<PAGE>
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: February 10, 1999
LJL BIOSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
000-23647
(Commission File Number)
DE 77-0360183
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
405 TASMAN DRIVE, SUNNYVALE, CA 94089
(Address of principal executive offices, with zip code)
(408) 541-8787
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
On January 27, 1999, LJL BioSystems, Inc. a Delaware corporation (the
"Company") announced that it had arranged a private placement (the "Private
Placement") of 2,000,000 shares of the Company's Common Stock, at a purchase
price of $3.50 per share, for a total of $7 million in cash. The closing of
the Private Placement took place on January 27, 1999. The purchasers
consisted of The Bay City Capital Fund I, L.P., The Kaufmann Fund, Inc., and
Skyline Venture Partners, L.P. The Company relied on Rule 506 of Regulation
D under the Securities Act of 1933, as amended (the "Act"), which among other
things, provides an exemption from registration requirements of the Act for
sales to accredited investors (as defined by Rule 501(a) of Regulation D of
the Act). Under the terms of the Private Placement, the Company has agreed to
file a Registration Statement on Form S-3 within six months after the closing
of the transaction to register the shares of the Company's Common Stock that
were delivered to the investors at the closing. The specific terms of the
shares of Common Stock sold in the Private Placement are contained in Common
Stock Purchase Agreement and Registration Rights Agreement attached as
exhibits hereto and incorporated by reference herein. Further details of
this transaction are contained in the Company's press release dated January
27, 1999, attached as an exhibit hereto and incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit 4.4 Common Stock Purchase Agreement dated January 25,
1999, by and among LJL BioSystems, Inc. and the
Purchasers (as defined therein)
Exhibit 4.5 Registration Rights Agreement dated January 27, 1999,
by and among the Company and the Holders (as defined
therein)
Exhibit 99 LJL BioSystems, Inc. Press Release dated January 27,
1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LJL BIOSYSTEMS, INC.
Date: February 10, 1999 By: /s/ Lev J. Leytes
-------------------------------------
Lev J. Leytes
President and Chief Executive Officer
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<PAGE>
LJL BIOSYSTEMS, INC.
<TABLE>
<CAPTION>
Exhibit Number Description
<S> <C>
Exhibit 4.4 Common Stock Purchase Agreement
dated January 25, 1999
by and among LJL BioSystems, Inc.
and the Purchasers (as defined
therein)
Exhibit 4.5 Registration Rights Agreement dated
January 27, 1999, by and among the
Company and the Holders (as defined
therein)
Exhibit 99 LJL BioSystems, Inc. Press Release
dated January 27, 1999
</TABLE>
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<PAGE>
LJL BIOSYSTEMS, INC.
COMMON STOCK PURCHASE AGREEMENT
JANUARY 25, 1999
<PAGE>
LJL BIOSYSTEMS, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "AGREEMENT") is entered into
as of this 25th day of January, 1999 (the "EFFECTIVE DATE") among LJL
BioSystems, Inc., a Delaware corporation (the "COMPANY") and the investors
listed on EXHIBIT A attached hereto (each a "PURCHASER" and together the
"PURCHASERS").
SECTION 1
SALE OF COMMON STOCK AND WARRANT
1.1 SALE OF COMMON STOCK. Subject to the terms and conditions hereof,
on the Closing Date, as defined below, the Company will issue and sell to
each Purchaser, and each Purchaser will purchase from the Company the number
of whole shares of Common Stock, par value $0.001 per share, of the Company
(the "PURCHASED COMMON STOCK"), calculated by dividing the dollar amount set
forth opposite such Purchaser's name on EXHIBIT A by $3.50.
1.2 CLOSING DATE. The closing (the "CLOSING") of the purchase and sale
of the Common Stock (referred to herein as the "SECURITIES") shall be held at
the offices of Venture Law Group, 2800 Sand Hill Road, Menlo Park, California
at 10:00 a.m. on January 27, 1999, or at such other time and place upon which
the Company and the Purchasers shall mutually agree (the date of the Closing
is hereinafter referred to as the "CLOSING DATE").
1.3 DELIVERY. At the Closing, the Company will deliver to each
Purchaser a certificate or certificates representing the shares of Common
Stock purchased by such Purchaser, against payment of the purchase price
therefor, by wire transfer or certified or cashier's check drawn on a United
States ("U.S.") bank.
1.4 LEGEND. The certificate or certificates for the Securities shall
be subject to a legend restricting transfer under the Securities Act of 1933,
as amended (the "SECURITIES ACT") and referring to restrictions on transfer
herein, such legend to be substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (A) AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, OR (B) AN OPINION OF COUNSEL FOR THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (C) FULL COMPLIANCE WITH THE PROVISIONS OF RULE 144
UNDER THE ACT."
In addition, the certificates for the Securities issued and sold to The
Bay City Capital Fund I, L.P. ("Bay City Fund") and Skyline Venture Partners,
L.P. shall include appropriate legends to reflect such Purchasers' status as
affiliates of the Company.
<PAGE>
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchasers that as of
the Effective Date:
2.1 ORGANIZATION. The Company is a corporation duly organized and
validly existing under the laws of the State of Delaware and is in good
standing under such laws. The Company has requisite corporate power and
authority to own, lease and operate its properties and assets, and to carry
on its business as presently conducted and as proposed to be conducted. The
Company is qualified to do business as a foreign corporation in each
jurisdiction in which the ownership of its property or the nature of its
business requires such qualification, except where failure to so qualify
would not have a materially adverse effect on the Company. The Company has
no subsidiaries or equity interest in any other entity other than LJL
BioSystems Ltd., a U.K. subsidiary.
2.2 CAPITALIZATION. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, $0.001 par value, of which at
December 31, 1998, approximately 10,524,493 shares were issued and
outstanding, and 2,000,000 shares of Preferred Stock, $0.001 par value, of
which no shares of Preferred Stock were issued and outstanding and warrants
exercisable for 73,679 shares of Common Stock were issued and outstanding.
Since December 31, 1998, no shares of the Company's Common or Preferred Stock
have been issued, except pursuant to the exercise of outstanding options and
except pursuant to the Company's 1998 Employee Stock Purchase Plan. All such
issued and outstanding shares have been duly authorized and validly issued
and are fully paid and nonassessable. As of December 31, 1998, there were
options outstanding for approximately 1,509,053 shares of Common Stock and
approximately 890,144 shares available for future issuance. Except as
described in this Section 2.2, there are no other options, warrants,
conversion privileges or other contractual rights presently outstanding to
purchase or otherwise acquire any authorized but unissued shares of the
Company's capital stock or other securities other than pursuant to the
Company's stock option plans and Employee Stock Purchase Plan. All of the
issued and outstanding securities of the Company have been issued in
compliance with all applicable federal and state securities laws.
2.3 AUTHORIZATION. The Company has all corporate right, power and
authority to enter into this Agreement and the Registration Rights Agreement
substantially in the form attached hereto as EXHIBIT D (the "Registration
Rights Agreement") and to consummate the transactions contemplated hereby and
thereby. All corporate action on the part of the Company, its directors and
stockholders necessary for the authorization, execution, delivery and
performance of this Agreement and the Registration Rights Agreement by the
Company, and the authorization, sale, issuance and delivery of the Securities
being sold hereunder by the Company has been taken. This Agreement and the
Registration Rights Agreement have been duly executed and delivered by the
Company and constitute legal, valid and binding obligations of the Company
enforceable in accordance with their respective terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law
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<PAGE>
governing specific performance, injunctive relief or other equitable
remedies, and to limitations of public policy as they may apply to Section
1.7 of the Registration Rights Agreement. Upon their issuance and delivery
pursuant to this Agreement, all of the Securities being sold by the Company
hereunder will be duly and validly issued, fully paid and nonassessable and
free and clear of any liens and encumbrances other than restrictions on
transfer pursuant to state and federal securities laws. There are no
statutory, contractual or other preemptive rights, rights of first refusal,
co-sale rights or similar rights with respect to the issuance and sale of the
Securities.
2.4 VALIDITY OF SECURITIES. The Securities, when issued, sold and
delivered by the Company in accordance with the terms of this Agreement, will
be duly and validly issued, fully-paid and nonassessable. Based in part upon
the representations of the Purchasers in this Agreement, the offer, sale and
issuance of the Securities will be made in compliance with all applicable
federal and state securities laws.
2.5 NO CONFLICT. The execution and delivery of this Agreement and the
Registration Rights Agreement do not, and the consummation of the
transactions contemplated hereby and thereby will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit, under, any
provision of the Certificate of Incorporation or Bylaws of the Company or any
material agreement attached as an exhibit to the Company's SEC Documents, or
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company, its properties or assets, which conflict,
violation, default or right would have a material adverse effect on the
business, properties, prospects or financial condition of the Company.
2.6 ACCURACY OF REPORTS; FINANCIAL STATEMENTS. All reports required to
be filed with the Securities and Exchange Commission (the "SEC") by the
Company since March 18, 1998 (the date of the Company's initial public
offering) through the date of this Agreement under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), copies of which have been made
available to each Purchaser (the "SEC Documents"), have been duly and timely
filed, were in substantial compliance with the requirements of their
respective forms when filed, were complete and correct in all material
respects as of the dates at which the information was furnished, and
contained (as of such dates) no untrue statement of a material fact nor
omitted to state a material fact necessary in order to make the statements
made therein in light of the circumstances in which made not misleading. The
financial statements of the Company included in the SEC Documents (the
"Financial Statements") comply as to form in all material respects with
applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position
of the Company at the dates thereof and the consolidated results of
operations and consolidated cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal, recurring adjustments).
Since the date of the last filing of an SEC Document, there has not been any
material adverse change in the assets, business, financial condition or
results of operations of the Company; PROVIDED, HOWEVER, that changes in the
ordinary course of business, including but not limited to the use of cash and
increase in liabilities, shall not be deemed to be a
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<PAGE>
material adverse change.
2.7 GOVERNMENTAL CONSENTS, ETC. No consent, approval or authorization
of or designation, declaration or filing with any governmental authority on
the part of the Company is required in connection with the valid execution
and delivery of this Agreement or the Registration Rights Agreement, or the
consummation of any other transaction contemplated hereby and thereby, except
such filings as may be required to be made with the SEC, the National
Association of Securities Dealers, Inc. and with governmental authorities for
purposes of effecting compliance with the securities and blue sky laws in the
states in which Securities are offered and/or sold (which compliance will be
effected in accordance with such laws).
2.8 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation pending or as to which the Company has received
any notice of assertion against the Company, which could reasonably be
expected to result in a material adverse effect on the business, properties,
financial condition or operations of the Company.
2.9 REGISTRATION RIGHTS. Except for the rights set forth in the
Amended and Restated Investors' Rights Agreement dated June 17, 1997, a copy
of which has been made available to each Purchaser, the Company is not
presently under any obligation and has not granted any rights to register its
securities under the Securities Act with respect to any of its presently
outstanding securities, which rights would be implicated with respect to the
registration contemplated by the Registration Rights Agreement and which
rights have not been waived by the holders thereof.
2.10 NO MATERIAL DEFAULT. The Company is not in violation of or default
in any material respect under any provision of (a) its Certificate of
Incorporation or Bylaws, (b) any federal or state judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company, or (c)
any material agreement attached as an exhibit to the Company's SEC Documents,
except such violations or defaults as would not have a material adverse
effect on the business, properties, prospects or financial condition of the
Company.
2.11 LISTING. The Company's Common Stock is traded on The Nasdaq
National Market.
2.12 DISCLOSURE. No representation or warranty of the Company contained
in this Agreement or the exhibits attached hereto (when read together and
taken as a whole), contains any untrue statement of a material fact or omits
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.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly with other Purchasers, hereby
represents and warrants to the Company as follows as of the Effective Date:
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<PAGE>
3.1 INVESTMENT. Such Purchaser will acquire the Securities purchased
from the Company pursuant to this Agreement for investment for its own
account, not as a nominee or agent and not with a view to or for resale in
connection with any distribution thereof. Purchaser understands that the
Securities purchased by such Purchaser from the Company pursuant to this
Agreement have not been registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of such
Purchaser's investment intent and the accuracy of such Purchaser's
representations as expressed herein.
3.2 ACCREDITED INVESTOR. Such Purchaser is an "accredited investor" as
defined by Rule 501(a) of the Securities Act of 1933, as amended (the
"Securities Act"). The SEC documents have been made available to each
Purchaser, and each Purchaser has received all the information it has
requested regarding the Company. Such Purchaser has such business and
financial experience as is required to give it the capacity to protect its
own interests in connection with the purchase of the Securities.
3.3 AUTHORITY. This Agreement and the Registration Rights Agreement
have been duly executed and delivered by such Purchaser and constitute legal,
valid and binding obligations of such Purchaser, enforceable in accordance
with their respective terms, subject to laws of general application relating
to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable
remedies, and to limitations of public policy as they may apply to Section
1.7 of the Registration Rights Agreement. The execution and delivery of this
Agreement and the Registration Rights Agreement do not, and the consummation
of the transactions contemplated hereby and thereby will not, conflict with
or result in any violation of any obligation under any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to such
Purchaser.
3.4 GOVERNMENT CONSENTS, ETC. No consent, approval or authorization of
or designation, declaration or filing with any governmental authority on the
part of such Purchaser is required in connection with the valid execution and
delivery of this Agreement, or the offer, sale or issuance of the Securities,
or the consummation of any other transaction contemplated hereby.
3.5 INVESTIGATION. Such Purchaser has had a reasonable opportunity to
discuss the Company's business, management and financial affairs with the
Company's management.
SECTION 4
CONDITIONS TO OBLIGATIONS OF THE PURCHASERS
The obligations of each Purchaser to the Company under this Agreement
are subject to the fulfillment, on or before the Closing, of each of the
following conditions, unless otherwise waived:
4.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 2 shall be true and correct in all
material respects when made
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<PAGE>
and on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date.
4.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects.
4.3 NO ACTION, ETC. PENDING. There shall not at Closing be in effect
any action, order, or other proceeding, preventing, enjoining or otherwise
restraining the transactions contemplated by this Agreement.
4.4 NO LAW PROHIBITING OR RESTRICTING SALE. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise referenced in this
Agreement).
4.5 COMPLIANCE CERTIFICATE. The Company shall have delivered to the
Purchasers a certificate substantially in the form attached hereto as EXHIBIT
B executed by a duly authorized officer, dated the Closing Date, certifying
to the fulfillment of the conditions specified in Sections 4.1 and 4.2 and
certifying that, since the date of the Company's most recent filing with the
SEC, there has not been any material adverse change in the assets,
liabilities, financial condition or operations of the Company; PROVIDED,
HOWEVER, that changes in the ordinary course of business, including but not
limited to the use of cash and increase in liabilities, shall not be deemed
to be a material adverse change.
4.6 REGISTRATION RIGHTS AGREEMENT. On or before the Closing, the
Company and the Purchasers shall have executed and delivered a counterpart of
the Registration Rights Agreement in the form attached hereto as EXHIBIT C.
4.7 OPINION OF COMPANY COUNSEL. The Purchasers shall have received
from Venture Law Group, counsel for the Company, an opinion, dated as of the
Closing, substantially in the form attached hereto as EXHIBIT D.
4.8 DIRECTOR. The Company shall have taken all actions necessary to
ensure that John Diekman shall be appointed, effective immediately after the
Closing, to serve on the Company's board of directors.
SECTION 5
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement are subject to the
fulfillment on or prior to the Closing of each of the following conditions,
unless otherwise waived:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Purchasers in Section 3 hereof shall be true and
correct in all material respects when
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<PAGE>
made and on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date.
5.2 PERFORMANCE. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchasers on or prior to the Closing
Date shall have been performed or complied with in all material respects.
5.3 NO ACTION, ETC. PENDING. There shall not at Closing be in effect
any action, order or other proceeding, preventing, enjoining or otherwise
restraining the transactions contemplated by this Agreement.
5.4 NO LAW PROHIBITING OR RESTRICTING SUCH SALE. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise provided in this
Agreement).
SECTION 6
POST-CLOSING COVENANTS
6.1 POST-CLOSING COVENANT OF THE COMPANY. Until the earlier of (i) the
date upon which Bay City Fund and its affiliates beneficially own 75% or less
of the shares of Purchased Common Stock that Bay City Fund purchases
hereunder or (ii) four (4) years from the Closing, the Company shall, subject
to the fiduciary obligations of the Board of Directors to the Company's
stockholders based on advice of legal counsel, (i) nominate and include in
the Company proxy statement a representative designated by Bay City Capital
LLC ("BAY CITY") as a Class II director of the Company's Board of Directors
at each annual meeting of stockholders of the Company where the class of
which such designee is a member is up for election, and (ii) in the event
that any such designee shall resign or be removed as a director for any
reason during the period that this Section 6.1 is in effect, fill the vacancy
resulting thereby by a designee of Bay City. The Company shall provide all
rights and benefits of indemnity to such designee as are provided such other
outside directors.
6.2 POST-CLOSING COVENANT OF THE PURCHASERS. Until the earlier of (i)
the date upon which Bay City Fund beneficially owns 75% or less of the Common
Stock purchased by Bay City Fund pursuant to this Agreement or (ii) four (4)
years from the Closing, the Purchasers (which term, for the purposes of this
Section 6.2, shall include all affiliates of the Purchasers that may from
time to time beneficially own shares of Common Stock) shall take such action
as may be required so that all shares of voting stock of the Company
beneficially owned by the Purchasers are voted for the nominee to the Board
of Directors of the Company which is nominated consistent with the provisions
of Section 6.1 above.
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SECTION 7
MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State
of California, without giving effect to principles of conflicts of law.
7.2 MAINTENANCE OF LISTING. For so long as the Company is obligated to
keep in effect any registration statement provided for under the Registration
Rights Agreement, the Company will use its reasonable best efforts to
maintain its listing on The Nasdaq National Market or a national securities
exchange, as defined in the Exchange Act.
7.3 FILINGS. The parties shall consult and fully cooperate with and
provide assistance to each other in preparing and filing as soon as
practicable all consents, approvals and authorizations necessary or advisable
to be made or obtained from any third-party or governmental agency in order
to consummate the transactions contemplated hereby.
7.4 SURVIVAL. Unless otherwise set forth in this Agreement, the
representations and warranties of the Company and the Purchasers contained in
or made pursuant to this Agreement shall terminate six (6) months following
the Closing; provided, however, that the covenants in Section 6 shall survive
for the terms stated therein.
7.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns.
7.6 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Registration
Rights Agreement and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with
regard to the subject matter hereof and thereof and supersede all prior
agreements and understandings among the parties relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
the party against which enforcement of any such amendment, waiver, discharge
or termination is sought.
7.7 NOTICES AND DATES. Unless otherwise provided herein, any notice
required or permitted by this Agreement shall be in writing and shall be
deemed sufficient upon delivery, when delivered personally or by overnight
courier and addressed to the party to be notified at such party's address as
set forth on EXHIBIT A hereto, or to the Company at its address specified on
its signature page hereto, or as subsequently modified by written notice. In
the event that any date provided for in this Agreement falls on a Saturday,
Sunday or legal holiday, such date shall be deemed extended to the next
business day.
7.8 BROKERS.
(a) The Company has not engaged, consented to or authorized any
broker,
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finder or intermediary to act on its behalf, directly or indirectly, as a
broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. The Company hereby agrees to indemnify and
hold harmless the Purchasers from and against all fees, commissions or other
payments owing to any party acting on behalf of the Company hereunder.
(b) No Purchaser has engaged, consented to or authorized any
broker, finder or intermediary to act on its behalf, directly or indirectly,
as a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. Each Purchaser hereby agrees to indemnify
and hold harmless the Company from and against all fees, commissions or other
payments owing to any party acting on behalf of such Purchaser hereunder.
7.9 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
7.10 COSTS AND EXPENSES. Each party hereto shall pay its own costs and
expenses incurred in connection herewith, including the fees of its counsel,
auditors and other representatives, whether or not the transactions
contemplated herein are consummated.
7.11 NO THIRD PARTY RIGHTS. Nothing in this Agreement shall create or
be deemed to create any rights in any person or entity not a party to this
Agreement.
7.12 PUBLICITY. The Purchasers and the Company shall not issue any
public statement concerning the transactions contemplated by this Agreement
without the reasonable prior written consent of the parties named in such
public statement; PROVIDED, HOWEVER, that the parties may disclose the
transaction or the terms hereof or thereof from time to time without the
approval of the party whose name is disclosed if (i) such approval has been
requested and not received and such party concludes (after consulting with
counsel) that it is required by law to disclose the transaction or the terms
thereof or (ii) to the extent that similar disclosure has been previously
approved pursuant to this Section 7.12.
7.13 CAPTIONS AND HEADINGS. The captions and headings used herein are
for convenience and ease of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
7.14 COUNTERPARTS. This Agreement may be executed in counterparts, and
each such counterpart shall be deemed an original for all purposes.
[SIGNATURE PAGES FOLLOW]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date first written
above.
LJL BIOSYSTEMS, INC.
By: /s/ Lev J. Leytes
----------------------------------
Its: President
----------------------------------
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date first written
above.
THE BAY CITY CAPITAL FUND I, L.P.
By: BAY CITY CAPITAL MANAGEMENT LLC
Its: General Partner
By: /s/ Roger H. Salquist
----------------------------------
Name: Roger H. Salquist
----------------------------
Title: Managing Director
----------------------------
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date first written
above.
SKYLINE VENTURE PARTNERS, L.P.
By: Skyline Venture Management LLC
Its: General Partner
By: /s/ John Freund
----------------------------------
John Freund
Managing Director
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date first written
above.
THE KAUFMANN FUND, INC.
By: /s/ Hans P. Utsch
----------------------------------
Hans P. Utsch
President
<PAGE>
EXHIBIT A
SCHEDULE OF PURCHASERS
<TABLE>
<CAPTION>
Number of Securities of Aggregate
Name and Address Common Stock Purchase Price
---------------- ------------ --------------
<S> <C> <C>
The Bay City Capital Fund I, L.P. 857,143
750 Battery Street, Suite 600 $ 3,000,000.50
San Francisco, CA 94111
The Kaufmann Fund, Inc. 857,143 $ 3,000,000.50
140 E. 45th Street, 43rd Floor
New York, NY 10017
Skyline Venture Partners, L.P. 285,714 $ 999,999.00
525 University Avenue, Suite 701
Palo Alto, CA 94301
--------- --------------
TOTAL: 2,000,000 $ 7,000,000.00
</TABLE>
<PAGE>
EXHIBIT B
LJL BIOSYSTEMS, INC.
COMPLIANCE CERTIFICATE
The undersigned, Lev J. Leytes, hereby certifies as follows:
1. The undersigned is the duly elected President and Chief Executive
Officer of LJL BioSystems, Inc., a Delaware corporation (the "COMPANY").
2. The representations and warranties of the Company set forth in
Section 2 of the Common Stock Purchase Agreement (the "AGREEMENT") dated
January 25, 1999 are true and correct in all material respects as though
made on and as of the date hereof.
3. The Company has performed and complied with all covenants,
agreements, obligations and conditions contained in the Agreement to be
performed by the Company on or prior to the Closing Date.
4. Since the date of the Company's most recent filing with the SEC,
there has not been any material adverse change in the assets, liabilities,
financial condition, or operations of the Company; PROVIDED, HOWEVER, that
changes in the ordinary course of business, including but not limited to the
use of cash and increase in liabilities, shall not be deemed to be a material
adverse change.
The undersigned has executed this Certificate this 27th day of January,
1999.
/s/ Lev J. Leytes
----------------------------------
Lev J. Leytes, President and Chief
Executive Officer
<PAGE>
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
(Included herewith as Exhibit 4.5)
<PAGE>
EXHIBIT D
OPINION OF COMPANY COUNSEL
<PAGE>
[Venture Law Group Letterhead]
January 27, 1999
To the Purchasers Listed on EXHIBIT A to the
LJL BioSystems, Inc. Common Stock
Purchase Agreement
Ladies and Gentlemen:
We have acted as counsel for LJL Biosystems, Inc., a Delaware
corporation (the "COMPANY"), in connection with the sale by the Company to
you of shares of the Company's Common Stock pursuant to the Common Stock
Purchase Agreement dated January 25, 1999 (the "PURCHASE AGREEMENT"), by and
among the Company and the persons listed on EXHIBIT A attached thereto (the
"PURCHASERS"), and the negotiation, execution and delivery by the Company of
the Registration Rights Agreement dated January 27, 1999 (the "REGISTRATION
RIGHTS AGREEMENT") by and among the Company and the Purchasers. This opinion
is given to you in compliance with Section 4.7 of the Purchase Agreement.
The Purchase Agreement and the Registration Rights Agreement are referred to
herein collectively as the "AGREEMENTS." Unless defined herein, capitalized
terms have the meaning given to them in the Agreements.
In rendering this opinion, we have made such legal and factual
examinations and inquiries as we have deemed advisable or necessary for the
purpose of rendering this opinion. In addition, we have examined originals
or copies of documents, corporate records and other writings which we
consider relevant for the purposes of this opinion. In such examination, we
have assumed the genuineness of all signatures on original documents, the
conformity to original documents of all copies submitted to us and the due
execution and delivery of all documents where due execution and delivery are
a prerequisite to the effectiveness thereof. In making our examination of
documents executed by entities other than the Company, we have assumed that
each other entity had the power to enter into and perform all its obligations
thereunder and we also have assumed the due authorization by each such other
entity of all requisite actions and the due execution and delivery of such
documents by each such other entity.
Whenever our opinion herein with respect to the existence or absence of
facts is indicated to be based on our knowledge or belief, it is intended to
signify that in the course of our representation of the Company in connection
with the transactions referred to in the first paragraph hereof, no
information has come to the attention of Mark Weeks, Jason Lemkin or Laurel
Finch (the only lawyers at Venture Law Group working on this transaction)
that would give them actual knowledge of the existence or absence of such
facts. We have not undertaken any independent investigation to determine the
existence or absence of such facts, and no inference as to our knowledge of
the existence or absence of such facts should be drawn from the fact of our
representation of the Company.
In rendering the opinion set forth in paragraph (a) below as to the
existence and good standing of the Company in Delaware, we have relied
exclusively on a certificate of a recent date of public officials of the
State of Delaware.
<PAGE>
January 27, 1999
Page 2
In rendering the opinion expressed in paragraph (g) below, we have
assumed and express no opinion with respect to the following: (i) that the
representations and warranties of the Purchasers set forth in the Agreements
are true and complete; and (ii) that the information provided by the Company
to the Purchasers in connection with such offer and sale is accurate and
complete. We have also assumed the accuracy of, and have relied upon, the
Company's representations to us that the Company has made no offer to sell
the Securities sold by it by means of any "GENERAL SOLICITATION," as defined
in Regulation D under the Securities Act or the "PUBLICATION OF ANY
ADVERTISEMENT" (as defined under the California Corporate Securities Act of
1968, as amended, and the regulations thereunder).
The opinions hereinafter expressed are subject to the following further
qualifications:
(i) Our opinions are qualified by the effect of bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws
relating to or affecting the rights of creditors generally, including,
without limitation, laws relating to fraudulent transfers or conveyances,
preferences and equitable subordination;
(ii) Our opinions are qualified by the limitations imposed by
general principles of equity upon the availability of equitable remedies or
the enforcement of provisions of the Agreements; and the effect of judicial
decisions which have held that certain provisions are unenforceable when
their enforcement would violate the implied covenant of good faith and fair
dealing, or would be commercially unreasonable, or where their breach is not
material;
(iii) We express no opinion as to the enforceability of a
requirement that provisions of the Agreements may only be waived in writing
to the extent an oral agreement has been executed modifying provisions of the
Agreements;
(iv) Our opinion is based upon current statutes, rules,
regulations, cases and official interpretive opinions, and it covers certain
items that are not directly or definitively addressed by such authorities;
(v) We express no opinion as to the effect of judicial
decisions which may permit the introduction of extrinsic evidence to modify
the terms or the interpretation of the Agreements;
(vi) We express no opinion as to the enforceability of
provisions of the Agreements which purport to establish evidentiary standards
or to make determinations conclusive;
(vii) We express no opinion as to the enforceability of
provisions of the Agreements expressly or by implication waiving broadly or
vaguely stated rights, or waiving rights granted by law where such waivers
are against public policy;
(viii) We express no opinion as to the enforceability of
provisions of the Agreements providing that rights or remedies are not
exclusive, that every right or remedy is cumulative, or that the election of
a particular remedy or remedies does not preclude recourse to one or more
other remedies.
<PAGE>
January 27, 1999
Page 3
(ix) We express no opinion as to compliance with applicable
antifraud statutes, rules or regulations of applicable state and federal laws
concerning the issuance or sale of securities; and
(x) We express no opinion as to the enforceability of a
provisions in the Registration Rights Agreement purporting to provide for
indemnification and contribution under certain circumstances may be
unenforceable.
Based upon and subject to the foregoing, we are of the opinion that:
(a) The Company is a corporation duly organized and existing under the
laws of the State of Delaware, and is in good standing under such laws. The
Company has the requisite corporate power to own and operate its properties
and assets, and to carry on its business as presently conducted. The Company
is duly qualified to do business as foreign corporations in each state in
which the failure to be so qualified would have a material adverse effect on
the Company.
(b) The Company has the requisite corporate power to execute and
deliver the Agreements, to sell and issue the Common Stock sold by it
thereunder and to carry out and perform its obligations under the terms of
the Agreements.
(c) All corporate action on the part of the Company, its directors and
stockholders necessary for the authorization, execution, delivery and
performance of the Agreements by the Company, the authorization, sale,
issuance and delivery of the Common Stock and the performance of all of the
Company's obligations under the Agreements has been taken. The Agreements
constitute valid and binding obligations of the Company enforceable in
accordance with their terms. The Common Stock sold by the Company in
conformity with the terms of the Purchase Agreement constitute validly
issued, fully paid and nonassessable securities of the Company.
(d) The execution, delivery and performance of and compliance with the
Agreements, and the issuance of the Common Stock have not resulted and will
not result in any material violation of, or material conflict with, or
constitute a material default under (i) any of the agreements attached as
exhibits to the Company's SEC Documents, (ii) the Company's Certificate of
Incorporation or Bylaws or (iii) any statute, rule or regulation or any
judgment or order known to us to which the Company is a party, or by which
the Company is bound.
(e) To our knowledge, there are no actions, suits, proceedings or
investigations pending against the Company or its properties before any court
or governmental agency that, either in any case or in the aggregate, if
determined adversely to the Company, would result in a material adverse
change in the business or financial condition of the Company or in any
material liability on the part of the Company, and none that questions the
validity of the Agreements or any action taken or to be taken in connection
therewith.
(f) To our knowledge, no material consent, approval or authorization of
or designation, declaration or filing with, any governmental authority on the
part of the Company is required in connection with the valid execution and
delivery of the Agreements, or the offer, sale or issuance of the
<PAGE>
January 27, 1999
Page 4
Common Stock sold by the Company, or the consummation of any other
transaction contemplated by the Agreements, except the filings that are
permitted to be made after the Closing that may be required under state and
federal securities laws and rules of the National Association of Securities
Dealers.
(g) The offer, sale and issuance of the Common Stock in conformity with
the terms of the Purchase Agreement constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act and the
securities laws of the State of California.
We express no opinion as to matters governed by any laws other than the
laws of the State of California, the General Corporation Law of the State of
Delaware and the federal law of the United States of America. We express no
opinion as to whether the laws of any particular jurisdiction apply, and no
opinion to the extent that the laws of any jurisdiction other than those
identified above are applicable to the Agreements or the transactions
contemplated thereby.
This opinion is furnished to you pursuant to Section 4.7 of the Purchase
Agreement and is solely for your benefit and may not be relied on by, nor may
copies be delivered to, any other person without our prior written consent.
We assume no obligation to inform you of any facts, circumstances, events or
changes in the law that may hereafter be brought to our attention that may
alter, affect or modify the opinion expressed herein.
Sincerely,
VENTURE LAW GROUP,
A Professional Corporation
/s/ Venture Law Group
<PAGE>
LJL BIOSYSTEMS, INC.
REGISTRATION RIGHTS AGREEMENT
JANUARY 27, 1999
<PAGE>
LJL BIOSYSTEMS, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made as of the
27th day of January, 1999, by and among LJL BioSystems, Inc., a Delaware
corporation (the "COMPANY") and the investors listed on ATTACHMENT A hereto,
each of which is herein referred to as an "INVESTOR."
RECITALS
The Company and the Investors have entered into a Common Stock Purchase
Agreement (the "PURCHASE AGREEMENT") of even date herewith pursuant to which
the Company has agreed to sell to the Investors and the Investors have agreed
to purchase from the Company shares of the Company's Common Stock.
ALL TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED
IN THE PURCHASE AGREEMENT.
A condition to the Investors' obligations under the Purchase Agreement
is that the Company and the Investors enter into this Agreement in order to
provide the Investors with certain rights to register the Securities acquired
by the Investors subject to the Purchase Agreement. The Company and the
Investors each desire to induce the Investors to purchase the Securities
pursuant to the Purchase Agreement by agreeing to the terms and conditions
set forth herein.
AGREEMENT
The parties hereby agree as follows:
1. REGISTRATION RIGHTS. The Company and the Investors covenant
and agree as follows:
1.1 DEFINITIONS. For purposes of this Section 1 (terms
defined in the singular shall apply to the plural form and vice-versa):
(a) The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities
Act of 1933, as amended (the "ACT"), and the declaration or ordering of
effectiveness of such registration statement or document;
(b) The term "REGISTRABLE SECURITIES" means (i) the
shares of Common Stock issued or sold in connection with the Purchase
Agreement (such shares of Common Stock are collectively referred to
hereinafter as the "SHARES" or "STOCK"), and (ii) any other shares of Common
Stock of the Company issued as (or issuable upon the conversion or exercise
of any warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange for or in replacement of,
the Stock, PROVIDED, that the foregoing
<PAGE>
definition shall exclude in all cases any Registrable Securities sold by a
person in a transaction in which his or her rights under this Agreement are
not assigned. Notwithstanding the foregoing, Common Stock or other
securities shall only be treated as Registrable Securities if and so long as
they have not (A) been sold to or through a broker or dealer or underwriter
in a public distribution or a public securities transaction, or (B) been sold
in a transaction exempt from the registration and prospectus delivery
requirements of the Act under Section 4(1) thereof so that all transfer
restrictions, and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale or (C) with regard to any
individual Holder, become eligible for sale in any three month period
pursuant to Rule 144;
(c) The number of shares of "REGISTRABLE SECURITIES THEN
OUTSTANDING" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities;
(d) The term "HOLDER" means any person owning or having
the right to acquire Registrable Securities or any assignee thereof in
accordance with this Agreement;
(e) The term "FORM S-3" means such form under the Act as
in effect on the date hereof or any successor form under the Act; and
(f) The term "SEC" means the Securities and Exchange
Commission.
1.2 FORM S-3 REGISTRATION. Subject to the terms and
conditions of this Agreement, on or before the date that is six (6) months
following the Closing (the "S-3 DATE"), the Company will file with the SEC a
registration statement on Form S-3 and will use its best efforts to effect
such registration and any related qualification or compliance with respect to
all Registrable Securities owned by the Holders as soon as practicable
thereafter. If the Company does not file with the SEC a registration
statement on Form S-3 by the date that is 30 days after the S-3 Date (the
"S-3 Filing Deadline"), the Company agrees to pay the Purchasers, as
liquidated damages, an amount equal to Two Hundred Fifty Thousand Dollars
($250,000) on the day immediately after the S-3 Filing Deadline, provided
however, that notwithstanding the above, the Company shall not pay any such
damages if the Company defers filing a registration statement on Form S-3
pursuant to subsection 1.2(b)(i) or subsection 1.2(b)(ii) below.
Accordingly, the Company will:
(a) promptly give written notice of the registration,
and any related qualification or compliance, to all Holders;
(b) as soon as practicable, effect such registration and
all such qualifications and compliances as may be necessary and as would
permit or facilitate the sale and distribution of all of the Holders'
Registrable Securities; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance,
pursuant to this Section 1.2 if (i) the Company shall furnish to the Holders
a certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it
2
<PAGE>
would be seriously detrimental to the Company and its stockholders for such
Form S-3 Registration to be effected at such time, in which event the Company
shall have the right to defer the filing of the Form S-3 registration
statement for a reasonable period of time, which shall not exceed thirty (30)
days after the S-3 Filing Deadline, under this Section 1.2 or (ii) if Form
S-3 is not available for such offering by the Holder(s), provided, however,
that if Form S-3 is not available, Company shall file the Form S-3
registration statement once it is available; and
(c) any and all expenses incurred in connection with a
registration requested pursuant to this Section 1.2 shall be borne by the
Company, including all registration, filing, qualification, printers' and
accounting fees but excluding any underwriters' discounts or commissions and
any fees and disbursements of any counsel for the selling Holders (such fees
or discounts, if any, to be borne pro rata by the Holders participating in
the registration).
1.3 OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become effective and to keep
such registration statement effective for a period of three (3) years after
the date on which the registration statement is declared effective or such
shorter period: (i) when all of the Registrable Securities covered by the
registration statement are sold; or (ii) when Rule 144(k) is available to
each of the Investors.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities
owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or blue sky laws of such jurisdictions as shall be reasonably requested by
the Holders, 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.
(e) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto
is required to be delivered under the Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
3
<PAGE>
the statements therein not misleading in the light of the circumstances then
existing. In such circumstance, the Company will use reasonable commercial
efforts to promptly update such prospectus to correct such untrue statement
or disclose the necessary material facts within the period of time the
Company may delay sales under Section 1.4(a)(iii) below.
1.4 RESTRICTIONS ON AND PROCEDURE FOR SALES PURSUANT TO A
REGISTRATION STATEMENT.
(a) Each Holder agrees to the following:
(i) NOTICE TO COMPANY. If any Holder shall propose
to sell any Shares, the Holder shall notify the Company of its intent to do
so on or before one (1) business day prior to the date of such sale (the
"Notice of Sale"), and the provision of the Notice of Sale to the Company
shall conclusively be deemed to establish an agreement by such Holder to
comply with the registration provisions herein described. The Notice of Sale
shall be deemed to constitute a representation that any information
previously supplied by such Holder is accurate as of the date of such Notice
of Sale.
(ii) NOTICE OF SALE. The Notice of Sale in
substantially the form attached as ATTACHMENT B shall be given in accordance
with the provisions of Section 2.5 hereof. However, the Holder may give the
Notice of Sale orally by telephoning the current Chief Financial Officer at
the Company at (408) 448-0542. An oral Notice of Sale shall be deemed to
have been received only at such time as the Selling Holder speaks directly
with the current Chief Financial Officer. In addition, an oral Notice of
Sale shall only be deemed effective if it is followed by a written Notice of
Sale received by the Company by personal delivery or facsimile within
twenty-four (24) hours after giving the oral Notice of Sale.
(iii) DELAY OF SALE. The Company may refuse to
permit the Holder to resell any Shares for a period of time not to exceed
forty five (45) days; provided, however, that in order to exercise this
right, the Company must deliver a certificate in writing to the Holder to the
effect that the registration statement in its then current form contains an
untrue statement of material fact or omits to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. During any suspension period as
contemplated by this Section 1.4 (a)(iii), of which there shall be no more
than three (3) in any twelve (12) month period, the Company will not allow
any of its officers or directors to buy or sell shares of the Company's
securities.
(b) REPRESENTATIONS OF HOLDERS. Each Holder hereby
represents to and covenants with the Company that, during the period in which
any registration statement effected pursuant to Section 1.2 remains
effective, such Holder will:
(i) not engage in any stabilization activity in
connection with any of the Company's securities;
4
<PAGE>
(ii) cause to be furnished to any purchaser of the
Shares and to the broker-dealer, if any, through whom Shares may be offered,
a copy of the Prospectus; and
(iii) not bid for or purchase any securities of the
Company or any rights to acquire the Company's securities, or attempt to
induce any person to purchase any of the Company's securities or any rights
to acquire the Company's securities, in each case, other than as permitted
under the Securities Exchange Act of 1934, as amended ("Exchange Act").
(c) INFORMATION FOR USE IN REGISTRATION STATEMENT. Each
Holder represents and warrants to the Company that such Holder has completed
the information requested by the Selling Holder's Questionnaire attached as
ATTACHMENT C hereto (the "Questionnaire"), and further represents and
warrants to the Company that all information provided by such Holder in the
Questionnaire is true, accurate and complete. Each Holder understands that
the written information in the Questionnaire and all written representations
made in this Agreement are being provided to the Company specifically for use
in, or in connection with, the registration statement and the Prospectus, and
has executed this Agreement with such knowledge.
1.5 FURNISH INFORMATION. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to this Section
1 with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such
Holder's Registrable Securities.
1.6 DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any dispute that might arise with respect to
the interpretation or implementation of this Section 1.
1.7 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, any underwriter (as defined in the
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "VIOLATION"): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii)
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 (iii) any violation or alleged violation by the Company of the
Act, the
5
<PAGE>
Exchange Act, any state securities law or any rule or regulation promulgated
under the Act, the Exchange Act or any state securities law; and the Company
will pay to each such Holder, underwriter or controlling person, as incurred,
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
subsection 1.7(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, claim, damage, liability, or action to the extent that it arises out of
or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company, each of its directors, each of
its officers who has signed the registration statement, each person, if any,
who controls the Company within the meaning of the Act, any underwriter, any
other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of
the foregoing persons may become subject, under the Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such
registration; and each such Holder will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified
pursuant to this subsection 1.7(b), in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this subsection 1.7(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 the Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this subsection 1.7(b)
exceed the net proceeds from the offering received by such Holder, except in
the case of willful fraud by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.7,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the
6
<PAGE>
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 1.7, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 1.7.
(d) If the indemnification provided for in this Section
1.7 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or
expense referred to 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,
liability, claim, damage, 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, liability, claim, damage, or expense as
well as any other relevant equitable considerations; provided, that, in no
event shall any contribution by a Holder under this Subsection 1.7(d) exceed
the net proceeds from the offering received by such Holder, except in the
case of willful fraud by such Holder. 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.
(e) The obligations of the Company and Holders under
this Section 1.7 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1.
1.8 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a
view to making available to the Holders the benefits of Rule 144 and any
other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144, so long as the Company remains
subject to the periodic reporting requirements under Sections 13 or 15(d) of
the Exchange Act;
(b) take such action, including the voluntary
registration of its Common Stock under Section 12 of the Exchange Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable after
the end of the fiscal year in which the first registration statement filed by
the Company for the offering of its securities to the general public is
declared effective;
(c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the Exchange Act;
and
7
<PAGE>
(d) furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of the
Exchange Act and the rules and regulations promulgated thereunder, or that it
qualifies as a registrant whose securities may be resold pursuant to Form
S-3, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
1.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee
or assignee of at least 150,000 shares of such securities, provided the
Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned,
which information shall amend Attachment A hereto; and provided, further,
that such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act. For the purposes of determining the
number of shares of Registrable Securities held by a transferee or assignee,
the holdings of transferees and assignees of a partnership who are partners
or retired partners of such partnership (including spouses and ancestors,
lineal descendants and siblings of such partners or spouses who acquire
Registrable Securities by gift, will or intestate succession) shall be
aggregated together and with the partnership; provided that all assignees and
transferees who would not qualify individually for assignment of registration
rights shall have a single attorney-in-fact for the purpose of exercising any
rights, receiving notices or taking any action under Section 1.
2. MISCELLANEOUS.
2.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
2.2 GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto shall be governed, construed and interpreted in
accordance with the laws of the State of California, without giving effect to
principles of conflicts of laws.
2.3 COUNTERPARTS. This Agreement may be executed in two (2)
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
2.4 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8
<PAGE>
2.5 NOTICES. Unless otherwise provided herein, any notice
required or permitted by this Agreement shall be in writing and shall be
deemed sufficient upon delivery, when delivered personally or by overnight
courier and addressed to a Holder to be notified at such party's address as
set forth on ATTACHMENT A hereto or to the Company at its address on its
signature page hereto, or as subsequently modified by written notice. In the
event that any date provided for in this Agreement falls on a Saturday,
Sunday or legal holiday, such date shall be deemed extended to the next
business day. Notwithstanding the foregoing, any notice delivered pursuant to
Section 1.3(e) or Section 1.4 hereto must be made by personal delivery or
confirmed facsimile transmission.
2.6 EXPENSES. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
2.7 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders
of a majority of the Registrable Securities then outstanding. Any amendment
or waiver effected in accordance with this paragraph shall be binding upon
each holder of any Registrable Securities then outstanding, each future
holder of all such Registrable Securities, and the Company.
2.8 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith. In the event that the
parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (x) such provision shall be excluded from this
Agreement, (y) the balance of the Agreement shall be interpreted as if such
provision were so excluded and (z) the balance of the Agreement shall be
enforceable in accordance with its terms.
2.9 ENTIRE AGREEMENT. This Agreement, and the documents
referred to herein (with the exception of the registration statement)
constitute the entire agreement between the parties hereto pertaining to the
subject matter hereof, and any and all other written or oral agreements
existing between the parties hereto are expressly canceled.
[SIGNATURE PAGES FOLLOW]
9
<PAGE>
The parties have executed this Registration Rights Agreement as of the
date first written above.
COMPANY:
LJL BIOSYSTEMS, INC.
By: /s/ Lev J. Leytes
--------------------------------
Name: Lev J. Leytes
-----------------------
Title: President
-----------------------
Address: 405 Tasman Drive
-----------------------
Sunnyvale, CA 94089
-----------------------
<PAGE>
The parties have executed this Registration Rights Agreement as of the
date first written above.
THE BAY CITY CAPITAL FUND I, L.P.
By: BAY CITY CAPITAL MANAGEMENT LLC
Its: General Partner
By: /s/ Roger H. Salquist
--------------------------------
Name: Roger H. Salquist
-----------------------
Title: Managing Partner
-----------------------
<PAGE>
The parties have executed this Registration Rights Agreement as of the
date first written above.
SKYLINE VENTURE PARTNERS, L.P.
By: Skyline Venture Management LLC
Its: General Partner
By: /s/ John Freund
--------------------------------
John Freund
Managing Director
2
<PAGE>
The parties have executed this Registration Rights Agreement as of the
date first written above.
THE KAUFMANN FUND, INC.
By: /s/ Hans P. Utsch
--------------------------------
Hans P. Utsch
President
3
<PAGE>
ATTACHMENT A
INVESTORS
<TABLE>
<CAPTION>
No. of Shares
Name/Address of Common Stock
- ------------ ---------------
<S> <C>
The Bay City Capital Fund I, L.P. 857,143
750 Battery Street, Suite 600
San Francisco, CA 94111
The Kaufmann Fund, Inc. 857,143
140 E. 45th Street, 43rd Floor
New York, NY 10017
Skyline Venture Partners, L.P. 285,714
525 University Avenue, Suite 701
Palo Alto, CA 94301
</TABLE>
<PAGE>
ATTACHMENT B
LJL BIOSYSTEMS, INC.
NOTICE OF SALE
Pursuant to the Registration Rights Agreement dated as of __________,
1999 among LJL BioSystems, Inc. (the "Company"), the undersigned and certain
stockholders of the Company, the undersigned hereby gives notice to the
Company of the undersigned's intent to sell _______ shares of the Company's
Common Stock registered pursuant to the registration statement on
(File No.__________).
Dated: ______________, 199__ By:___________________________________
(signature)
Name:_________________________________
(print)
Title:________________________________
(if applicable)
[NOTE: THIS NOTICE OF SALE MUST BE COMPLETED AND DELIVERED (VIA PERSONAL
DELIVERY OR FACSIMILE) TO THE CHIEF FINANCIAL OFFICER OF THE COMPANY ON OR
BEFORE ONE (1) BUSINESS DAY BEFORE THE DATE OF SALE OF THE SHARES OF THE
COMPANY'S COMMON STOCK REGISTERED PURSUANT TO THE REGISTRATION STATEMENT.]
<PAGE>
ATTACHMENT C
LJL BIOSYSTEMS, INC.
SELLING STOCKHOLDER'S QUESTIONNAIRE
In connection with the LJL BioSystems, Inc. (the "Company") Registration
Statement (File No.__________) registering certain shares of the Company's
Common Stock, the undersigned represents and warrants that the information
set forth below is true, accurate and complete:
1. As of the date hereof, the undersigned beneficially owns ______
shares of the Company's Common Stock.
2. Except as described below, the undersigned has not had a material
relationship with the Company or any of its predecessors or affiliates within
the last three years.
The term "material relationship" has not been defined by the Securities
and Exchange Commission (the "SEC"). However, the SEC has indicated that it
will probably construe as a "material relationship" any relationship which
tends to prevent arms length bargaining in dealings with a company, whether
arising from a close business connection or family relationship, a
relationship of control or otherwise. It seems prudent, therefore, to
consider that the undersigned would have such a relationship, for example,
with any organization of which the undersigned is an officer, director,
trustee or partner or in which the undersigned owns, directly or indirectly,
ten percent (10%) or more of the outstanding voting stock, or in which the
undersigned has some other substantial interest, and with any person or
organization with whom the undersigned has, or with whom any relative or
spouse (or any other person or organization as to which the undersigned has
any of the foregoing other relationships) has, a contractual relationship.
If applicable, please describe the material relationship with the Company:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Holder
_______________________________________
Name: _________________________________
Title:_________________________________
<PAGE>
FOR IMMEDIATE RELEASE
CONTACTS:
LJL BIOSYSTEMS, INC.: MEDIA RELATIONS: INVESTOR RELATIONS:
Larry Tannenbaum Friestedt International Financial Relations
CFO and Senior Vice President Susanne Friestedt Board
(408) 548-0542 (619) 223-8844
[email protected] [email protected] Lise Needham (general
info)
Kate Rajeck (analyst
contact)
Scott Marx (media)
(415) 986-1591
[email protected]
LJL BIOSYSTEMS RAISES $7.0 MILLION PRIVATE PLACEMENT
JOHN DIEKMAN, PH.D., JOINS BOARD OF DIRECTORS
SUNNYVALE, CA, JANUARY 27, 1999 -- LJL BioSystems, Inc. (Nasdaq: LJLB), a
leading manufacturer of High Throughput Screening (HTS) products for
accelerated drug discovery today announced it raised $7 million in a private
placement of 2 million shares of unregistered Common Stock.
Bay City Capital, a leading investor in the life sciences industry and The
Kaufmann Fund, an emerging growth company mutual fund co-lead this
investment. As part of this transaction, John Diekman, a Managing Director of
Bay City Capital, will join LJL's Board of Directors.
"Bay City and the Kaufmann Fund are well respected institutional investors in
healthcare today. We look forward to their contributions as we continue to
build value for LJL shareholders. The capital infusion from this financing
will support an expanded effort to grow LJL's installed base of HTS systems
at pharmaceutical and biotechnology companies around the world. The new
funding will also help us accelerate development and commercialization of new
consumable products, such as assay kits, plates, and reagents, an important
element of our business strategy," said Lev Leytes, LJL's President and Chief
Executive Officer.
"The addition of John Diekman to our Board of Directors provides us with
tremendous industry experience. John has worked closely with global
pharmaceutical leaders to commercialize technologies that are transforming
the industry. Furthermore, John has extensive experience in drug discovery
as well as in directing the strategic growth of several successful
companies," Leytes added.
Dr. Diekman has more than 20 years of experience in drug discovery and
pharmaceutical organizations including roles as CEO or President at
Affymetrix, Affymax, Monoclonal Antibodies, Salutar and Zoecon. He is
currently a director of several public and private companies and is on the
Board of Trustees of the Scripps Research Institute in La Jolla.
<PAGE>
"As Bay City Capital worked with LJL to put this transaction together, we
became convinced that LJL is implementing an intelligent and powerful
approach to a truly significant market opportunity," said Diekman. " We look
forward to contributing as an investor and board member to LJL's success."
Skip Klein, health care analyst for The Kaufmann Fund said, "The potential in
the High Throughput Screening market is significant as the explosion brought
on by genomics and combinatorial chemistry makes HTS crucial to every
pharmaceutical and biotechnology company. I first heard about LJL from
satisfied customers as well as from competitors. LJL's customers are excited
and supportive of their distributive approach to HTS. I believe they have a
great opportunity as their installed equipment base grows and they further
expand their consumables offering. Clearly, the gold rush is on, and LJL is
in an unique provider of picks and shovels."
The securities sold in this private placement have not been registered in the
United States under the Securities Act of 1933. The company will register the
shares at a future date. The company offered the shares directly to
investors and used Hambrecht & Quist as its financial advisor. LJL now has
approximately 12.5 million shares of Common Stock outstanding.
