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WARRANT EXHIBIT 4.42
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
GALAGEN INC.
THIS WARRANT CERTIFIES THAT, for value received, Carlson Real Estate
Company, Inc., a Minnesota corporation (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 June 12, 2000 to and including June 12,
2010, Ten Thousand (10,000) 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 $5.00 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 paragraphs 7 and 8 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
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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 that 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
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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 the
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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
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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
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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 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, subject to prior approval of the Company,
which approval shall not be unreasonably withheld, 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.
Notwithstanding the foregoing, and subject to the provisions of paragraph 7
hereof, this Warrant and all rights hereunder are transferable to (i) any
Affiliate of the Company, (ii) any direct descendent of Curtis L. Carlson, (iii)
the spouse of any direct descendent of Curtis L. Carlson, or (iv) any trust or
trusts for the benefit of only direct descendent of Curtis L. Carlson and their
spouses without the prior approval of the Company, 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. For
purposes of the preceding sentence, "Affiliate" means any person that directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Company. 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
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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.
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 June 12, 2000.
GALAGEN INC.
By /s/ Franklin L. Kuhar
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Its Chief Financial Officer
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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.
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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:
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In the presence of:
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(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)
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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, par value $.01 ("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 paragraphs 7 and 8 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
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Address
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Date
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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:
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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.
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The undersigned requests that certificates for such shares of Common Stock
be issued as follows:
Name:
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Address:
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Deliver to:
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Address:
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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:
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Signature
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(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:
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