Exhibit 10.703
EXECUTION COPY
SUBSCRIPTION AGREEMENT dated as of November 20, 1994
(this "Agreement"), among CIBA-GEIGY LIMITED, a Swiss
corporation ("Ciba"), CIBA-BIOTECH PARTNERSHIP, INC., a
Delaware corporation ("Purchaser") and an indirectly wholly
owned subsidiary of Ciba, CIBA-GEIGY CORPORATION, a New York
corporation ("C Corp"), and CHIRON CORPORATION, a Delaware
corporation (the "Company").
WHEREAS Ciba, C Corp, Purchaser and the Company have entered into
the Investment Agreement dated as of the date hereof (the "Investment
Agreement");
WHEREAS each of Ciba, C Corp, Purchaser and the Company have each
determined to engage in the transactions contemplated by the Investment
Agreement pursuant to which transactions Ciba initially will own a minority
of the then outstanding shares of Common Stock of the Company;
WHEREAS in partial consideration for the Company to enter into
the Investment Agreement and certain related agreements and arrangements,
Purchaser is willing to subscribe to purchase additional Common Shares; and
WHEREAS Purchaser and the Company desire to set forth in this
Agreement their agreement with respect to the purchase by the Purchaser of
shares ("Common Shares") of the Company's Common Stock, $0.01 par value
(the "Common Stock"), as more completely described in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein and for other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties
hereto hereby agree as follows:
SECTION 1. DEFINITIONS; INTERPRETATION. The rules of
interpretation set forth in Section 7.04 of the Investment Agreement shall
apply to this Agreement, and the provisions thereof shall be deemed to be
incorporated by reference herein. As used in this Agreement, the following
terms shall have the following meanings:
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"AFFILIATE" has the meaning assigned to such term in the
Governance Agreement.
"ANCILLARY AGREEMENTS" has the meaning assigned to such term in
the Investment Agreement.
"CLOSING" has the meaning assigned to such term in the Investment
Agreement.
"CLOSING DATE" has the meaning assigned to such term in the
Investment Agreement.
"EXCHANGE ACT" has the meaning assigned to such term in the
Governance Agreement.
"FAIR MARKET VALUE" means, as of any date of determination, the
average of the closing sale prices of Common Shares during the 10 trading
day period immediately preceding such date of determination on the
principal United States securities exchange registered under the Exchange
Act on which Common Shares are listed or, if Common Shares are not listed
on any such exchange, the average of the closing sale prices or the closing
bid quotations of Common Shares during the 10 trading day period preceding
such date of determination on the Nasdaq National Market or any comparable
system then in use or, if no such quotations are available, the fair market
value of Common Shares as of such date of determination as determined in
good faith by a majority of the Independent Directors.
"GOVERNANCE AGREEMENT" has the meaning assigned to such term in
the Investment Agreement.
"HSR ACT" has the meaning assigned to such term in the Investment
Agreement.
"INVESTMENT AGREEMENT" has the meaning assigned to such term
above.
"MARKET PRICE OPTION AGREEMENT" means the Market Price Option
Agreement dated as of the date hereof among Ciba, C Corp, Purchaser and
the Company.
"PERSON" shall have the meaning assigned to such term in the
Governance Agreement.
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"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of the date hereof among Ciba, C Corp, Purchaser and the
Company.
"REQUEST NOTICE" has the meaning assigned to such term in
Section 2(b).
"SEC" has the meaning assigned to such term in the Governance
Agreement.
"SEC DOCUMENTS" shall mean the most recently filed annual report
on Form 10-K of the Company filed with the SEC and each report, schedule,
form, statement and other documents filed by the Company with the SEC
thereafter.
"SECURITIES ACT" has the meaning assigned to such term in the
Governance Agreement.
"SUBSCRIPTION AMOUNT" means, initially, $500,000,000, and,
thereafter, such amount as reduced by the aggregate price paid from time to
time after the Closing by the Purchaser or any of its Affiliates to the
Company or any Subsidiary of the Company for each purchase from the Company
or any Subsidiary of the Company of any Equity Securities by any of them,
whether pursuant to the Market Price Option Agreement, the Governance
Agreement, this Agreement or otherwise except for (i) purchases by the
Purchaser or its Affiliates in connection with collaborations entered into
by Purchaser or its Affiliates and the Company in accordance with the terms
of the Cooperation and Collaboration Agreement dated as of the date hereof
between Ciba and the Company (ii) Equity Securities issued to Ciba or its
Affiliates in accordance with the terms of the Research and Development
Agreement referred to in Section 5.16 of the Investment Agreement.
"SUBSCRIPTION CLOSING" has the meaning assigned to such term in
Section 2(b).
"SUBSCRIPTION CLOSING DATE" has the meaning assigned to such term
in Section 2(b).
"SUBSCRIPTION PERIOD" means the eleven year period commencing
with the Closing Date.
SECTION 2. SALE AND PURCHASE OF SHARES.
(a) Subject to the terms and conditions herein set forth
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and Section 2.04 of the Governance Agreement, the Purchaser agrees to
purchase from the Company, and the Company agrees to sell to Purchaser,
from time to time and at any time during the Subscription Period upon each
request of the Company, Common Shares for an aggregate purchase price at
any Subscription Closing not in excess of the Subscription Amount remaining
as of the applicable Subscription Closing Date.
(b) In order for the Company to request Purchaser to purchase
any of the Shares pursuant to Section 2(a), the Company shall, prior to the
expiration of the Subscription Period, give written notice to Purchaser of
such request (a "Request Notice"), specifying the number of shares to be
purchased (which shall be a number that results in an aggregate purchase of
at least the lesser of $5,000,000 and the then remaining Subscription
Amount) and the place, time and date of the closing of such purchase (each
a "Subscription Closing" or a "Subscription Closing Date"), which date
shall not be less than five business days nor more than ten business days
from the date on which such notice is delivered.
(c) At each Subscription Closing, the Company shall deliver to
Purchaser all of the Common Shares to be purchased by delivery of a
certificate or certificates evidencing such Common Shares in the
denominations designated by Purchaser by notice to the Company given by the
Purchaser prior to the Subscription Closing. Each of such Common Shares
shall bear the legend set forth in Section 3.02(d) of the Investment
Agreement. If at the time of issuance of any Common Shares pursuant hereto,
the Company shall not have redeemed the Rights (as defined in the Rights
Agreement dated as of August 29, 1994, between the Company and Continental
Stock Transfer and Trust Company, as Rights Agent, as the same may be
amended from time to time), then each Common Share issued pursuant hereto
shall have attached to it Rights or new rights with terms substantially the
same as, and at least as favorable to Purchaser as, are provided generally
to holders of shares of Common Stock under the Rights.
(d) Notwithstanding anything in the foregoing to the contrary,
the Company shall have no rights, and Ciba shall have no obligations, under
this Section 2 or Section 3 hereof if during the 10 trading day period (or
the date of determination if no quotes of the type referred to in the
definition of Fair Market Value are available) applicable to
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the determination of the Fair Market Value with respect to any proposed
purchase and sale of Common Shares pursuant to this Agreement the Company
is in possession of any material adverse undisclosed information regarding
the Company that would be required to be disclosed by the Company in a
registration statement under the Securities Act in connection with a public
offering of Common Stock of the Company.
SECTION 3. PAYMENT; FUNDING. (a) In the event the Company
requests, pursuant to Section 2, Purchaser to purchase any Common Shares,
Purchaser shall, at the related Subscription Closing, deliver by wire
transfer to an account designated at least two business days in advance of
such Subscription Closing an amount equal to the Fair Market Value of the
Common Shares being issued and sold by the Company to the Purchaser
determined as of the business day that occurs three business days prior to
such Subscription Closing.
(b) Ciba and/or C Corp shall provide Purchaser on a timely basis
all funds required for Purchaser to fulfill its obligation under this
Agreement to purchase Common Shares.
SECTION 4. REGISTRATION RIGHTS. The Common Shares purchased
pursuant to this Agreement shall be entitled to the registration rights
provided for in the Registration Rights Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES. (a) The Company hereby
represents and warrants to Purchaser as follows:
(i) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by the Board of Directors of the Company and no
other corporate proceedings on the part of the Company are necessary
to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed
and delivered by the Company. Prior to delivery of any Request Notice
pursuant to Section 2(b), the Company will have taken all necessary
corporate and other action to authorize, and to permit it to deliver
the full number of Common Shares purchasable pursuant to such Request
Notice.
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Upon issuance, all of such Common Shares shall be duly authorized,
validly issued, fully paid and nonassessable and will be approved for
quotation on the Nasdaq National Market, or for quotation or listing
on the principal trading market for the Common Shares at the time of
issuance. Upon delivery of such Common Shares they shall be free and
clear of all claims, liens, encumbrances, security interests and
charges of any nature whatsoever and shall not be subject to any
preemptive right of any shareholder of the Company;
(ii) Except for filings under the HSR Act, if applicable, no
filing with, and no permit, authorization, consent or approval of, any
state, Federal or foreign public body or authority is necessary for
the execution of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby (including the
sale of Common Shares hereunder);
(iii) The Company has filed all required reports, schedules,
forms, statements and other documents with the SEC during the current
calendar year and the two prior calendar years. As of their respective
dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and none of the SEC
Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements
of the Company included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates thereof and their
consolidated statements of operations, stockholders equity and cash
flows for the periods then ended
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(subject, in the case of unaudited statements, to normal year-end
audit adjustments);
(iv) Except for filings under the HSR Act, if applicable, neither
the execution and delivery of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby
nor compliance by the Company with any of the provisions hereof shall
(x) conflict with or result in any breach of, or require any vote
under, any provision of the Certificate of Incorporation of the
Company or the By-laws of the Company, (y) result in a violation or
breach of, or constitute (with or without notice or lapse of time or
both) a default (or give rise to any third party right of termination,
cancelation, material modification or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or
obligation to which the Company or any of its Subsidiaries is a party
or by which any of them or any of their properties or assets may be
bound or (z) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Company or its Subsidiaries or
any of their properties or assets, except in the case of (y) or (z)
for violations, breaches or defaults which would not, in the
aggregate, have a material adverse effect on the business, assets,
results of operations or financial condition of the Company and its
subsidiaries taken as a whole or materially impair the ability of the
Company to perform its obligations hereunder; and
(v) This Agreement has been approved by a two-thirds vote of the
"Continuing Directors" (as defined in Article ELEVENTH of the
Company's Certificate of Incorporation).
(b) Each of the Purchaser, Ciba and C Corp hereby represents and
warrants as to itself as follows:
(i) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (including the
exercise of the Option) by the Closing Date will have been duly and
validly authorized by its Board of Directors and no other corporate
proceedings on its part are necessary to authorize this Agreement or
to consummate the transactions
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contemplated hereby. This Agreement has been duly and validly executed
and delivered by it.
(ii) Except for filings under the HSR Act, if applicable,
neither the execution and delivery of this Agreement by it nor the
consummation by it of the transactions contemplated hereby nor
compliance by it with any of the provisions hereof shall (x) conflict
with or result in any breach of, or require any vote under, any
provision of its Certificate of Incorporation or its By-laws, (y)
result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancelation, material modification or
acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, agreement or other
instrument or obligation to which it or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may
be bound or (z) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to it or its Subsidiaries or any of
their properties or assets, except in the case of (y) or (z) for
violations, breaches or defaults which would not, in the aggregate,
have a material adverse effect on the business, assets, results of
operations or financial condition of it and its Subsidiaries taken as
a whole or materially impair its ability to perform its obligations
hereunder.
(c) Purchaser hereby represents and warrants to the Company that
any Common Shares acquired by Purchaser hereunder will be acquired for
investment only and not with a view to any public distribution of all or
any portion thereof, and Purchaser will not offer to sell or otherwise
dispose of all or any portion of such Common Shares in violation of any of
the registration requirements of the Securities Act.
SECTION 6. CONDITIONS PRECEDENT. The Purchaser's obligation to
purchase any Common Shares is subject to the satisfaction as of the
applicable Subscription Closing Date of the following conditions:
(a) The representations and warranties of the Company made in
this Agreement shall be true and correct in all material respects as
of the date of this
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Agreement and as of the applicable Subscription Closing Date with the same
effect as if made at and as of such Subscription Closing Date, except to
the extent such representations and warranties expressly relate to an
earlier time. The Company shall have performed in all material respects the
covenants and agreements of the Company contained in the this Agreement,
the Investment Agreement, the Governance Agreement and each of the other
Ancillary Agreements required to be performed at or prior to the applicable
Subscription Closing and no material breach, or event which would, with the
giving of notice or the passage of time or both, constitute a default,
shall have occurred and be continuing thereunder. Purchaser shall have
received a certificate from a senior officer of the Company dated such
Subscription Closing Date, as to the satisfaction of this Section 6(a).
(b) The Company, Ciba and its Affiliates shall have obtained or
made all consents, approvals, orders, licenses, permits and authorizations
of, and registrations, declarations and filings with, any governmental
authority or any other Person required to be obtained or made by or with
respect to the Company, Ciba or Ciba's Affiliates in connection with such
sale.
(c) There shall not be threatened or pending by any governmental
authority any suit, action or proceeding, and there shall not be pending by
any other Person, any suit, action or proceeding, which has a reasonable
likelihood of success, seeking to restrain or prohibit the issuance and
sale of the applicable Common Shares, and no injunction, decree or order of
any governmental authority shall be in effect as of the applicable
Subscription Closing which would restrain or prohibit the issuance and sale
of the applicable Common Shares.
(d) The issuance and sale of the applicable Common Shares shall
not violate, or cause the violation of, any applicable law or regulations.
(e) Ciba shall not become subject to any materially greater
regulatory requirements or subject its existing investment in the Company
to any additional material restriction due to the increase in its
percentage ownership of the Company resulting from such purchase of Common
Shares, in each case due to
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(1) any change of law regulations after the date hereof or any changed
circumstance arising therefrom or (2) any change in circumstances
due to any action by the Company or any of its Subsidiaries.
(f) The Purchaser shall have received an opinion dated the
applicable Subscription Agreement Closing Date of the General Counsel
of the Company to the effect that the Common Shares being purchased by
the Company on such date are duly authorized, validly issued, fully
paid and nonassessable.
The failure to satisfy any of the foregoing conditions as of any
Subscription Closing Date and the resulting cancellation of the purchase
and sale of the Common Shares proposed to be sold to the Company on such
date shall not prohibit the Company from giving further Request Notices. In
the event that there shall be in effect as of any Subscription Closing any
injunction, decree or order referred to in Section 6(c), the Company or
Purchaser, as applicable, shall use all reasonable efforts to have such
injunction, decree or order vacated, lifted or overturned.
SECTION 7. MISCELLANEOUS. (a) From time to time, at any of the
other parties' request and without further consideration, each party hereto
shall execute and deliver such additional documents, transfers,
assignments, endorsements, consents and other instruments and take all such
further action as may be necessary or desirable to consummate the
transactions contemplated by this Agreement, including, without limitation,
to vest in Purchaser good title to any Common Shares purchased hereunder.
(b) All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
cable, facsimile transmission, telegram or telex or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties and at the addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this
paragraph) specified in Section 7.02 of the Investment Agreement.
(d) No provision of this Agreement may be amended or waived
unless such amendment or waiver is in writing and signed, in the case of an
amendment, by the parties hereto,
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or in the case of a waiver, by the party against whom the waiver is to be
effective.
(e) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
(f) If any term or provision of this Agreement or the
application thereof to either party or set of circumstances shall, in any
jurisdiction and to any extent, be finally held invalid or unenforceable,
such term or provision shall only be ineffective as to such jurisdiction,
and only to the extent of such invalidity or unenforceability, without
invalidating or rendering unenforceable any other terms or provisions of
this Agreement or under any other circumstances, and the parties shall
negotiate in good faith a substitute provision which comes as close as
possible to the invalidated or unenforceable term or provision, and which
puts each party in a position as nearly comparable as possible to the
position it would have been in but for the finding of invalidity or
unenforceability, while remaining valid and enforceable.
(g) The Investment Agreement, the Governance Agreement, the
Registration Rights Agreement, this Agreement and the other Ancillary
Agreements and the agreements contemplated hereby and thereby, constitute
the entire agreement among the parties hereto with respect to the subject
matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, between the parties with respect to
the subject matter hereof.
(h) Neither party to this Agreement shall assign any of its
rights or obligations hereunder without the prior written consent of the
other party hereto, except that Purchaser, Parent and C Corp may assign all
or any of its rights and obligations hereunder to Ciba or to any of Ciba's
wholly owned Subsidiaries but no such assignment shall relieve such parties
of their obligations hereunder.
(i) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and
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nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person, other than the parties hereto and their
respective permitted successors and assigns, any right, benefit or remedy
of any nature or kind whatsoever under or by reason of this Agreement.
(j) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicable to contracts
executed and to be fully performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be brought
by the parties and heard and determined only in a Delaware state court or a
federal court sitting in that State and the parties hereto consent to
jurisdiction before and waive any objectives of venue to the Delaware
Chancery Court.
(k) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which taken together
shall constitute one and the same agreement.
(l) The parties hereto each hereby irrevocably waives all right
to trial by jury in any action, proceeding or counterclaim (whether based
on contract, tort or otherwise) arising out of or relating to this
Agreement or the actions of any party hereto in the negotiation,
administration, performance and enforcement thereof.
IN WITNESS WHEREOF, the Company, Purchaser, Ciba and C Corp have
caused this Agreement to be duly executed as of the day and year first
above written.
CIBA BIOTECH PARTNERSHIP, INC.,
by /s/ McGraw
--------------------------
Name:
Title:
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CHIRON CORPORATION,
by /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name:
Title:
CIBA-GEIGY LIMITED,
by /s/ Xxxx Xxxxxx
--------------------------
Name:
Title:
by /s/ Xxxx Xxxxxxxxx
--------------------------
Name:
Title:
CIBA-GEIGY CORPORATION,
by /s/ McGraw
--------------------------
Name:
Title:
