<PAGE>
As filed with the Securities and Exchange Commission on December 23, 1997.
Registration No. 333-41151
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
GALAGEN INC.
(Exact name of the Registrant as specified in its charter)
Delaware 41-1719104
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4001 Lexington Avenue North
Arden Hills, Minnesota 55126
(612) 481-2105
(Address and telephone number of the Registrant's
principal executive offices)
Robert A. Hoerr
President and Chief Executive Officer
GalaGen Inc.
4001 Lexington Avenue North
Arden Hills, Minnesota 55126
(612) 481-2105
(Name, address and telephone number of agent for service)
-----------------------------
copy to:
Kris Sharpe
Faegre & Benson LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
-----------------------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of earlier
effective registration statement for the same offering. / /
-------------------
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
------------------------------------------
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
AMOUNT TO PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES BE MAXIMUM OFFERING AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PRICE PER SHARE(2) PRICE(2) FEE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 140,000 $1.875 $262,500 $77.44
Shares
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These shares are in addition to the 1,129,062 shares covered by this
Registration Statement as originally filed. The filing fee for such
1,129,062 shares was paid at the time of the original filing.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
-----------------------------
The Registrant Hereby Amends This Registration Statement On Such Date
Or Dates As May Be Necessary To Delay Its Effective Date Until The Registrant
Shall File A Further Amendment Which Specifically States That This Registration
Statement Shall Thereafter Become Effective In Accordance With Section 8(A) Of
The Securities Act Of 1933 Or Until The Registration Statement Shall Become
Effective On Such Date As The Commission, Acting Pursuant To Said Section 8(A),
May Determine.
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 23, 1997
1,269,062 SHARES
GALAGEN INC.
COMMON STOCK
This Prospectus relates to shares of Common Stock of GalaGen Inc.
(the "Company") that may be sold by the Selling Stockholders. See "Selling
Stockholders." These shares may be obtained by the Selling Stockholders
through the conversion of the Company's 6% Convertible Debentures due May 18,
1999 (the "Debentures") or the exercise of related Stock Purchase Warrants
and finders Stock Purchase Warrants (the "Warrants"), which Debentures and
Warrants were purchased or issued pursuant to or in connection with the 6%
Convertible Debenture Purchase Agreement dated November 18, 1997 (the
"Purchase Agreement"). The Company will not receive any of the proceeds from
the sale of shares by the Selling Stockholders.
The Company's Common Stock is traded on the Nasdaq National Market
under the symbol "GGEN." On December 19, 1997, the last sale price for the
Common Stock, as reported on the Nasdaq National Market was $1.625 per share.
See "Price Range of Common Stock and Dividend Policy."
The distribution of the shares of Common Stock offered hereby by the
Selling Stockholders may be effected from time to time (but no later than
December 29, 1999) in one or more transactions on the Nasdaq National Market or
otherwise, in negotiated transactions, through the writing of options on shares
(whether the options are listed on an options exchange or otherwise), or a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. Such shares may also be sold pursuant to Rule 144 adopted under the
Securities Act of 1933, as amended (the "Securities Act"), at such times as such
sales are permitted pursuant to such Rule. The Selling Stockholders may effect
such transactions by selling shares to or through broker-dealers, and these
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders and/or purchasers of
shares for whom they may act as agent (which compensation may be in excess of
customary commissions). See "Plan of Distribution."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus in connection with the offer made by this Prospectus, and, if given
or made, such information or representations must not be relied upon as having
been authorized. This Prospectus does not constitute an offer or solicitation
by anyone in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation. The delivery of this Prospectus at any time shall not
under any circumstances create an implication that there has been no change in
the affairs of the Company since the date hereof.
The Date Of This Prospectus Is December 29, 1997
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at the Commission's regional offices at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade
Center, New York, New York 10048. Copies of such material may be obtained at
prescribed rates from the public reference facilities of the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549. The Commission maintains
a Web site that contains reports, proxy statements and other information filed
by the Company at: http://www.sec.gov.
This Prospectus constitutes a part of a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus omits certain of the information contained in
the Registration Statement, and reference is hereby made to the Registration
Statement for further information with respect to the Company, and the Common
Stock offered hereby. Any statements contained herein concerning the provisions
of any document are not necessarily complete, and, in each instance, reference
is made to the copy of the document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File
No. 0-27976) pursuant to the Exchange Act are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (which incorporates by reference certain portions of the
Company's definitive proxy statement for the Company's 1997 Annual Meeting
of Stockholders);
(ii) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, June 30 and September 30, 1997;
(iii) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission on
March 13, 1996;
(iv) all other documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of an offering of the
shares of Common Stock offered hereby by the Selling Stockholders.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in any other subsequently filed document that also is or is deemed to be
incorporated herein or in an accompanying Prospectus Supplement by reference)
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part hereof or an accompanying
Prospectus Supplement except as so modified or superseded.
The Company will provide without charge to each person, including any
beneficial holder, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated herein by reference (other than exhibits to
such documents, unless those exhibits are specifically incorporated therein by
reference). Requests should be directed to GalaGen Inc., 4001 Lexington Avenue
North, Arden Hills, Minnesota 55126, Attn: Secretary, telephone (612) 481-2169.
2
<PAGE>
THE COMPANY
The Company is developing a portfolio of oral pharmaceutical products
that target life threatening and emerging pathogens. The Company currently has
three pharmaceutical polyclonal antibody products in development. Diffistat-G
is being developed for the treatment and prevention of antibiotic-associated
diarrhea. Candistat-G-TM- is an oral antibody product in early clinical
development for the treatment of thrush or infection of the throat and oral
cavity with the fungus Candida. PylorImune-G-TM- is in preclinical development
with the Company's corporate partner, Chiron Corporation. The Company is
utilizing its pharmaceutical and nutritional expertise to develop a portfolio of
proprietary dietary supplements and medical foods.
The Company is a Delaware corporation formed in 1992. Its executive
offices are located at 4001 Lexington Avenue North, Arden Hills, Minnesota
55126, and its telephone number is (612) 481-2105.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Company's Common Stock has traded on the Nasdaq National Market
under the symbol GGEN since the Company's initial public offering in March 1996.
The following table sets forth, for the periods indicated, the reported high and
low sale prices of the Common Stock on the Nasdaq National Market for the
periods indicated, as reported by the Nasdaq National Market.
HIGH LOW
---- ---
1996:
First Quarter (from March 27, 1996) . . . . . . $ 10.750 $ 10.000
Second Quarter. . . . . . . . . . . . . . . . . 10.375 7.125
Third Quarter . . . . . . . . . . . . . . . . . 7.500 3.813
Fourth Quarter. . . . . . . . . . . . . . . . . 6.125 4.000
1997:
First Quarter . . . . . . . . . . . . . . . . . $ 4.625 $ 1.750
Second Quarter. . . . . . . . . . . . . . . . . 3.250 2.000
Third Quarter . . . . . . . . . . . . . . . . . 2.750 2.000
Fourth Quarter (through December 19, 1997). . . 2.375 1.500
The Company has never declared or paid any cash dividends on its
Common Stock. The Company currently intends to retain earnings, if any, to
finance future growth and therefore does not anticipate paying any cash
dividends in the foreseeable future.
3
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock as of November 19, 1997 and
as adjusted to reflect the sale of shares offered by this Prospectus by each
Selling Stockholder (percentages are based on 7,229,965 shares outstanding on
November 18, 1997).
<TABLE>
<CAPTION>
SHARES OWNED SHARES OWNED
PRIOR TO OFFERING AFTER OFFERING(3)
---------------------- ---------------------
PERCENT OF SHARES PERCENT OF
NAME NUMBER OUTSTANDING OFFERED NUMBER OUTSTANDING
- ------------------------ ------- ----------- ------- ------ -----------
<S> <C> <C> <C> <C> <C>
CPR (USA) Inc.(1) 379,683 4.989 379,683 0 -
Libertyview Plus Fund(1) 147,879 2.002 147,879 0 -
Libertyview Fund, LLC(1) 36,969 * 36,969 0 -
CLARCO Holdings(2) 140,000 1.900 140,000 0 -
</TABLE>
- -------------------
* Less than 1%.
(1) Assumes full conversion of the Debentures held by the Selling Stockholders,
at the Conversion Price set forth in the Purchase Agreement (82 1/2% of the
lowest sale price of the Company's Common Stock on the Nasdaq National
Market during the three trading days of November 14, 17 and 18, 1997), and
subject to the limitation in the Purchase Agreement that no holder of a
Debenture can convert such Debenture to the extent such holder would be
deemed to beneficially own 4.99% or more of the then issued and outstanding
Common Stock. Also assumes full exercise of the Warrants held by the
Selling Stockholders.
(2) All such shares are covered by Placement Agent Warrants issued as of
December 1, 1997.
(3) Assumes sale of all shares beneficially owned by the Selling Stockholders.
PLAN OF DISTRIBUTION
The distribution of the shares of Common Stock offered hereby by the
Selling Stockholders may be effected from time to time (but no later than
December 29, 1999) in one or more transactions on the Nasdaq National Market or
otherwise, in the over-the-counter market, in negotiated transactions, through
the writing of options on shares (whether the options are listed on an options
exchange or otherwise), or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. Such shares may also be sold pursuant to
Rule 144 adopted under the Securities Act at such times as such sales are
permitted pursuant to such Rule. The Selling Stockholders may effect such
transactions by selling shares to or through broker-dealers, and these
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders and/or purchasers of
shares for whom they may act as agent (which compensation may be in excess of
customary commissions). The Selling Stockholders and broker-dealers that
participate with the Selling Stockholders in the distribution of shares may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of shares may be deemed to be underwriting compensation.
LEGAL OPINIONS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Faegre & Benson LLP, 2200 Norwest Center,
Minneapolis, Minnesota 55402.
4
<PAGE>
EXPERTS
The financial statements of GalaGen Inc. appearing in GalaGen Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1996, have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting
and auditing.
5
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses Of Issuance And Distribution
Expenses in connection with the issuance and distribution of the
shares of Common Stock being registered hereunder other than underwriting
commissions and expenses, are estimated below.
SEC registration fee. . . . . . . . . $ 847
Nasdaq listing fee. . . . . . . . . . 17,500
Legal services and expenses . . . . . 7,500
Accounting services and expenses. . . 1,000
Printing fees . . . . . . . . . . . . 500
Miscellaneous . . . . . . . . . . . . 653
----------
Total . . . . . . . . . . . $ 28,000
-----------
-----------
Except for the SEC registration fee and the Nasdaq listing fee, all of
the foregoing expenses have been estimated. The Selling Stockholders will bear
fees and disbursements of their own legal counsel and transfer taxes. The
Company will bear all other expenses.
Item 15. Indemnification Of Directors And Officers
Under Delaware law, a corporation may indemnify any person who was or
is a party or is threatened to be made a party to an action (other than an
action by or in the right of the corporation) by reason of his or her services
as a director or officer of the corporation, or his or her service, at the
corporation's request, as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees)
that are actually and reasonably incurred by him or her ("Expenses"), and
judgments, fines and amounts paid in settlement that are actually and reasonably
incurred by him or her, in connection with the defense or settlement of such
action, provided that he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the corporation's best interests,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe that his or her conduct was unlawful. Although Delaware law permits
a corporation to indemnify any person referred to above against Expenses in
connection with the defense or settlement of an action by or in the right of the
corporation, provided that he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the corporation's best
interests, if such person has been judged liable to the corporation,
indemnification is only permitted to the extent that the Court of Chancery (or
the court in which the action was brought) determines that, despite the
adjudication of liability, such person is entitled to indemnity for such
Expenses as the court deems proper. The General Corporation Law of the State of
Delaware also provides for mandatory indemnification of any director, officer,
employee or agent against Expenses to the extent such person has been successful
in any proceeding covered by the statute. In addition, the General Corporation
Law of the State of Delaware provides for the general authorization of
advancement of a director's or officer's litigation Expenses in lieu of
requiring the authorization of such advancement by the board of directors in
specific cases, and that indemnification and advancement of Expenses provided by
the statute shall not be deemed exclusive of any other rights to which those
seeking indemnification of Expenses may be entitled under any bylaw, agreement
or otherwise.
The Restated Certificate of Incorporation of the Company eliminates
the personal liability of a director to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except under
certain circumstances involving certain wrongful acts such as breach of a
director's duty of loyalty, acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, for any unlawful acts
under Section 174 of the General Corporation Law of the State of Delaware, or
for any transaction from which a director derives an improper personal benefit.
The Company's Restated Certificate of Incorporation
<PAGE>
and Restated Bylaws provide for the broad indemnification of the directors and
officers of the Company and for advancement of litigation expenses to the
fullest extent required or permitted by current Delaware law.
Item 16. Exhibits
Exhibit
Number
------
4.1 Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1996 (File No. 0-27976)).
4.2 Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.4 to the Company's Registration Statement on Form S-1
(Registration No. 333-1032)).
4.3 Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form S-1
(Registration No. 333-1032)).
4.4 6% Convertible Debenture Purchase Agreement dated November 18,
1997 among the Company and the Purchasers named therein.*
4.5 Registration Rights Agreement dated November 18, 1997 among the
Company and the Holders named therein.*
4.6 6% Convertible Debenture due May 18, 1999 issued to CPR (USA)
Inc. dated November 18, 1997.*
4.7 6% Convertible Debenture due May 18, 1999 issued to Libertyview
Plus Fund dated November 18, 1997.*
4.8 6% Convertible Debenture due May 18, 1999 issued to Libertyview
Fund, LLC dated November 18, 1997.*
4.9 Stock Purchase Warrant issued to CPR (USA) Inc. dated
November 18, 1997.*
4.10 Stock Purchase Warrant issued to Libertyview Plus Fund dated
November 18, 1997.*
4.11 Stock Purchase Warrant issued to Libertyview Fund, LLC dated
November 18, 1997.*
4.12 Warrant issued to CLARCO Holdings dated as of December 1, 1997.
4.13 Warrant issued to CLARCO Holdings dated as of December 1, 1997.
4.14 Warrant issued to CLARCO Holdings dated as of December 1, 1997.
5 Opinion of Faegre & Benson LLP.
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of Faegre & Benson LLP (included in Exhibit 5).
24 Powers of Attorney of directors and officers of the Company.*
- -----------------
* Filed as part of the initial filing.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933, (ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement PROVIDED, HOWEVER, that paragraphs (1)(i) and
(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Company pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial BONA FIDE offering thereof.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be
deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
undersigned Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Arden
Hills, State of Minnesota, on December 23, 1997.
GALAGEN INC.
(Registrant)
By ROBERT A HOERR*
-------------------------------------------
Robert A. Hoerr, M.D., Ph.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the Registration Statement has been signed on December 23, 1997
by the following persons in the capacities indicated:
ROBERT A HOERR* President and Chief Executive Officer
- --------------------------- (Principal Executive Officer)
Robert A. Hoerr
/s/ GREGG A. WALDON Vice President, Chief Financial Officer,
- --------------------------- Secretary and Treasurer (Principal Financial
Gregg A. Waldon and Accounting Officer)
STANLEY FALKOW, PH.D. )
ROBERT A. HOERR, M.D., PH.D. )
RONALD O. OSTBY ) A majority of the Board of Directors*
R. DAVID SPRENG )
- -----------------------------
* Gregg A. Waldon, by signing his name hereto, does hereby sign this document
on behalf off each of the above-named officers or directors pursuant to
powers of attorney duly executed by such persons.
/s/ GREGG A. WALDON
--------------------------------------------
Gregg A. Waldon
ATTORNEY-IN-FACT
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page
- ------- ----------- ----
<S> <C> <C>
4.1 Restated Certificate of Incorporation of the Company (incorporated
by reference to Exhibit 3.2 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1996 (File
No. 0-27976)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incorporated By Reference
4.2 Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.4 to the Company's Registration Statement on Form S-1
(Registration No. 333-1032)). . . . . . . . . . . . . . . . . . . . . . . Incorporated By Reference
4.3 Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form S-1
(Registration No. 333-1032)). . . . . . . . . . . . . . . . . . . . . . . Incorporated By Reference
4.4 6% Convertible Debenture Purchase Agreement dated November 18,
1997 among the Company and the Purchasers named therein . . . . . . . . . *
4.5 Registration Rights Agreement dated November 18, 1997 among the
Company and the Holders named therein . . . . . . . . . . . . . . . . . . *
4.6 6% Convertible Debenture due May 18, 1999 issued to CPR (USA) Inc.
dated November 18, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . *
4.7 6% Convertible Debenture due May 18, 1999 issued to Libertyview
Plus Fund dated November 18, 1997 . . . . . . . . . . . . . . . . . . . . *
4.8 6% Convertible Debenture due May 18, 1999 issued to Libertyview
Fund, LLC dated November 18, 1997 . . . . . . . . . . . . . . . . . . . . *
4.9 Stock Purchase Warrant issued to CPR (USA) Inc. dated November
18, 1997. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
4.10 Stock Purchase Warrant issued to Libertyview Plus Fund dated
November 18, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
4.11 Stock Purchase Warrant issued to Libertyview Fund, LLC dated
November 18, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
4.12 Warrant issued to CLARCO Holdings dated as of December 1, 1997. . . . . . Filed Electronically
4.13 Warrant issued to CLARCO Holdings dated as of December 1, 1997. . . . . . Filed Electronically
4.14 Warrant issued to CLARCO Holdings dated as of December 1, 1997. . . . . . Filed Electronically
5 Opinion of Faegre & Benson LLP. . . . . . . . . . . . . . . . . . . . . . Filed Electronically
23.1 Consent of Ernst & Young LLP. . . . . . . . . . . . . . . . . . . . . . . *
23.2 Consent of Faegre & Benson LLP (included in Exhibit 5). . . . . . . . . . Filed Electronically
24 Powers of Attorney of directors and officers of the Company . . . . . . . *
</TABLE>
- --------------
* Filed as part of the initial filing.
<PAGE>
EXHIBIT 4.12
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
GALAGEN INC.
THIS WARRANT CERTIFIES THAT, for value received, CLARCO Holdings
(herein called "Purchaser") or registered assigns is entitled to subscribe for
and purchase from GalaGen Inc. (herein called the "Company"), a corporation
organized and existing under the laws of the State of Delaware, at the price
specified below (subject to adjustment as noted below) at any time from and
after December 1, 1997 to and including December 1, 2002, Twenty-Five Thousand
(25,000) fully paid and nonassessable shares of the Company's Common Stock, $.01
par value per share ("Common Stock") (subject to adjustment as noted below).
The warrant purchase price shall be $2.50 per share (subject to
adjustment as noted below).
This Warrant is subject to the following provisions, terms and
conditions:
1. The rights represented by this Warrant may be exercised by the
holder hereof, in whole or in part, by written notice of exercise, in the form
attached hereto, delivered to the Company ten days prior to the intended date of
exercise and by the surrender of this Warrant (properly endorsed if required) at
the principal office of the Company and upon payment to it by check of the
purchase price in lawful money of the United States. The Company agrees that
the shares so purchased shall be and are deemed to be issued to the holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such
shares as aforesaid. Subject to the provisions of the next succeeding
paragraph, certificates for the shares of stock so purchased shall be delivered
to the holder hereof within a reasonable time, not exceeding l0 days, after the
rights represented by this Warrant shall have been so exercised, and, unless
this Warrant has expired, a new Warrant representing the number of shares, if
any, with respect to which this Warrant shall not then have been exercised shall
also be delivered to the holder hereof within such time.
2. Notwithstanding the foregoing, however, the Company shall not be
required to deliver any certificate for shares of stock upon exercise of this
Warrant except in accordance with the provisions, and subject to the
limitations, of paragraph 7 hereof and the restrictive legend under the heading
"Restriction on Transfer" below.
3. The Company covenants and agrees that all shares which may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be duly authorized and issued, fully paid and nonassessable. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be
<PAGE>
exercised, the Company will at all times have authorized, and reserved for the
purpose of issue or transfer upon exercise of the subscription rights evidenced
by this Warrant, a sufficient number of shares of its Common Stock to provide
for the exercise of the rights represented by this Warrant.
4. The above provisions are, however, subject to the following:
(a) The warrant purchase price shall, from and after the date of
issuance of this Warrant, be subject to adjustment from time to time as
hereinafter provided. Upon each adjustment of the warrant purchase price, the
holder of this Warrant shall thereafter be entitled to purchase, at the warrant
purchase price resulting from such adjustment, the number of shares obtained by
multiplying the warrant purchase price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately prior
to such adjustment and dividing the product thereof by the warrant purchase
price resulting from such adjustment.
(b) In case the Company shall (i) declare a dividend upon the Common
Stock payable in Common Stock (other than a dividend declared to effect a
subdivision of the outstanding shares of Common Stock, as described in
paragraph (c) below) or any obligations or any shares of stock of the Company
which are convertible into or exchangeable for Common Stock (any of such
obligations or shares of stock being hereinafter called "Convertible
Securities"), or in any rights or options to purchase Common Stock or
Convertible Securities, or (ii) declare any other dividend or make any other
distribution upon the Common Stock payable otherwise than out of earnings or
earned surplus, then thereafter the holder of this Warrant upon the exercise
hereof will be entitled to receive the number of shares of Common Stock to which
such holder shall be entitled upon such exercise, and, in addition and without
further payment therefor, each dividend described in clause (i) above and each
dividend or distribution described in clause (ii) above which such holder would
have received by way of dividends or distributions if continuously since such
holder became the record holder of this Warrant such holder (x) had been the
record holder of the number of shares of Common Stock then received, and (y) had
retained all dividends or distributions in stock or securities (including Common
Stock or Convertible Securities, and any rights or options to purchase any
Common Stock or Convertible Securities) payable in respect of such Common Stock
or in respect of any stock or securities paid as dividends or distributions and
originating directly or indirectly from such Common Stock. For the purposes of
the foregoing, a dividend or distribution other than in cash shall be considered
payable out of earnings or earned surplus only to the extent that such earnings
or earned surplus are charged an amount equal to the fair value of such dividend
or distribution as determined by the Board of Directors of the Company.
(c) In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the warrant purchase
price in effect immediately prior to such subdivision shall be proportionately
reduced, and conversely, in
-2-
<PAGE>
case the outstanding shares of Common Stock of the Company shall be combined
into a smaller number of shares, the warrant purchase price in effect
immediately prior to such combination shall be proportionately increased.
(d) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another
corporation, or sale of all or substantially all of its assets to another
corporation (any such reorganization, reclassification, consolidation, merger or
sale being hereinafter called an "Event") shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for Common Stock, then, unless lawful and
adequate provision shall have been made whereby the holder hereof shall
thereafter have the right to purchase and receive, upon the basis and upon the
terms and conditions specified in this Warrant and in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for a number of outstanding shares of Common Stock of the Company equal to the
number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby had the Event not
taken place, the Board of Directors of the Company shall declare, at least
twenty days prior to the actual effective date of the Event, and provide written
notice to the holder hereof of the declaration, that this Warrant shall be
canceled at the time of, or immediately prior to the occurrence of, the Event
(unless it shall have been exercised prior to the occurrence of the Event) in
exchange for payment to the holder hereof, within twenty days after the Event,
of cash equal to the amount (if any), for each share of Common Stock issuable
upon exercise of this Warrant, by which the Event Proceeds per share of Common
Stock (as hereinafter defined) exceeds the purchase price per share of Common
Stock under this Warrant. In the event of a declaration pursuant to this
paragraph (d), this Warrant, if not exercised prior to the Event, shall be
canceled at the time of, or immediately prior to, the Event, as provided in the
declaration, subject to the payment obligations of the Company provided in this
paragraph (d). For purposes of this paragraph (d), "Event Proceeds per share of
Common Stock" shall mean the cash plus the fair market value, as determined in
good faith by the Board of Directors of the Company, of the non-cash
consideration to be received per share of Common Stock by the shareholders of
the Company upon the occurrence of the Event. If provision shall be made,
pursuant to this paragraph (d), for the right of the holder hereof to purchase
and receive stock, securities or assets of any successor corporation (other than
the Company) upon the occurrence of any Event, then such successor corporation
shall assume, by written instrument executed and mailed to the registered holder
hereof at the last address of such holder appearing on the books of the Company,
the obligation to deliver to such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to purchase.
(e) Upon any adjustment of the warrant purchase price, then and in
each such case the Company shall give written notice thereof, by first-class
mail, postage prepaid, addressed to the registered holder of this Warrant at the
address of such holder as shown on
-3-
<PAGE>
the books of the Company, which notice shall state the warrant purchase price
resulting from such adjustment and the increase or decrease, if any, in the
number of shares purchasable at such price upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.
(f) In case any time:
(1) the Company shall declare any cash dividend on Common Stock at a
rate in excess of the rate of the last cash dividend theretofore paid;
(2) the Company shall pay any dividend payable in stock upon Common
Stock or make any distribution (other than regular cash dividends) to the
holders of Common Stock;
(3) the Company shall offer for subscription pro rata to the holders
of Common Stock any additional shares of stock of any class or other
rights;
(4) there shall be any capital reorganization, or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another
corporation; or
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give written notice,
by first-class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company, of
the date on which (aa) the books of the Company shall close or a record shall be
taken for such dividend, distribution or subscription rights, or (bb) such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up shall take place, as the case may be. Such notice
shall also specify the date as of which the holders of Common Stock of record
shall participate in such dividend, distribution or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be. Such
written notice shall be given at least 20 days prior to the action in question
and not less than 20 days prior to the record date or the date on which the
Company's transfer books are closed in respect thereto.
(g) If any event occurs as to which in the opinion of the Board of
Directors of the Company the other provisions of this paragraph 4 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the holder of this Warrant or of Common Stock in accordance
with the essential intent and principles of such provisions, then the Board of
Directors shall make an adjustment in the application of such provisions, in
accordance with such essential intent and principles, so as to protect such
purchase rights as
-4-
<PAGE>
aforesaid; provided, however, that the members of the Board of Directors of the
Company shall not be liable to the holders hereof for any such determination
made in good faith.
(h) No fractional shares of Common Stock shall be issued upon the
exercise of this Warrant, but, instead of any fraction of a share which would
otherwise be issuable, the Company shall pay a cash adjustment (which may be
effected as a reduction of the amount to be paid by the holder hereof upon such
exercise) in respect of such fraction in an amount equal to the same fraction of
the market price per share of Common Stock as of the close of business on the
date preceding the written notice of exercise required by paragraph 1 above.
"Market price" for purposes of this paragraph 4(h) shall mean, if the Common
Stock is traded on a securities exchange or on The Nasdaq National Market, the
closing price of the Common Stock on such exchange or The Nasdaq National
Market, or, if the Common Stock is otherwise traded in the over-the-counter
market, the closing bid price, in each case averaged over a period of 20
consecutive business days prior to the date as of which "market price" is being
determined. If at any time the Common Stock is not traded on an exchange or The
Nasdaq National Market, or otherwise traded in the over-the-counter market, the
"market price" shall be deemed to be the higher of (i) the book value thereof as
determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company as of the last day of any
month ending within 60 days preceding the date as of which the determination is
to be made, or (ii) the fair value thereof determined in good faith by the Board
of Directors of the Company as of a date which is within l5 days of the date as
of which the determination is to be made.
5. As used herein, the term "Common Stock" shall mean and include
the Company's presently authorized Common Stock and shall also include any
capital stock of any class of the Company hereafter authorized which shall not
be limited to a fixed sum or percentage in respect of the rights of the holders
thereof to participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company;
provided that the shares purchasable pursuant to this Warrant shall include
shares designated as Common Stock of the Company on the date of original issue
of this Warrant or, in the case of any reclassification of the outstanding
shares thereof, the stock, securities or assets provided for in paragraph 4(d)
above.
6. This Warrant shall not entitle the holder hereof to any voting
rights or other rights as a stockholder of the Company.
7.(a) The holder of this Warrant acknowledges that neither this
Warrant nor any of the shares of Common Stock issuable upon exercise hereof have
been registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and that this Warrant or such shares of Common Stock may
only be transferred in accordance with this paragraph 7. The holder of this
Warrant, by acceptance hereof, represents that it has acquired this Warrant for
investment and not with a view to distribution of this Warrant or the shares of
-5-
<PAGE>
Common Stock issuable upon exercise hereof within the meaning of the Act and
the rules and regulations thereunder.
(b) The Purchaser realizes that the purchase of this Warrant is a
speculative investment, and that the economic benefits which may be derived
therefrom are uncertain. In determining whether or not to purchase the Warrant,
the Purchaser has relied solely upon the publicly-available materials filed by
the Company with the Securities and Exchange Commission, copies of which have
been reviewed by the Purchaser, and upon independent investigations made by the
Purchaser and its representatives.
(c) The Purchaser represents to the Company that it is an "accredited
investor" as defined in Rule 501(a) of Regulation D promulgated under the Act,
by virtue of being (i) a corporation not formed for the specific purpose of
acquiring this Warrant with total assets in excess of $5,000,000 or (ii) an
entity in which all of the equity owners are "accredited investors".
(c) The holder of this Warrant, by acceptance hereof, agrees to give
written notice to the Company before exercising or transferring this Warrant, in
whole or in part, or transferring any shares of Common Stock issuable or issued
upon the exercise hereof, of such holder's intention to do so, describing
briefly the manner of any proposed exercise or transfer. Such holder shall also
provide the Company with an opinion of counsel satisfactory to the Company to
the effect that the proposed exercise or transfer of this Warrant or transfer of
shares may be effected without registration or qualification under the Act and
any applicable state securities laws of this Warrant and the shares of Common
Stock issuable or issued upon the exercise hereof. Upon receipt of such written
notice and opinion by the Company, such holder shall be entitled to exercise
this Warrant in accordance with its terms, or to transfer this Warrant, or to
transfer shares of Common Stock issuable or issued upon the exercise of this
Warrant, all in accordance with the terms of the notice delivered by such holder
to the Company, provided that an appropriate legend respecting the aforesaid
restrictions on transfer may be endorsed on this Warrant or the certificates for
such shares. In the event of a proposed transfer of this Warrant, prior to the
transfer the proposed transferee shall execute and deliver to the Company a
warrant transfer letter in the form attached hereto.
8. Subject to the provisions of paragraph 7 hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, at the principal
office of the Company by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant properly endorsed. Each taker and
holder of this Warrant, by taking or holding the same, consents and agrees that
the bearer of this Warrant, when endorsed, may be treated by the Company and all
other persons dealing with this Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer hereof on the books of the Company, any notice to
the contrary notwithstanding; but until such transfer on such books, the Company
may treat the registered holder hereof as the owner for all purposes.
-6-
<PAGE>
9. This Warrant is exchangeable, upon the surrender hereof by the
holder hereof at the principal office of the Company, for new Warrants of like
tenor representing in the aggregate the right to subscribe for and purchase the
number of shares which may be subscribed for and purchased hereunder, each of
such new Warrants to represent the right to subscribe for and purchase such
number of shares as shall be designated by said holder hereof at the time of
such surrender.
10. All questions concerning this Warrant will be governed and
interpreted and enforced in accordance with the internal law of the State of
Minnesota.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer and this Warrant to be dated as of December 1,
1997.
GALAGEN INC
By
----------------------------------
Its
-----------------------------
RESTRICTION ON TRANSFER
The securities evidenced hereby may not be transferred without (i) the
opinion of counsel satisfactory to the Company that such transfer may be
lawfully made without registration under the Securities Act of 1933, as amended,
and all applicable state securities laws or (ii) such registration.
-7-
<PAGE>
ASSIGNMENT
(To Be Signed Only Upon Assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ___________________________________________________________
this Warrant, and appoints _____________________ to transfer this Warrant
on the books of GalaGen Inc. with the full power of substitution in the
premises.
Dated:
-----------------------------------
In the presence of:
-----------------------------------
-----------------------------------
(Signature must conform in all
respects to the name of the holder
as specified on the face of this
Warrant without any alteration or
change whatsoever, and the
signature must be guaranteed in the
usual manner)
<PAGE>
FORM OF WARRANT TRANSFER LETTER
To: GalaGen Inc.
Ladies and Gentlemen:
The undersigned is a proposed transferee of the warrant (the "Warrant") to
purchase ____________________ shares of Common Stock, no par value ("Common
Stock"), of GalaGen Inc., a Delaware corporation (the "Company"), currently
registered in the name of ____________________. In order to induce the Company
to consent to the transfer of the Warrant, the undersigned hereby represents,
warrants and agrees as follows:
1. The undersigned acknowledges that neither the Warrant nor any of the
shares of Common Stock issuable upon exercise thereof have been registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities laws
and that, accordingly, the Warrant and such shares of Common Stock may only be
transferred in accordance with the terms of paragraph 7 of the Warrant.
2. The undersigned is acquiring the Warrant for investment and not with a
view to distribution of the Warrant or the shares of Common Stock issuable upon
exercise thereof within the meaning of the Act and the rules and regulations
thereunder.
3. The undersigned is an "accredited investor" as defined in Rule 501(a)
of Regulation D promulgated under the Act.
Signature
--------------------------------------
Address
----------------------------------------
Date
-------------------------------------------
<PAGE>
FORM OF EXERCISE NOTICE
To be Executed by the Holder of this Warrant if such Holder
Desires to Exercise this Warrant in Whole or in Part:
To: GalaGen Inc. (the "Company")
The undersigned ___________________________________________
Please insert Social Security or other
identifying number of Purchaser:
___________________________________________
hereby irrevocably elects to exercise the right of purchase represented by this
Warrant for, and to purchase thereunder, ______________________ shares of the
Common Stock provided for therein and tenders payment herewith to the order of
the Company in the amount of $______________________, such payment being made as
provided on the face of this Warrant.
In order to induce the Company to consent to the exercise of this Warrant,
the undersigned hereby represents, warrants and agrees as follows:
1. The undersigned acknowledges that neither this Warrant nor any of the
shares of Common Stock issuable upon exercise hereof have been registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities laws
and that, accordingly, this Warrant may be exercised and the shares of Common
Stock issued pursuant to this exercise may only be transferred in accordance
with the terms of paragraph 7 of this Warrant.
2. The undersigned is acquiring the shares of Common Stock issued
pursuant to this exercise for investment and not with a view to distribution of
such shares within the meaning of the Act and the rules and regulations
thereunder.
3. The undersigned is an "accredited investor" as defined in Rule 501(a)
of Regulation D promulgated under the Act.
<PAGE>
The undersigned requests that certificates for such shares of Common
Stock be issued as follows:
Name:
--------------------------------------------------------------
Address:
--------------------------------------------------------------
Deliver to:
--------------------------------------------------------------
Address:
--------------------------------------------------------------
and, if such number of shares of Common Stock shall not be all the shares of
Common Stock purchasable hereunder, that a new Warrant for the balance remaining
of the shares of Common Stock purchasable under this Warrant be registered in
the name of, and delivered to, the undersigned at the address stated below.
Address:
--------------------------------------------------------------
Signature
------------------------------------------
(Signature must conform in all respects to
the name of the holder as written specified
on the face of this Warrant without any
alteration or change whatsoever)
Dated:
----------------------
<PAGE>
EXHIBIT 4.13
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
GALAGEN INC.
THIS WARRANT CERTIFIES THAT, for value received, CLARCO Holdings
(herein called "Purchaser") or registered assigns is entitled to subscribe for
and purchase from GalaGen Inc. (herein called the "Company"), a corporation
organized and existing under the laws of the State of Delaware, at the price
specified below (subject to adjustment as noted below) at any time from and
after December 1, 1997 to and including December 1, 2002, Forty Thousand
(40,000) fully paid and nonassessable shares of the Company's Common Stock, $.01
par value per share ("Common Stock") (subject to adjustment as noted below).
The warrant purchase price shall be $3.00 per share (subject to
adjustment as noted below).
This Warrant is subject to the following provisions, terms and
conditions:
1. The rights represented by this Warrant may be exercised by the
holder hereof, in whole or in part, by written notice of exercise, in the form
attached hereto, delivered to the Company ten days prior to the intended date of
exercise and by the surrender of this Warrant (properly endorsed if required) at
the principal office of the Company and upon payment to it by check of the
purchase price in lawful money of the United States. The Company agrees that
the shares so purchased shall be and are deemed to be issued to the holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such
shares as aforesaid. Subject to the provisions of the next succeeding
paragraph, certificates for the shares of stock so purchased shall be delivered
to the holder hereof within a reasonable time, not exceeding l0 days, after the
rights represented by this Warrant shall have been so exercised, and, unless
this Warrant has expired, a new Warrant representing the number of shares, if
any, with respect to which this Warrant shall not then have been exercised shall
also be delivered to the holder hereof within such time.
2. Notwithstanding the foregoing, however, the Company shall not be
required to deliver any certificate for shares of stock upon exercise of this
Warrant except in accordance with the provisions, and subject to the
limitations, of paragraph 7 hereof and the restrictive legend under the heading
"Restriction on Transfer" below.
3. The Company covenants and agrees that all shares which may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be duly authorized and issued, fully paid and nonassessable. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of
<PAGE>
issue or transfer upon exercise of the subscription rights evidenced by this
Warrant, a sufficient number of shares of its Common Stock to provide for the
exercise of the rights represented by this Warrant.
4. The above provisions are, however, subject to the following:
(a) The warrant purchase price shall, from and after the date of
issuance of this Warrant, be subject to adjustment from time to time as
hereinafter provided. Upon each adjustment of the warrant purchase price, the
holder of this Warrant shall thereafter be entitled to purchase, at the warrant
purchase price resulting from such adjustment, the number of shares obtained by
multiplying the warrant purchase price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately prior
to such adjustment and dividing the product thereof by the warrant purchase
price resulting from such adjustment.
(b) In case the Company shall (i) declare a dividend upon the Common
Stock payable in Common Stock (other than a dividend declared to effect a
subdivision of the outstanding shares of Common Stock, as described in
paragraph (c) below) or any obligations or any shares of stock of the Company
which are convertible into or exchangeable for Common Stock (any of such
obligations or shares of stock being hereinafter called "Convertible
Securities"), or in any rights or options to purchase Common Stock or
Convertible Securities, or (ii) declare any other dividend or make any other
distribution upon the Common Stock payable otherwise than out of earnings or
earned surplus, then thereafter the holder of this Warrant upon the exercise
hereof will be entitled to receive the number of shares of Common Stock to which
such holder shall be entitled upon such exercise, and, in addition and without
further payment therefor, each dividend described in clause (i) above and each
dividend or distribution described in clause (ii) above which such holder would
have received by way of dividends or distributions if continuously since such
holder became the record holder of this Warrant such holder (x) had been the
record holder of the number of shares of Common Stock then received, and (y) had
retained all dividends or distributions in stock or securities (including Common
Stock or Convertible Securities, and any rights or options to purchase any
Common Stock or Convertible Securities) payable in respect of such Common Stock
or in respect of any stock or securities paid as dividends or distributions and
originating directly or indirectly from such Common Stock. For the purposes of
the foregoing, a dividend or distribution other than in cash shall be considered
payable out of earnings or earned surplus only to the extent that such earnings
or earned surplus are charged an amount equal to the fair value of such dividend
or distribution as determined by the Board of Directors of the Company.
(c) In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the warrant purchase
price in effect immediately prior to such subdivision shall be proportionately
reduced, and conversely, in case the outstanding shares of Common Stock of the
Company shall be combined into a
-2-
<PAGE>
smaller number of shares, the warrant purchase price in effect immediately prior
to such combination shall be proportionately increased.
(d) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another
corporation, or sale of all or substantially all of its assets to another
corporation (any such reorganization, reclassification, consolidation, merger or
sale being hereinafter called an "Event") shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for Common Stock, then, unless lawful and
adequate provision shall have been made whereby the holder hereof shall
thereafter have the right to purchase and receive, upon the basis and upon the
terms and conditions specified in this Warrant and in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for a number of outstanding shares of Common Stock of the Company equal to the
number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby had the Event not
taken place, the Board of Directors of the Company shall declare, at least
twenty days prior to the actual effective date of the Event, and provide written
notice to the holder hereof of the declaration, that this Warrant shall be
canceled at the time of, or immediately prior to the occurrence of, the Event
(unless it shall have been exercised prior to the occurrence of the Event) in
exchange for payment to the holder hereof, within twenty days after the Event,
of cash equal to the amount (if any), for each share of Common Stock issuable
upon exercise of this Warrant, by which the Event Proceeds per share of Common
Stock (as hereinafter defined) exceeds the purchase price per share of Common
Stock under this Warrant. In the event of a declaration pursuant to this
paragraph (d), this Warrant, if not exercised prior to the Event, shall be
canceled at the time of, or immediately prior to, the Event, as provided in the
declaration, subject to the payment obligations of the Company provided in this
paragraph (d). For purposes of this paragraph (d), "Event Proceeds per share of
Common Stock" shall mean the cash plus the fair market value, as determined in
good faith by the Board of Directors of the Company, of the non-cash
consideration to be received per share of Common Stock by the shareholders of
the Company upon the occurrence of the Event. If provision shall be made,
pursuant to this paragraph (d), for the right of the holder hereof to purchase
and receive stock, securities or assets of any successor corporation (other than
the Company) upon the occurrence of any Event, then such successor corporation
shall assume, by written instrument executed and mailed to the registered holder
hereof at the last address of such holder appearing on the books of the Company,
the obligation to deliver to such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to purchase.
(e) Upon any adjustment of the warrant purchase price, then and in
each such case the Company shall give written notice thereof, by first-class
mail, postage prepaid, addressed to the registered holder of this Warrant at the
address of such holder as shown on the books of the Company, which notice shall
state the warrant purchase price resulting from
-3-
<PAGE>
such adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
(f) In case any time:
(1) the Company shall declare any cash dividend on Common Stock
at a rate in excess of the rate of the last cash dividend theretofore
paid;
(2) the Company shall pay any dividend payable in stock upon
Common Stock or make any distribution (other than regular cash
dividends) to the holders of Common Stock;
(3) the Company shall offer for subscription pro rata to the
holders of Common Stock any additional shares of stock of any class or
other rights;
(4) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation
or merger of the Company with, or sale of all or substantially all of
its assets to, another corporation; or
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give written notice,
by first-class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company, of
the date on which (aa) the books of the Company shall close or a record shall be
taken for such dividend, distribution or subscription rights, or (bb) such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up shall take place, as the case may be. Such notice
shall also specify the date as of which the holders of Common Stock of record
shall participate in such dividend, distribution or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be. Such
written notice shall be given at least 20 days prior to the action in question
and not less than 20 days prior to the record date or the date on which the
Company's transfer books are closed in respect thereto.
(g) If any event occurs as to which in the opinion of the Board of
Directors of the Company the other provisions of this paragraph 4 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the holder of this Warrant or of Common Stock in accordance
with the essential intent and principles of such provisions, then the Board of
Directors shall make an adjustment in the application of such provisions, in
accordance with such essential intent and principles, so as to protect such
purchase rights as
-4-
<PAGE>
aforesaid; provided, however, that the members of the Board of Directors of the
Company shall not be liable to the holders hereof for any such determination
made in good faith.
(h) No fractional shares of Common Stock shall be issued upon the
exercise of this Warrant, but, instead of any fraction of a share which would
otherwise be issuable, the Company shall pay a cash adjustment (which may be
effected as a reduction of the amount to be paid by the holder hereof upon such
exercise) in respect of such fraction in an amount equal to the same fraction of
the market price per share of Common Stock as of the close of business on the
date preceding the written notice of exercise required by paragraph 1 above.
"Market price" for purposes of this paragraph 4(h) shall mean, if the Common
Stock is traded on a securities exchange or on The Nasdaq National Market, the
closing price of the Common Stock on such exchange or The Nasdaq National
Market, or, if the Common Stock is otherwise traded in the over-the-counter
market, the closing bid price, in each case averaged over a period of 20
consecutive business days prior to the date as of which "market price" is being
determined. If at any time the Common Stock is not traded on an exchange or The
Nasdaq National Market, or otherwise traded in the over-the-counter market, the
"market price" shall be deemed to be the higher of (i) the book value thereof as
determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company as of the last day of any
month ending within 60 days preceding the date as of which the determination is
to be made, or (ii) the fair value thereof determined in good faith by the Board
of Directors of the Company as of a date which is within l5 days of the date as
of which the determination is to be made.
5. As used herein, the term "Common Stock" shall mean and include
the Company's presently authorized Common Stock and shall also include any
capital stock of any class of the Company hereafter authorized which shall not
be limited to a fixed sum or percentage in respect of the rights of the holders
thereof to participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company;
provided that the shares purchasable pursuant to this Warrant shall include
shares designated as Common Stock of the Company on the date of original issue
of this Warrant or, in the case of any reclassification of the outstanding
shares thereof, the stock, securities or assets provided for in paragraph 4(d)
above.
6. This Warrant shall not entitle the holder hereof to any voting
rights or other rights as a stockholder of the Company.
7.(a) The holder of this Warrant acknowledges that neither this
Warrant nor any of the shares of Common Stock issuable upon exercise hereof have
been registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and that this Warrant or such shares of Common Stock may
only be transferred in accordance with this paragraph 7. The holder of this
Warrant, by acceptance hereof, represents that it has acquired this Warrant for
investment and not with a view to distribution of this Warrant or the shares of
-5-
<PAGE>
Common Stock issuable upon exercise hereof within the meaning of the Act and the
rules and regulations thereunder.
(b) The Purchaser realizes that the purchase of this Warrant is a
speculative investment, and that the economic benefits which may be derived
therefrom are uncertain. In determining whether or not to purchase the Warrant,
the Purchaser has relied solely upon the publicly-available materials filed by
the Company with the Securities and Exchange Commission, copies of which have
been reviewed by the Purchaser, and upon independent investigations made by the
Purchaser and its representatives.
(c) The Purchaser represents to the Company that it is an "accredited
investor" as defined in Rule 501(a) of Regulation D promulgated under the Act,
by virtue of being (i) a corporation not formed for the specific purpose of
acquiring this Warrant with total assets in excess of $5,000,000 or (ii) an
entity in which all of the equity owners are "accredited investors".
(c) The holder of this Warrant, by acceptance hereof, agrees to give
written notice to the Company before exercising or transferring this Warrant, in
whole or in part, or transferring any shares of Common Stock issuable or issued
upon the exercise hereof, of such holder's intention to do so, describing
briefly the manner of any proposed exercise or transfer. Such holder shall also
provide the Company with an opinion of counsel satisfactory to the Company to
the effect that the proposed exercise or transfer of this Warrant or transfer of
shares may be effected without registration or qualification under the Act and
any applicable state securities laws of this Warrant and the shares of Common
Stock issuable or issued upon the exercise hereof. Upon receipt of such written
notice and opinion by the Company, such holder shall be entitled to exercise
this Warrant in accordance with its terms, or to transfer this Warrant, or to
transfer shares of Common Stock issuable or issued upon the exercise of this
Warrant, all in accordance with the terms of the notice delivered by such holder
to the Company, provided that an appropriate legend respecting the aforesaid
restrictions on transfer may be endorsed on this Warrant or the certificates for
such shares. In the event of a proposed transfer of this Warrant, prior to the
transfer the proposed transferee shall execute and deliver to the Company a
warrant transfer letter in the form attached hereto.
8. Subject to the provisions of paragraph 7 hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, at the principal
office of the Company by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant properly endorsed. Each taker and
holder of this Warrant, by taking or holding the same, consents and agrees that
the bearer of this Warrant, when endorsed, may be treated by the Company and all
other persons dealing with this Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer hereof on the books of the Company, any notice to
the contrary notwithstanding; but until such transfer on such books, the Company
may treat the registered holder hereof as the owner for all purposes.
-6-
<PAGE>
9. This Warrant is exchangeable, upon the surrender hereof by the
holder hereof at the principal office of the Company, for new Warrants of like
tenor representing in the aggregate the right to subscribe for and purchase the
number of shares which may be subscribed for and purchased hereunder, each of
such new Warrants to represent the right to subscribe for and purchase such
number of shares as shall be designated by said holder hereof at the time of
such surrender.
10. All questions concerning this Warrant will be governed and
interpreted and enforced in accordance with the internal law of the State of
Minnesota.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer and this Warrant to be dated as of December 1,
1997.
GALAGEN INC
By
----------------------------
Its
-------------------------
RESTRICTION ON TRANSFER
The securities evidenced hereby may not be transferred without (i) the
opinion of counsel satisfactory to the Company that such transfer may be
lawfully made without registration under the Securities Act of 1933, as amended,
and all applicable state securities laws or (ii) such registration.
-7-
<PAGE>
ASSIGNMENT
(To Be Signed Only Upon Assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________________________________
this Warrant, and appoints _________________________________________________
to transfer this Warrant on the books of GalaGen Inc. with the full power of
substitution in the premises.
Dated: ___________________________________
In the presence of: ___________________________________
----------------------------------------
(Signature must conform in all respects to
the name of the holder as specified on the
face of this Warrant without any alteration
or change whatsoever, and the signature must
be guaranteed in the usual manner)
<PAGE>
FORM OF WARRANT TRANSFER LETTER
To: GalaGen Inc.
Ladies and Gentlemen:
The undersigned is a proposed transferee of the warrant (the "Warrant") to
purchase ____________________ shares of Common Stock, no par value ("Common
Stock"), of GalaGen Inc., a Delaware corporation (the "Company"), currently
registered in the name of ____________________. In order to induce the Company
to consent to the transfer of the Warrant, the undersigned hereby represents,
warrants and agrees as follows:
1. The undersigned acknowledges that neither the Warrant nor any of the
shares of Common Stock issuable upon exercise thereof have been registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities laws
and that, accordingly, the Warrant and such shares of Common Stock may only be
transferred in accordance with the terms of paragraph 7 of the Warrant.
2. The undersigned is acquiring the Warrant for investment and not with a
view to distribution of the Warrant or the shares of Common Stock issuable upon
exercise thereof within the meaning of the Act and the rules and regulations
thereunder.
3. The undersigned is an "accredited investor" as defined in Rule 501(a)
of Regulation D promulgated under the Act.
Signature
--------------------------------------
Address
---------------------------------------
Date
-------------------------------------------
<PAGE>
FORM OF EXERCISE NOTICE
To be Executed by the Holder of this Warrant if such Holder
Desires to Exercise this Warrant in Whole or in Part:
To: GalaGen Inc. (the "Company")
The undersigned ___________________________________________
Please insert Social Security or other
identifying number of Purchaser:
___________________________________________
hereby irrevocably elects to exercise the right of purchase represented by this
Warrant for, and to purchase thereunder, ______________________ shares of the
Common Stock provided for therein and tenders payment herewith to the order of
the Company in the amount of $______________________, such payment being made as
provided on the face of this Warrant.
In order to induce the Company to consent to the exercise of this Warrant,
the undersigned hereby represents, warrants and agrees as follows:
1. The undersigned acknowledges that neither this Warrant nor any of the
shares of Common Stock issuable upon exercise hereof have been registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities laws
and that, accordingly, this Warrant may be exercised and the shares of Common
Stock issued pursuant to this exercise may only be transferred in accordance
with the terms of paragraph 7 of this Warrant.
2. The undersigned is acquiring the shares of Common Stock issued
pursuant to this exercise for investment and not with a view to distribution of
such shares within the meaning of the Act and the rules and regulations
thereunder.
3. The undersigned is an "accredited investor" as defined in Rule 501(a)
of Regulation D promulgated under the Act.
<PAGE>
The undersigned requests that certificates for such shares of Common
Stock be issued as follows:
Name:
-------------------------------------------------------------
Address:
-------------------------------------------------------------
Deliver to:
-------------------------------------------------------------
Address:
-------------------------------------------------------------
and, if such number of shares of Common Stock shall not be all the shares of
Common Stock purchasable hereunder, that a new Warrant for the balance remaining
of the shares of Common Stock purchasable under this Warrant be registered in
the name of, and delivered to, the undersigned at the address stated below.
Address:
-------------------------------------------------------------
Signature
-------------------------------
(Signature must conform in all respects to
the name of the holder as written specified
on the face of this Warrant without any
alteration or change whatsoever)
Dated:
---------------------
<PAGE>
EXHIBIT 4.14
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
GALAGEN INC.
THIS WARRANT CERTIFIES THAT, for value received, CLARCO Holdings
(herein called "Purchaser") or registered assigns is entitled to subscribe for
and purchase from GalaGen Inc. (herein called the "Company"), a corporation
organized and existing under the laws of the State of Delaware, at the price
specified below (subject to adjustment as noted below) at any time (except as
noted in the proviso to this sentence) from and after the time the Company's
Common Stock (as hereinafter defined) trades at $6.50 per share or more for ten
consecutive trading days to and including December 1, 2002, Seventy-Five
Thousand (75,000) fully paid and nonassessable shares of the Company's Common
Stock, $.01 par value per share ("Common Stock") (subject to adjustment as noted
below); PROVIDED, HOWEVER, that this Warrant shall terminate and be of no
further force and effect on June 30, 1998 if it has not become exercisable by
such date as set forth above.
The warrant purchase price shall be $6.50 per share (subject to
adjustment as noted below).
This Warrant is subject to the following provisions, terms and
conditions:
1. The rights represented by this Warrant may be exercised by the
holder hereof, in whole or in part, by written notice of exercise, in the form
attached hereto, delivered to the Company ten days prior to the intended date of
exercise and by the surrender of this Warrant (properly endorsed if required) at
the principal office of the Company and upon payment to it by check of the
purchase price in lawful money of the United States. The Company agrees that
the shares so purchased shall be and are deemed to be issued to the holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such
shares as aforesaid. Subject to the provisions of the next succeeding
paragraph, certificates for the shares of stock so purchased shall be delivered
to the holder hereof within a reasonable time, not exceeding l0 days, after the
rights represented by this Warrant shall have been so exercised, and, unless
this Warrant has expired, a new Warrant representing the number of shares, if
any, with respect to which this Warrant shall not then have been exercised shall
also be delivered to the holder hereof within such time.
2. Notwithstanding the foregoing, however, the Company shall not be
required to deliver any certificate for shares of stock upon exercise of this
Warrant except in accordance with the provisions, and subject to the
limitations, of paragraph 7 hereof and the restrictive legend under the heading
"Restriction on Transfer" below.
<PAGE>
3. The Company covenants and agrees that all shares which may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be duly authorized and issued, fully paid and nonassessable. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
4. The above provisions are, however, subject to the following:
(a) The warrant purchase price shall, from and after the date of
issuance of this Warrant, be subject to adjustment from time to time as
hereinafter provided. Upon each adjustment of the warrant purchase price, the
holder of this Warrant shall thereafter be entitled to purchase, at the warrant
purchase price resulting from such adjustment, the number of shares obtained by
multiplying the warrant purchase price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately prior
to such adjustment and dividing the product thereof by the warrant purchase
price resulting from such adjustment.
(b) In case the Company shall (i) declare a dividend upon the Common
Stock payable in Common Stock (other than a dividend declared to effect a
subdivision of the outstanding shares of Common Stock, as described in
paragraph (c) below) or any obligations or any shares of stock of the Company
which are convertible into or exchangeable for Common Stock (any of such
obligations or shares of stock being hereinafter called "Convertible
Securities"), or in any rights or options to purchase Common Stock or
Convertible Securities, or (ii) declare any other dividend or make any other
distribution upon the Common Stock payable otherwise than out of earnings or
earned surplus, then thereafter the holder of this Warrant upon the exercise
hereof will be entitled to receive the number of shares of Common Stock to which
such holder shall be entitled upon such exercise, and, in addition and without
further payment therefor, each dividend described in clause (i) above and each
dividend or distribution described in clause (ii) above which such holder would
have received by way of dividends or distributions if continuously since such
holder became the record holder of this Warrant such holder (x) had been the
record holder of the number of shares of Common Stock then received, and (y) had
retained all dividends or distributions in stock or securities (including Common
Stock or Convertible Securities, and any rights or options to purchase any
Common Stock or Convertible Securities) payable in respect of such Common Stock
or in respect of any stock or securities paid as dividends or distributions and
originating directly or indirectly from such Common Stock. For the purposes of
the foregoing, a dividend or distribution other than in cash shall be considered
payable out of earnings or earned surplus only to the extent that such earnings
or earned surplus are charged an amount equal to the fair value of such dividend
or distribution as determined by the Board of Directors of the Company.
-2-
<PAGE>
(c) In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the warrant purchase
price in effect immediately prior to such subdivision shall be proportionately
reduced, and conversely, in case the outstanding shares of Common Stock of the
Company shall be combined into a smaller number of shares, the warrant purchase
price in effect immediately prior to such combination shall be proportionately
increased.
(d) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another
corporation, or sale of all or substantially all of its assets to another
corporation (any such reorganization, reclassification, consolidation, merger or
sale being hereinafter called an "Event") shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for Common Stock, then, unless lawful and
adequate provision shall have been made whereby the holder hereof shall
thereafter have the right to purchase and receive, upon the basis and upon the
terms and conditions specified in this Warrant and in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for a number of outstanding shares of Common Stock of the Company equal to the
number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby had the Event not
taken place, the Board of Directors of the Company shall declare, at least
twenty days prior to the actual effective date of the Event, and provide written
notice to the holder hereof of the declaration, that this Warrant shall be
canceled at the time of, or immediately prior to the occurrence of, the Event
(unless it shall have been exercised prior to the occurrence of the Event) in
exchange for payment to the holder hereof, within twenty days after the Event,
of cash equal to the amount (if any), for each share of Common Stock issuable
upon exercise of this Warrant, by which the Event Proceeds per share of Common
Stock (as hereinafter defined) exceeds the purchase price per share of Common
Stock under this Warrant. In the event of a declaration pursuant to this
paragraph (d), this Warrant, if not exercised prior to the Event, shall be
canceled at the time of, or immediately prior to, the Event, as provided in the
declaration, subject to the payment obligations of the Company provided in this
paragraph (d). For purposes of this paragraph (d), "Event Proceeds per share of
Common Stock" shall mean the cash plus the fair market value, as determined in
good faith by the Board of Directors of the Company, of the non-cash
consideration to be received per share of Common Stock by the shareholders of
the Company upon the occurrence of the Event. If provision shall be made,
pursuant to this paragraph (d), for the right of the holder hereof to purchase
and receive stock, securities or assets of any successor corporation (other than
the Company) upon the occurrence of any Event, then such successor corporation
shall assume, by written instrument executed and mailed to the registered holder
hereof at the last address of such holder appearing on the books of the Company,
the obligation to deliver to such holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to purchase.
-3-
<PAGE>
(e) Upon any adjustment of the warrant purchase price, then and in
each such case the Company shall give written notice thereof, by first-class
mail, postage prepaid, addressed to the registered holder of this Warrant at the
address of such holder as shown on the books of the Company, which notice shall
state the warrant purchase price resulting from such adjustment and the increase
or decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
(f) In case any time:
(1) the Company shall declare any cash dividend on Common Stock
at a rate in excess of the rate of the last cash dividend theretofore
paid;
(2) the Company shall pay any dividend payable in stock upon
Common Stock or make any distribution (other than regular cash
dividends) to the holders of Common Stock;
(3) the Company shall offer for subscription pro rata to the
holders of Common Stock any additional shares of stock of any class or
other rights;
(4) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation
or merger of the Company with, or sale of all or substantially all of
its assets to, another corporation; or
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give written notice,
by first-class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company, of
the date on which (aa) the books of the Company shall close or a record shall be
taken for such dividend, distribution or subscription rights, or (bb) such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up shall take place, as the case may be. Such notice
shall also specify the date as of which the holders of Common Stock of record
shall participate in such dividend, distribution or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be. Such
written notice shall be given at least 20 days prior to the action in question
and not less than 20 days prior to the record date or the date on which the
Company's transfer books are closed in respect thereto.
(g) If any event occurs as to which in the opinion of the Board of
Directors of the Company the other provisions of this paragraph 4 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the holder of this Warrant or of
-4-
<PAGE>
Common Stock in accordance with the essential intent and principles of such
provisions, then the Board of Directors shall make an adjustment in the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such purchase rights as aforesaid; provided,
however, that the members of the Board of Directors of the Company shall not be
liable to the holders hereof for any such determination made in good faith.
(h) No fractional shares of Common Stock shall be issued upon the
exercise of this Warrant, but, instead of any fraction of a share which would
otherwise be issuable, the Company shall pay a cash adjustment (which may be
effected as a reduction of the amount to be paid by the holder hereof upon such
exercise) in respect of such fraction in an amount equal to the same fraction of
the market price per share of Common Stock as of the close of business on the
date preceding the written notice of exercise required by paragraph 1 above.
"Market price" for purposes of this paragraph 4(h) shall mean, if the Common
Stock is traded on a securities exchange or on The Nasdaq National Market, the
closing price of the Common Stock on such exchange or The Nasdaq National
Market, or, if the Common Stock is otherwise traded in the over-the-counter
market, the closing bid price, in each case averaged over a period of 20
consecutive business days prior to the date as of which "market price" is being
determined. If at any time the Common Stock is not traded on an exchange or The
Nasdaq National Market, or otherwise traded in the over-the-counter market, the
"market price" shall be deemed to be the higher of (i) the book value thereof as
determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company as of the last day of any
month ending within 60 days preceding the date as of which the determination is
to be made, or (ii) the fair value thereof determined in good faith by the Board
of Directors of the Company as of a date which is within l5 days of the date as
of which the determination is to be made.
5. As used herein, the term "Common Stock" shall mean and include
the Company's presently authorized Common Stock and shall also include any
capital stock of any class of the Company hereafter authorized which shall not
be limited to a fixed sum or percentage in respect of the rights of the holders
thereof to participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company;
provided that the shares purchasable pursuant to this Warrant shall include
shares designated as Common Stock of the Company on the date of original issue
of this Warrant or, in the case of any reclassification of the outstanding
shares thereof, the stock, securities or assets provided for in paragraph 4(d)
above.
6. This Warrant shall not entitle the holder hereof to any voting
rights or other rights as a stockholder of the Company.
7.(a) The holder of this Warrant acknowledges that neither this
Warrant nor any of the shares of Common Stock issuable upon exercise hereof have
been registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and that this Warrant or such shares of Common Stock may
only be transferred in accordance with this
-5-
<PAGE>
paragraph 7. The holder of this Warrant, by acceptance hereof, represents that
it has acquired this Warrant for investment and not with a view to distribution
of this Warrant or the shares of Common Stock issuable upon exercise hereof
within the meaning of the Act and the rules and regulations thereunder.
(b) The Purchaser realizes that the purchase of this Warrant is a
speculative investment, and that the economic benefits which may be derived
therefrom are uncertain. In determining whether or not to purchase the Warrant,
the Purchaser has relied solely upon the publicly-available materials filed by
the Company with the Securities and Exchange Commission, copies of which have
been reviewed by the Purchaser, and upon independent investigations made by the
Purchaser and its representatives.
(c) The Purchaser represents to the Company that it is an "accredited
investor" as defined in Rule 501(a) of Regulation D promulgated under the Act,
by virtue of being (i) a corporation not formed for the specific purpose of
acquiring this Warrant with total assets in excess of $5,000,000 or (ii) an
entity in which all of the equity owners are "accredited investors".
(c) The holder of this Warrant, by acceptance hereof, agrees to give
written notice to the Company before exercising or transferring this Warrant, in
whole or in part, or transferring any shares of Common Stock issuable or issued
upon the exercise hereof, of such holder's intention to do so, describing
briefly the manner of any proposed exercise or transfer. Such holder shall also
provide the Company with an opinion of counsel satisfactory to the Company to
the effect that the proposed exercise or transfer of this Warrant or transfer of
shares may be effected without registration or qualification under the Act and
any applicable state securities laws of this Warrant and the shares of Common
Stock issuable or issued upon the exercise hereof. Upon receipt of such written
notice and opinion by the Company, such holder shall be entitled to exercise
this Warrant in accordance with its terms, or to transfer this Warrant, or to
transfer shares of Common Stock issuable or issued upon the exercise of this
Warrant, all in accordance with the terms of the notice delivered by such holder
to the Company, provided that an appropriate legend respecting the aforesaid
restrictions on transfer may be endorsed on this Warrant or the certificates for
such shares. In the event of a proposed transfer of this Warrant, prior to the
transfer the proposed transferee shall execute and deliver to the Company a
warrant transfer letter in the form attached hereto.
8. Subject to the provisions of paragraph 7 hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, at the principal
office of the Company by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant properly endorsed. Each taker and
holder of this Warrant, by taking or holding the same, consents and agrees that
the bearer of this Warrant, when endorsed, may be treated by the Company and all
other persons dealing with this Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer hereof on the books of the Company, any notice to
the contrary notwithstanding; but
-6-
<PAGE>
until such transfer on such books, the Company may treat the registered holder
hereof as the owner for all purposes.
9. This Warrant is exchangeable, upon the surrender hereof by the
holder hereof at the principal office of the Company, for new Warrants of like
tenor representing in the aggregate the right to subscribe for and purchase the
number of shares which may be subscribed for and purchased hereunder, each of
such new Warrants to represent the right to subscribe for and purchase such
number of shares as shall be designated by said holder hereof at the time of
such surrender.
10. All questions concerning this Warrant will be governed and
interpreted and enforced in accordance with the internal law of the State of
Minnesota.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer and this Warrant to be dated as of December 1,
1997.
GALAGEN INC
By
----------------------------------
Its
-----------------------------
RESTRICTION ON TRANSFER
The securities evidenced hereby may not be transferred without (i) the
opinion of counsel satisfactory to the Company that such transfer may be
lawfully made without registration under the Securities Act of 1933, as amended,
and all applicable state securities laws or (ii) such registration.
-7-
<PAGE>
ASSIGNMENT
(To Be Signed Only Upon Assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________________________ this _______________________
Warrant, and appoints to transfer this Warrant on the books of GalaGen Inc.
with the full power of substitution in the premises.
Dated:
-----------------------------------
In the presence of:
-----------------------------------
-------------------------------------------
(Signature must conform in all respects to
the name of the holder as specified on the
face of this Warrant without any alteration
or change whatsoever, and the signature must
be guaranteed in the usual manner)
<PAGE>
FORM OF WARRANT TRANSFER LETTER
To: GalaGen Inc.
Ladies and Gentlemen:
The undersigned is a proposed transferee of the warrant (the "Warrant") to
purchase ___________ shares of Common Stock, no par value ("Common Stock"), of
GalaGen Inc., a Delaware corporation (the "Company"), currently registered in
the name of ________________. In order to induce the Company to consent to
the transfer of the Warrant, the undersigned hereby represents, warrants and
agrees as follows:
1. The undersigned acknowledges that neither the Warrant nor any of the
shares of Common Stock issuable upon exercise thereof have been registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities laws
and that, accordingly, the Warrant and such shares of Common Stock may only be
transferred in accordance with the terms of paragraph 7 of the Warrant.
2. The undersigned is acquiring the Warrant for investment and not with a
view to distribution of the Warrant or the shares of Common Stock issuable upon
exercise thereof within the meaning of the Act and the rules and regulations
thereunder.
3. The undersigned is an "accredited investor" as defined in Rule 501(a)
of Regulation D promulgated under the Act.
Signature
----------------------------------------
Address
-------------------------------------------
Date
----------------------------------------------
<PAGE>
FORM OF EXERCISE NOTICE
To be Executed by the Holder of this Warrant if such Holder
Desires to Exercise this Warrant in Whole or in Part:
To: GalaGen Inc. (the "Company")
The undersigned ___________________________________________
Please insert Social Security or other
identifying number of Purchaser:
___________________________________________
hereby irrevocably elects to exercise the right of purchase represented by this
Warrant for, and to purchase thereunder, ______________________ shares of the
Common Stock provided for therein and tenders payment herewith to the order of
the Company in the amount of $______________________, such payment being made as
provided on the face of this Warrant.
In order to induce the Company to consent to the exercise of this Warrant,
the undersigned hereby represents, warrants and agrees as follows:
1. The undersigned acknowledges that neither this Warrant nor any of the
shares of Common Stock issuable upon exercise hereof have been registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities laws
and that, accordingly, this Warrant may be exercised and the shares of Common
Stock issued pursuant to this exercise may only be transferred in accordance
with the terms of paragraph 7 of this Warrant.
2. The undersigned is acquiring the shares of Common Stock issued
pursuant to this exercise for investment and not with a view to distribution of
such shares within the meaning of the Act and the rules and regulations
thereunder.
3. The undersigned is an "accredited investor" as defined in Rule 501(a)
of Regulation D promulgated under the Act.
<PAGE>
The undersigned requests that certificates for such shares of Common
Stock be issued as follows:
Name:
----------------------------------------------------------------
Address:
----------------------------------------------------------------
Deliver to:
----------------------------------------------------------------
Address:
----------------------------------------------------------------
and, if such number of shares of Common Stock shall not be all the shares of
Common Stock purchasable hereunder, that a new Warrant for the balance remaining
of the shares of Common Stock purchasable under this Warrant be registered in
the name of, and delivered to, the undersigned at the address stated below.
Address:
----------------------------------------------------------------
Signature
--------------------------------------------
(Signature must conform in all respects to
the name of the holder as written specified
on the face of this Warrant without any
alteration or change whatsoever)
Dated:
----------------------
<PAGE>
EXHIBIT 5
FAEGRE & BENSON LLP
2200 NORWEST CENTER
90 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402-3901
612/336-3000
FACSIMILE 612/336-3026
December 23, 1997
GalaGen Inc.
4001 Lexington Avenue North
Arden Hills, Minnesota 55126
Ladies and Gentlemen:
In connection with the proposed registration under the Securities
Act of 1933, as amended, of 1,269,062 shares of Common Stock, par value $.01
per share, of GalaGen Inc., a Delaware corporation (the "Company"), proposed
to be sold by certain Selling Stockholders of the Company, we have examined
such corporate records and other documents, including the Registration
Statement on Form S-3, dated November 26, 1997, and Amendment No. 1 thereto,
dated the date hereof, relating to such shares (the "Registration
Statement"), and have reviewed such matters of law as we have deemed
necessary for this opinion, and we advise you that in our opinion:
1. The Company is a corporation duly organized and existing under
the laws of the State of Delaware.
2. The shares of Common Stock proposed to be sold by the Selling
Stockholders named in the Registration Statement, when sold as contemplated in
the Registration Statement, will be legally and validly issued and fully paid
and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm wherever appearing
therein.
Very truly yours,
/s/ Faegre & Benson LLP
FAEGRE & BENSON LLP
