by the Company and
(a) prior to Closing, not less than five (5) Initial Investors who represent at
least fifty percent (50%) of the Purchased Shares or (b) following Closing, a
majority of the Investors; provided, however, that in each case, no such
amendment shall increase the obligations of any Investor without such Investor's
written consent.

                  (b) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
California and without regard to any conflicts of laws concepts that would apply
the laws of another jurisdiction.

                  (c) Assignment. The rights and obligations of the parties
hereto shall inure to the benefit of, and shall be binding upon the authorized
successors and permitted assigns of each party; provided that the terms and
conditions of Section 12 hereof are satisfied. This Agreement shall also be
binding upon and inure to the benefit of any transferee of any of the Purchased
Shares; provided the terms and conditions of Section 12 hereof are satisfied.
Notwithstanding anything in this Agreement to the contrary, if at any time any
Investor shall cease to own any Registrable Shares, all of such Investor's
rights under this Agreement shall immediately terminate; provided, however, that
if such Investor ceases to own Registrable Shares because such shares were sold
pursuant to an effective registration statement filed pursuant to Section 3 or 4
hereof, then such Investor shall continue to be subject to Section 9 hereof, as
provided in Section 9(e) hereof. In the event of any assignment by an Investor
in accordance with the terms of this Agreement, the assignee shall specifically
assume and be bound by the provisions of the Agreement by executing the
Instrument of Adherence attached hereto as Exhibit B.

                  (d) Specific Performance. Each of the parties hereto
acknowledges and agrees that damages will not be an adequate remedy for any
material breach or violation of this Agreement if such material breach or
violation would cause immediate and irreparable harm (an "IRREPARABLE BREACH").
Accordingly, in the event of a threatened or ongoing Irreparable Breach, each
party hereto shall be entitled to seek, in any state or federal court in the
State of California, equitable relief of a kind appropriate in light of the
nature of the ongoing or threatened Irreparable Breach, which relief may
include, without limitation, specific performance or injunctive relief;
provided, however, that if the party bringing such action is unsuccessful in
obtaining the relief sought, the moving party shall pay the non-moving party's
costs, including actual attorney's fees, incurred in connection with defending
such action. Such remedies shall not be the parties' exclusive remedies, but
shall be in addition to all other remedies provided in this Agreement.

                  (e) Notice. Any notices, reports or other correspondence
(hereinafter collectively referred to as "CORRESPONDENCE") required or permitted
to be given hereunder shall be sent by courier (overnight or same day) or
facsimile or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder. The date of giving any notice shall
be the date of its actual receipt.

                           (i) All correspondence to the Company shall be
addressed as follows:

                                    La Jolla Pharmaceutical Company
                                    6455 Nancy Ridge Drive
                                    San Diego, CA 92121
                                    Attention:  Chief Executive Officer
                                    Facsimile:  (858) 626-2851

                                    with a copy to:

                                    Gibson, Dunn & Crutcher LLP
                                    4 Park Plaza, Suite 1700
                                    Irvine, California 92614
                                    Attention:  Leonard J. McGill
                                    Facsimile:  (949) 451-4220

                        (ii) All correspondence to any Investor shall be sent to
such Investor at the address set forth in Exhibit A, with a copy to Designated
Counsel at:

                                    Kelley Drye & Warren LLP
                                    101 Park Avenue
                                    New York, New York 10178
                                    Attention:  Salvatore J. Vitiello, Esq.
                                    Facsimile:  (212) 808-7897

                        (iii)       Any entity may change the address to which
correspondence to it is to be addressed by notification as provided for herein.

                  (f) Waiver. No waiver of any term, provision or condition of
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or be construed as, a further or continuing waiver of any
such term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.

                  (g) Counterparts. This Agreement may be executed 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.

         (The remainder of this page has been intentionally left blank;
                            signature page follows)

         IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first above written.

                                             LA JOLLA PHARMACEUTICAL COMPANY

                                             By:
                                                      Steven B. Engle
                                                      Chief Executive Officer

         THE INITIAL INVESTOR'S SIGNATURE TO THE INVESTOR QUESTIONNAIRE DATED
EVEN DATE HEREWITH SHALL CONSTITUTE THE INITIAL INVESTOR'S SIGNATURE TO THIS
REGISTRATION RIGHTS AGREEMENT.

EX-99.1

                                                                    EXHIBIT 99.1


COMPANY CONTACT:
Andrew Wiseman, Ph.D.
Sr. Director of Business Development
La Jolla Pharmaceutical Company
858-646-6615
andrew.wiseman@ljpc.com


                    LA JOLLA PHARMACEUTICAL COMPANY ANNOUNCES
                         $51.6 MILLION PRIVATE PLACEMENT

SAN DIEGO, JANUARY 15, 2002 - La Jolla Pharmaceutical Company (Nasdaq: LJPC)
today announced that it has entered into definitive purchase agreements for the
sale of an aggregate of seven million shares of newly issued Common Stock to
selected institutional and other accredited investors for gross proceeds of
approximately $51.6 million. The purchase price was $7.37 per share. The
transactions are expected to close by January 18, 2002. UBS Warburg LLC and
Pacific Growth Equities, Inc. served as placement agents for these transactions.

The shares of Common Stock have not been registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United States absent
registration, or an applicable exemption from registration. The Company has
agreed to register these shares for resale. This press release does not
constitute an offer of any securities for sale.

The Company intends to use net proceeds from this private placement for research
and development, including clinical trials of the Company's product candidates,
and for working capital and general corporate purposes.

La Jolla Pharmaceutical Company is a biotechnology company developing
therapeutics for antibody-mediated autoimmune diseases.

Statements made in this press release about La Jolla Pharmaceutical's sale of
stock and plans regarding use of the net proceeds from the sale are
forward-looking statements and are subject to a number of uncertainties that
could cause actual events to differ materially from the statements made,
including risks associated with the success of clinical trials, the progress of
research and product development programs, the regulatory approval process,
competitive products, future capital requirements and the extent and breadth of
La Jolla Pharmaceutical's patent portfolio. Interested parties are urged to
review the risks detailed from time to time in La Jolla Pharmaceutical Company's
Securities and Exchange Commission filings, including the report on Form 10-K as
amended for the year ended December 31, 2000 and in Form 10-Q for the quarter
ended September 30, 2001.