EXHIBIT 4.8
[Profit Sharing]
SUBSCRIPTION AGREEMENT AND
INVESTMENT LETTER
-----------------
GalaGen Inc.
0000 Xxx Xxx Xxxx
XX - 7420
Xxxxx Xxxxx, Xxxxxxxxx 00000-0000
Gentlemen:
The undersigned hereby subscribes for and offers to purchase from
GalaGen Inc., a Delaware corporation (the "Company"), 35,000 shares of Common
Stock of the Company, par value $.01 per share (the "Shares"). The
undersigned further understands that the offering is being made without
registration of the Shares under the Securities Act of 1933, as amended (the
"Securities Act"), and is being made only to "accredited investors" (as
defined in Rule 501 of Regulation D under the Securities Act).
1. PURCHASE PRICE. Subject to the terms and conditions hereof, the
undersigned hereby irrevocably subscribes for the Shares for an aggregate
purchase price of $52,500, which amount is payable as described in Section 4
hereof.
2. ACCEPTANCE OF SUBSCRIPTION AND ISSUANCE OF SHARES. It is
understood and agreed that the Company shall have the sole right, at its
complete discretion, to accept or reject this subscription, in whole or in
part, for any reason and that the same shall be deemed to be accepted by the
Company only when it is signed by a duly authorized officer of the Company
and delivered to the undersigned at the Closing referred to in Section 3
hereof. Notwithstanding anything in this Agreement to the contrary, the
Company shall have no obligation to issue any of the Shares to any person who
is a resident of a jurisdiction in which the issuance of Shares to such
person would constitute a violation of the securities, "blue sky" or other
similar laws of such jurisdiction (collectively referred to as the "State
Securities Laws").
3. THE CLOSING. The closing of the purchase and sale of the
Shares (the "Closing") shall take place on April 20, 1999 (the "Closing
Date") and at a place and at a time mutually agreed to by the Company and the
undersigned.
4. PAYMENT FOR SHARES. Payment for the Shares shall be received
by the Company from the undersigned by cashier's check or wire transfer of
immediately available funds at or prior to the Closing. The Company shall
deliver the Shares to the undersigned at the Closing.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the undersigned that:
(a) The Company is duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, with full power
and authority to conduct its business as it is currently being conducted
and to own its assets. The Company is duly qualified as a foreign
corporation to do business in each jurisdiction in which the ownership of
its property or the conduct of its business requires such qualification,
except where the failure to so qualify would not materially or adversely
affect the Company, its business, assets, condition (financial or
otherwise) or operations.
(b) The Company has all requisite authority to enter into this
Agreement and the Registration Rights Agreement (as defined in
Section 17) and to perform all the obligations required to be performed
by the Company hereunder and thereunder. All corporate action on the
part of the Company, its officers, directors and stockholders necessary
for the authorization, execution and delivery of this Agreement and the
Registration Rights Agreement, the performance of all the Company's
obligations hereunder and thereunder, and for the authorization,
issuance, sale and delivery of the Shares has been taken or will be taken
prior to the Closing. Each of this Agreement and the Registration Rights
Agreement, when executed and delivered by the Company, shall, assuming
due execution and delivery by the undersigned, constitute a valid and
legally binding obligation of the Company enforceable in accordance with
its terms, except as the enforceability hereof and thereof may be limited
by bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting the enforcement of creditors' rights generally, and except
for judicial limitations on the enforcement of the remedy of specific
performance and other equitable remedies.
(c) The Shares, when issued and paid for, will represent duly
authorized, validly issued and fully paid and nonassessable shares of
Common Stock of the Company, free of any liens, claims or encumbrances
except for restrictions on transfer imposed by state and federal
securities laws and except for the liens, claims and encumbrances created
by the undersigned, and the issuance of the Shares is not subject to any
preemptive right or right of first refusal that has not been waived.
(d) Assuming the accuracy of the representations and warranties
of the undersigned contained in Section 6 hereof on the date hereof and
on the Closing Date, the offer, issue, and sale of the Shares are exempt
from the registration and prospectus delivery requirements of the
Securities Act and have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit, or
qualification requirements of all applicable State Securities Laws.
(e) The Company has furnished to the undersigned the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1998
(the "SEC
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Document"). The Company warrants that, as of its date (or if
amended, as of the date of such amendment), the SEC Document complied as
to form in all material respects with the requirements of the Securities
Exchange Act of 1934 (the "1934 Act"), and the information contained in
such document, as of its date, did not contain any untrue statement of a
material fact, and did not omit to state any material fact necessary to
make any statement, in light of the circumstances under which such
statement was made, not misleading. The Company has not filed with the
Securities and Exchange Commission (the "SEC") any reports under the 1934
Act since the date of the SEC Document.
(f) The Company has, within the past twelve months, timely
filed with the SEC all reports and other documents required to be so
filed.
(g) The Company is authorized to issue 40,000,000 shares of
Common Stock and 15,000,000 shares of Preferred Stock. As of March
31, 1999, there were 8,983,996 shares of Common Stock and no shares of
Preferred Stock outstanding. No shares of capital stock of the
Company, or securities convertible into or exercisable for such
capital stock, have been issued by the Company since March 31, 1999
except for issuances pursuant to the Company's equity compensation
plans or pursuant to outstanding options, warrants, rights or
convertible notes, in each case as disclosed in the SEC Document. All
outstanding shares of Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable; and none of the
outstanding shares of Common Stock were issued in violation of the
preemptive rights, if any, of any stockholders of the Company.
(h) There is no action, suit or proceeding pending, or, to the
Company's knowledge, threatened, against the Company (a) which questions
the validity of this Agreement or the ability of the Company to
consummate the transactions contemplated hereby or (b) which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially adversely affect the business, properties,
prospects, operations, or financial condition of the Company.
(i) To the Company's knowledge, there are no outstanding
stockholder agreements, voting trusts, proxies or other arrangements or
understandings among the stockholders of the Company relating to the
voting of their respective shares other than proxies which have been or
may be given in connection with the Company's annual meeting of
stockholders and other than as disclosed in documents filed with the SEC
pursuant to the Securities Exchange Act of 1934, as amended.
(j) The execution, delivery and performance of this Agreement
and the Registration Rights Agreement and consummation of the
transactions contemplated hereby and thereby will not (a) violate or
conflict with any provisions of the Restated Certificate of
Incorporation, as amended, or Bylaws of the Company; (b) result in any
breach, violation of or default or loss of a benefit under, or conflict
with, or permit the acceleration of any obligation under (in each case,
upon the giving of notice, the
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passage of time, or both) any mortgage, indenture, lease, loan
agreement or other agreement or instrument, permit, franchise,
license, judgment, order, decree, law, ordinance, rule or regulation
applicable to the Company or its properties.
(k) All consents, approvals, orders, or authorizations of, or
registrations, qualifications, designations, declarations, or filings
with, any federal, state or local governmental authority, required on the
part of the Company in connection with the valid execution, delivery and
performance of this Agreement and the Registration Rights Agreement, the
offer, sale or issuance of the Shares, or the consummation of any other
transaction contemplated hereby and thereby, have been obtained, or will
be effective at the Closing, except for notices required or permitted to
be filed with certain state and federal securities commissions after the
Closing, which notices will be filed on a timely basis and except for
filings and such other actions required to be taken pursuant to the
Registration Rights Agreement after the date hereof.
(l) Except as disclosed in or contemplated by the SEC Document
and except for the repurchase from Chiron Corporation on April 1, 1999 of
three warrants to purchase shares of Common Stock of the Company, the
Company has not otherwise had any material change in its condition,
financial or otherwise, except for changes in the ordinary course of
business, consistent with past practices, none of which individually or
in the aggregate has had a material adverse effect on the Company.
(m) The Common Stock of the Company is currently listed on the
Nasdaq National Market and shall continue to be listed on either the
Nasdaq National Market or The Nasdaq SmallCap Market.
(n) No representation or warranty by the Company in this
Agreement, and no statement by an officer of the Company contained in any
document, certificate or other writing furnished to the undersigned in
connection with the transactions contemplated hereby, when taken as a
whole, contains any untrue statement of a material fact or omits to state
any material fact necessary to make statements herein or therein not
misleading in light of the circumstances in which they are made.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE UNDERSIGNED.
The undersigned hereby represents and warrants to and covenants with the
Company that:
(a) GENERAL:
(i) The undersigned has all requisite authority to enter
into this Agreement and the Registration Rights Agreement and to perform
all the obligations required to be performed by the undersigned hereunder
and thereunder. Each of this Agreement and the Registration Rights
Agreement, when executed and delivered by the undersigned, shall,
assuming due execution and delivery by the Company, constitute a valid
and legally binding obligation of the undersigned enforceable in
accordance with its terms, except
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as the enforceability hereof and thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
the enforcement of creditors' rights generally, and except for
judicial limitations on the enforcement of the remedy of specific
performance and other equitable remedies.
(ii) The undersigned is a resident of or is domiciled in
the state or other jurisdiction set forth on the signature page hereto
and is not acquiring the Shares as an agent or otherwise for any other
person.
(b) INFORMATION CONCERNING THE COMPANY:
(i) The undersigned realizes that purchase of the Shares
is a speculative investment, and that the economic benefits which may be
derived therefrom are uncertain. In determining whether or not to make
an investment in the Company, the undersigned has relied solely upon the
written materials provided to the undersigned by the Company, receipt of
which is hereby acknowledged, and upon independent investigations made by
the undersigned and the undersigned's representatives.
(ii) The opportunity has been made available to the
undersigned to ask questions of and receive answers from representatives
of the Company concerning the terms and conditions of the Shares and to
review the Company's material books and records.
(iii) The undersigned understands that no federal or state
agency has passed upon the Shares or made any finding or determination
concerning the fairness or advisability of this investment.
(c) STATUS OF UNDERSIGNED:
(i) The undersigned, if an individual, has attained the
age of majority (as established in the undersigned's state of residence),
and, in any event, is under no disability with respect to entering into a
contractual relationship with the Company and in executing this
Agreement.
(ii) The undersigned has such knowledge, skill and
experience in business, financial and investment matters so that the
undersigned is capable of evaluating the merits and risks of an
investment in the Shares. To the extent necessary, the undersigned has
retained, at the undersigned's own expense, and relied upon, appropriate
professional advice regarding the investment, tax and legal merits and
consequences of this Agreement and of owning the Shares.
(iii) The undersigned is an "accredited investor" as
defined in Rule 501(a) under the Securities Act. The undersigned agrees
to furnish any
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additional information requested to assure compliance with
applicable federal and state securities laws in connection with the
purchase and sale of the Shares. The undersigned acknowledges that the
undersigned has completed Part I, the Subscriber Information
questionnaire, and Part II, the Accreditation Criteria questionnaire,
previously provided to the undersigned and that the information contained
therein is complete and accurate as of the date thereof and is hereby
affirmed as of the date hereof.
(iv) The information presented and statements made by the
undersigned in the questionnaire referred to in Section 6(c)(iii)
completed and delivered by the undersigned and returned to the Company
with this Agreement, and any additional information supplied by the
undersigned at the Company's request relating to the undersigned's
income, net worth, investment experience or other matters, are complete
and accurate as of this date and may be relied upon by the Company in
determining whether to accept this offer.
(v) The undersigned's commitment to investments that are
not readily marketable is not disproportionate to the undersigned's net
worth, and an investment in the Shares will not cause such commitment to
become excessive. The undersigned has adequate means of providing for
the undersigned's current needs and contingencies and has no need for
liquidity with respect to the undersigned's investment in the Shares, and
can withstand a complete loss of such investment in the Shares.
(d) RESTRICTIONS ON TRANSFER OR SALE OF SHARES:
(i) The undersigned is acquiring the Shares for the
undersigned's own account for investment purposes and not with a view to
or for resale in connection with any distribution thereof. The
undersigned understands that the Shares have not been registered under
the Securities Act, or any State Securities Laws, in reliance on
exemptions from registration which depend, in part, on the undersigned's
investment intention; and, accordingly, the truth and accuracy of the
foregoing representation will be relied upon by the Company to establish
such exemptions. The undersigned acknowledges that the Company is not
required to recognize any transfer of the Shares unless, in the opinion
of counsel to the Company, such transfer would not result in a violation
of any federal or state law regarding the offer and sale of securities
and unless the other restrictions on transfer set forth in the Shares are
complied with.
(ii) The undersigned understands that the Shares are
"restricted securities" under applicable federal securities laws and that
the Securities Act and the rules of the SEC provide in substance that the
undersigned may dispose of the Shares only pursuant to an effective
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registration statement under the Securities Act or an exemption
therefrom, and the undersigned understands that the Company has no
obligation or intention to register any of the Shares (except for the
registration rights referred to in Section 18 hereof), or to take action
so as to permit sales pursuant to the Securities Act (including Rule 144
thereunder). Accordingly, the undersigned understands that, under the
SEC's rules and until the Shares are registered for sale under the
Securities Act, the undersigned may dispose of the Shares principally
only in "private placements" which are exempt from registration under the
Securities Act, in which event the transferee will acquire "restricted
securities" subject to the same limitations as in the hands of the
undersigned. As a consequence, the undersigned understands that the
undersigned must bear the economic risks of the investment in the Shares
for an indefinite period of time.
(iii) The undersigned agrees: (A) that the undersigned
will not sell, assign, pledge, give, transfer or otherwise dispose of the
Shares or any interest therein, or make any offer or attempt to do any of
the foregoing, except pursuant to a registration of the Shares, as
applicable, under the Securities Act and all applicable State Securities
Laws or in a transaction which is exempt from the registration provisions
of the Securities Act and all applicable State Securities Laws; (B) that
the certificate(s) for the Shares will bear a legend making reference to
the foregoing restrictions; and (C) that the Company and any transfer
agent for the Shares shall not be required to give effect to any
purported transfer of such Shares except upon compliance with the
foregoing restrictions.
(iv) The undersigned has not offered or sold any portion
of the undersigned's Shares.
(v) The undersigned acknowledges that the Company has
the right in its sole and absolute discretion to abandon this private
placement at any time prior to the completion of the offering and to
return the previously paid subscription price of the Shares, without
interest thereon, to the undersigned.
(vi) The undersigned has not used any person as a
"Purchaser Representative" within the meaning of SEC Regulation D to
represent it in determining whether it should purchase the Shares.
7. CONDITIONS TO CLOSING.
(a) CONDITIONS TO OBLIGATIONS OF THE UNDERSIGNED. The
undersigned's obligation to purchase the Shares at the Closing is subject
to the fulfillment, at or prior to the Closing, of all of the following
conditions, any of which may be waived by the undersigned:
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(i) The representations and warranties made by the
Company in Section 5 hereof shall be true and correct in all respects on
the date of the Closing with the same force and effect as if they had
been made on and as of said date; and the Company shall have performed
and complied with all obligations, agreements and conditions herein
required to be performed by it on or prior to the Closing.
(ii) All corporate and other proceedings in connection
with the transactions contemplated at the Closing hereby and all
documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the undersigned, and the
undersigned shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
(iii) All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful sale and
issuance of the Shares pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing, except for
notices required or permitted to be filed with certain state and federal
securities commissions after the Closing, which notices will be filed on
a timely basis, and except for filings and other actions required to be
taken pursuant to the Registration Rights Agreement after the date
hereof. At the time of the Closing, the sale and issuance of the Shares
shall be legally permitted by all laws and regulations to which the
undersigned and the Company are subject.
(iv) No stop order or other order enjoining the sale of
the Shares shall have been issued and no proceedings for such purpose
shall be pending or, to the knowledge of the Company, threatened by the
SEC or any commissioner of corporations or similar officer of any other
state having jurisdiction over this transaction.
(v) The Company shall have delivered to the undersigned
a Certificate, executed by the President of the Company, dated the
Closing Date, certifying to (i) the fulfillment of the conditions
specified in subparagraphs (i) and (iv) of this Section 8 and (ii) the
incumbency of the officers of the Company executing this Agreement and
the other instruments delivered by the Company upon the Closing.
(b) CONDITIONS TO OBLIGATIONS OF THE COMPANY. In addition to,
and not in limitation of, the Company's rights set forth in Section 2
hereof, the Company's obligation to issue and sell the Shares at the
Closing is subject to the fulfillment, on or prior to the Closing, of the
following conditions, any of which may be waived by the Company:
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(i) The representations and warranties made by the
undersigned in Section 6 hereof shall be true and correct in all respects
on the date of the Closing with the same force and effect as if they had
been made on and as of said date, and the undersigned shall have
performed and complied with all obligations, agreements and conditions
herein required to be performed by the undersigned on or before the
Closing.
(ii) All authorizations, approvals, or permits, if any,
of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful sale and
issuance of the Shares pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing. No stop order
or other order enjoining the sale of the Shares shall have been issued
and no proceedings for such purpose shall be pending or, to the knowledge
of the Company, threatened by the SEC or any commissioner of corporations
or similar officer of any state having jurisdiction over this
transaction. At the time of the Closing, the sale and issuance of the
Shares shall be legally permitted by all laws and regulations to which
the undersigned and the Company are subject.
8. LEGEND. Each certificate for Shares will be imprinted with a
legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED
FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO SUCH SECURITIES
IS THEN IN EFFECT, OR, IN THE OPINION OF COUNSEL, SUCH REGISTRATION UNDER
THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED."
9. BROKERS. The undersigned has not entered into any agreement to
pay any broker's or finder's fee to any person with respect to this Agreement or
the transactions contemplated hereby.
10. FILING OF REPORTS. The Company will, so long as it has securities
registered pursuant to Section 12 of the 1934 Act or has securities registered
pursuant to the Securities Act, make timely filing of such reports as are
required to be filed by it with the SEC so that Rule 144 under the Securities
Act or any successor provision thereto will be available to the security holders
of the Company who are otherwise able to take advantage of the provisions of
such Rule.
11. WAIVER, AMENDMENT. Neither this Agreement nor any provisions
hereof shall be modified, changed, discharged or terminated except by an
instrument in writing, signed by the party against whom any waiver, change,
discharge or termination is sought, and any
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waiver, change, discharge or termination shall be effective only to the
extent specifically set forth in such writing.
12. ASSIGNABILITY. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or the undersigned without the prior written
consent of the other party.
13. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
14. SECTION AND OTHER HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which together shall be deemed to be one and the
same agreement.
16. NOTICES. All notices and other communications provided for
herein shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid:
(a) If to the Company, to it at the following address:
GalaGen Inc.
0000 Xxx Xxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000-0000
Attn: Chief Executive Officer
(b) If to the undersigned, the address set forth on the
signature page hereto;
or at such other address as either party shall have specified by notice in
writing to the other.
17. BINDING EFFECT. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns.
18. REGISTRATION RIGHTS. The Company and the undersigned agree that
the undersigned shall have the benefit of the registration rights as set forth
in the Registration Rights Agreement of even date herewith, in the form attached
as Appendix A hereto (the "Registration Rights Agreement"), with respect to the
Shares.
19. SURVIVAL. All representations, warranties and covenants contained
in this Agreement shall survive (i) the acceptance of the subscription by the
Company and (ii) if the undersigned is an individual, the death or disability of
the undersigned.
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20. NOTIFICATION OF CHANGES. The undersigned hereby covenants and
agrees to notify the Company upon the occurrence of any event prior to the
Closing of the purchase of the Shares pursuant to this Agreement which would
cause any representation, warranty, or covenant of the undersigned contained
in this Agreement to be false or incorrect.
21. ENTIRE AGREEMENT. This Agreement, the Appendices hereto, and
the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement among the parties with regard to the subjects
hereof and no party shall be liable or bound to any other party in any manner
by any representations, warranties, covenants, or agreements except as
specifically set forth herein or therein. Nothing in this Agreement, express
or implied, is intended to confer upon any party, other than the parties
hereto and their respective successors and assigns, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided herein.
22. SEPARABILITY. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, it shall to the extent practicable be
modified so as to make it valid, legal and enforceable and to retain as
nearly as practicable the intent of the parties, and the validity, legality,
and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
23. DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power, or remedy accruing to either party or its respective successors
and assigns upon any breach, default or noncompliance of the other party
hereto under this Agreement shall impair any such right, power, or remedy,
nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of any similar breach, default
or noncompliance thereafter occurring. It is further agreed that all
remedies, either under this Agreement, by law, or otherwise afforded to
either party shall be cumulative and not alternative.
24. PREVAILING PARTY. If legal action is brought by, or on behalf
of, either party to enforce or interpret this Agreement, the prevailing party
shall be entitled to recover its attorneys' fees and legal costs in
connection therewith.
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement and Investment Letter this ____ day of ________________, 1999.
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Signature
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Print Name
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Number and Street
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City, State and Zip
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Subscriber's Social Security
or Tax Identification Number
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Signature of Co-owner if applicable
If Joint Ownership, check one (all parties must sign above):
( ) Joint Tenants with ( ) Tenants in Common
Right of Survivorship
( ) Community Property
If Fiduciary, Corporation or Partnership, check one:
( ) Trust ( ) Estate ( ) Power of Attorney
( ) Corporation ( ) Partnership
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Accepted as of __________,1999
GALAGEN INC.
By:
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Name:
-----------------------------------
Title:
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