EXHIBIT 10.723
DEBENTURE PURCHASE AGREEMENT
DEBENTURE PURCHASE AGREEMENT dated as of June 22, 1990 by and between CHIRON
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware ("Seller"), and CIBA-GEIGY, LIMITED, a corporation organized and
existing under the laws of Switzerland ("Purchaser").
WITNESSETH:
WHEREAS, Seller has filed a Registration Statement on Form S-3 (File No.
33-34918) with the Securities and Exchange Commission to register $121,500,000
aggregate principal amount of convertible subordinated debentures due 2015 (as
amended at the time it becomes effective, including any information deemed to be
a part thereof pursuant to Rule 430A, the "Registration Statement");
WHEREAS, Seller has entered into an Underwriting Agreement of even date
herewith (the "Underwriting Agreement") with Morgan Stanley & Co. Incorporated,
Robertson, Stephens & Company and Montgomery Securities (collectively, the
"Underwriters") providing for an underwritten public offering of $100,000,000
aggregate principal amount of convertible subordinated debentures due 2015
($115,000,000 if the Underwriters' overallotment option is exercised in full);
and
WHEREAS, Purchaser wishes to purchase, and Seller wishes to sell, $6,500,000
aggregate principal amount of debentures covered by the Registration Statement
(the "Debentures"), subject to the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Purchaser and Seller hereby agree as follows:
I. SALE OF DEBENTURES
1.1 DEBENTURES TO BE SOLD. Subject to the terms and conditions of this
Agreement, at the Closing (as hereinafter defined), Seller will sell, issue and
deliver the Debentures to Purchaser.
1.2 CONSIDERATION. Subject to the terms and conditions of this Agreement,
at the Closing Purchaser will deliver to Seller the aggregate purchase price for
the Debentures of $6,500,000 (the "Purchase Price") which price represents 100%
of the price at which the debentures to be sold concurrently by the Seller to
the Underwriters pursuant to the Underwriting Agreement will be sold to the
public. The Purchase Price will be paid by wire transfer to an account
designated by Seller.
1.3 CLOSING. The Closing of the transactions contemplated by this
Agreement (the "Closing") will be contingent upon and will take place at the
same time and the same place as the closing referred to in Section III of the
Underwriting Agreement. At the Closing:
(a) Purchaser shall deliver to Seller the following:
(i) the Purchase Price; and
(ii) the certificate(s) described in Paragraph 6.4.
(b) Seller shall deliver to Purchaser the following:
(i) a debenture certificate representing the Debentures;
(ii) a copy of the prospectus in the form first used to confirm sales of
the debentures by the Underwriters (the "Prospectus");
(iii) the certificates described in Paragraph 5.4;
(iv) the opinions of counsel described in Paragraph 5.5; and
(v) the accountant's comfort letter described in Paragraph 5.6.
II. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents, covenants and warrants to Seller as follows:
2.1 AUTHORIZATION. Purchaser has taken all action required by law to
authorize the execution and delivery of this Agreement and the transactions
contemplated hereby. Upon execution, this Agreement is a valid and binding
obligation of Purchaser enforceable in accordance with its terms, except that
(i) such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and (ii) the remedies of specific performance and injunctive
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding may be brought.
2.2 NO VIOLATION. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will violate or
conflict with, or constitute a default under, or cause the acceleration of the
maturity of any debt obligation pursuant to, any agreement or commitment to
which Purchaser is a party or by which Purchaser is bound.
2.3 INFORMATION. Purchaser acknowledges that Purchaser (i) received a copy
of Seller's prospectus (subject to completion) issued May 16, 1990, and (ii) has
had the opportunity to obtain any additional information necessary to verify the
information received. Purchaser understands the speculative nature of the
Debentures and the financial risks with respect thereto.
2.4 LITIGATION. There is no action, suit, inquiry, proceeding or
investigation by or before any court or governmental or other regulatory or
administrative agency or commission pending or, to the best of Purchaser's
knowledge, threatened against Purchaser, that questions or challenges the
validity of this Agreement.
2.5 CONSENTS AND GOVERNMENTAL APPROVALS. No consent, approval, or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority is required in connection with Purchaser's execution and
delivery of this Agreement and consummation of the transactions contemplated
hereby.
2.6 INVESTMENT INTENT. Purchaser is acquiring the Debentures for its own
account for investment and not with a present view to, or for sale in connection
with, any distribution of the Debentures or of the Common Stock issuable upon
conversion thereof.
III. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents, covenants and warrants to Purchaser as follows:
3.1 AUTHORIZATION. Seller has taken all action required by law to
authorize the execution and delivery of this Agreement and consummation of the
transactions contemplated hereby. Upon execution, this Agreement will be a valid
and binding obligation of Seller enforceable in accordance with its terms,
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights, and (ii) the remedies of specific performance and
injunctive relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding may be brought.
3.2 NO VIOLATION. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will violate or
conflict with, or constitute a default under, or cause the acceleration of the
maturity of any debt obligation pursuant to, any agreement or commitment to
which Seller is a party or by which Seller is bound.
2
3.3 DEBENTURES. Upon issuance the Debentures will be entitled to the
benefits of the Indenture dated as of July 2, 1990 between Seller and
Manufacturers Hanover Trust Company of California. Except for this Agreement,
there are no outstanding options, rights, or agreements of any kind relating to
the issuance, sale or transfer of the Debentures.
3.4 LITIGATION. There is no action, suit, inquiry, proceeding or
investigation by or before any court or governmental or other regulatory or
administrative agency or commission pending or, to the best of Seller's
knowledge, threatened against Seller that questions or challenges the validity
of this Agreement.
3.5 CONSENTS AND GOVERNMENTAL APPROVALS. No consent, approval, or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority is required in connection with Seller's execution and
delivery of this Agreement and consummation of the transactions contemplated
hereby.
IV. COVENANTS
4.1 COVENANTS OF PURCHASER. Purchaser hereby covenants and agrees with
Seller that it will use its best efforts to insure that the conditions set forth
in Article VI hereof are satisfied prior to the Closing insofar as such matters
are within Purchaser's control.
4.2 COVENANTS OF SELLER. Seller hereby covenants and agrees with Purchaser
that (i) it will use its best efforts to insure that the conditions set forth in
Article V hereof are satisfied insofar as such matters are within Seller's
control, and (ii) after the Closing, Seller shall from time to time, at the
request of Purchaser, execute and deliver such other instruments and documents
and take such other actions as Purchaser may reasonably request to more
effectively consummate the transactions contemplated by this Agreement.
V. CONDITIONS TO PURCHASER'S OBLIGATIONS
Each and every obligation of Purchaser under this Agreement on or before the
Closing shall be subject to the satisfaction, on or before the Closing, of each
of the following conditions, unless waived in writing by Purchaser:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Seller contained herein shall be true and accurate in all material respects at
and as of the date when made and at and as of the Closing as though such
representations and warranties were made at and as of such date.
5.2 PERFORMANCE. Seller shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with on or prior to the Closing.
5.3 PROCEEDING OR LITIGATION. No suit, action, investigation, inquiry,
appeal or other proceeding by any governmental body or other person or legal or
administrative proceeding shall have been instituted or threatened that
questions the validity or legality of the transactions contemplated hereby.
5.4 CERTIFICATES. Seller shall have furnished Purchaser with such
certificates of officers of Seller dated the Closing date (i) evidencing
compliance with the conditions set forth in this Article V as may be reasonably
requested by Purchaser, and (ii) stating that no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings for
such purpose are pending before or threatened by the Securities and Exchange
Commission, and that there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
3
condition, financial or otherwise, or in the earnings, business or operations,
of the Seller and its subsidiaries, taken as a whole, from that set forth in the
Registration Statement and the Prospectus, as amended or supplemented.
The officer signing and delivering such certificates may rely upon the best
of his knowledge as to proceedings threatened.
5.5 OPINIONS OF COUNSEL.
(a) Seller shall have furnished Purchaser with an opinion of Brobeck,
Phleger & Harrison dated the date of the Closing to the effect set forth in
Section IV(b) (i)-(vii) and (x)-(xiv) of the Underwriting Agreement. In
addition, such opinion will state:
(i) that this Agreement has been duly authorized, executed and delivered
by Seller and is a valid and binding agreement of Seller; and
(ii) that the execution and delivery by Seller of, and the performance
of its obligations under, this Agreement, the Debentures and the Indenture
will not contravene any provision of applicable law or the certificate of
incorporation or by-laws of Seller, or, to the best knowledge of such
counsel, any material agreement or other instrument binding upon Seller or
any of its subsidiaries or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over Seller or any of its property
or any of its subsidiaries or any of their property, and no consent,
approval, authorization or order of or qualification with any governmental
body or agency is required for the performance by Seller of its obligations
under this Agreement, the Debentures and the Indenture, except such as are
specified and have been obtained.
(b) Seller shall have furnished Purchaser with an opinion of Robert
Blackburn, Esq., counsel to the Company, and an opinion of Jane L. Stratton,
Esq., counsel to the Company, each dated the date of Closing, to the effect set
forth in Section IV(d) and Section IV(e), respectively, of the Underwriting
Agreement.
5.6 COMFORT LETTER. Seller shall have furnished Purchaser with a letter
dated the date of Closing from Ernst & Young, independent public accountants,
containing the same statements and information with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the Prospectus as are contained in the letter delivered by Ernst
& Young to the Underwriters pursuant to Section IV(f) of the Underwriting
Agreement.
VI. CONDITIONS TO SELLER'S OBLIGATIONS
Each and every obligation of Seller under this Agreement on or before the
Closing shall be subject to the satisfaction, on or before the Closing, of each
of the following conditions, unless waived in writing by Seller:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Purchaser contained herein shall be true and accurate in all material respects
at and as of the date when made at and as of the Closing as though such
representations and warranties were made at and as of such date.
6.2 PERFORMANCE. Purchaser shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with on or prior to the Closing.
6.3 PROCEEDING OR LITIGATION. No suit, action, investigation, inquiry,
appeal or other proceeding by any governmental body or other person or legal or
administrative proceedings shall have been instituted or threatened that
questions the validity or legality of the transactions contemplated hereby.
4
6.4 CERTIFICATES. Purchaser shall have furnished Seller with such
certificates of officers of Purchaser dated the Closing date evidencing
compliance with the conditions set forth in this Article VI as may be reasonably
requested by Seller.
VII. HOLDBACK
7.1 RESTRICTIONS ON PUBLIC SALE BY THE PURCHASER. In connection with any
public offering by Seller of its securities, Purchaser agrees not to effect any
public sale of the Debentures or shares of Common Stock issued upon conversion
of the Debentures during the ten (10) business days prior to, and during the
90-day period beginning on (i) the effective date of the registration statement
filed in connection with such public offering, or (ii) if applicable, the
commencement of public distribution of the securities of Seller pursuant to such
registration statement, whichever is later, if and to the extent requested by
Seller in the case of a nonunderwritten public offering or if and to the extent
requested by Seller's underwriter in the case of an underwritten public
offering.
VIII. MISCELLANEOUS
8.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement sets forth the entire
understanding of the parties with respect to the transactions contemplated
hereby. This Agreement may be amended, modified and supplemented only by the
written agreement of Purchaser and Seller.
8.2 WAIVER OF COMPLIANCE. Any failure of Purchaser on the one hand, or
Seller, on the other hand, to comply with any obligation, covenant, agreement or
condition herein may be expressly waived in writing by Seller or Purchaser, but
such waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
8.3 NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if (i) delivered by hand, (ii) sent by certified or registered
mail, return receipt requested, with postage prepaid, or (iii) transmitted by
telefax:
(a) If to Purchaser, to:
CIBA-GEIGY, Limited
CH 4002
Basel, Switzerland
Attn: Head of Pharma Division
Telefax: 41-61-696-7487
with a copy to:
CIBA-GEIGY, Limited
Legal Department
Pharma Counsel CH 4002
Basel, Switzerland
Telefax: 41-61-696-5419
or to such other person or address as Purchaser shall furnish to Seller in
writing.
5
(b) If to Seller, to:
Chiron Corporation
4560 Horton Street
Emeryville, CA 94608
Attn: Chief Financial Officer
Telefax: (415) 655-3282
with a copy to:
William G. Green, Esq.
Brobeck, Phleger & Harrison
One Market Plaza, Spear Street Tower
San Francisco, CA 94105
Telefax: (415) 442-1010
or to such other person or address as Seller shall furnish to Purchaser in
writing.
8.4 ASSIGNMENT. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either of the
parties hereto without the prior written consent of the other party.
8.5 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
8.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.7 HEADINGS. The headings of the articles and paragraphs of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
Purchaser:
CIBA-GEIGY, LIMITED
By /s/ F. R. BOCHUD
-----------------------------------
Name: Dr. F. Bochud
Title: DEPUTY DIRECTOR
By /s/ H. GUT
-----------------------------------
Name: Dr. H. Gut
Title: VICE DIRECTOR
Seller:
CHIRON CORPORATION
By
-----------------------------------
Name:
Title:
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
Purchaser:
CIBA-GEIGY, LIMITED
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
Seller:
CHIRON CORPORATION
By /s/ DENNIS L. WINGER
-----------------------------------
Name: Dennis L. Winger
Title: VICE PRESIDENT, FINANCE AND
ADMINISTRATION
8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
Purchaser:
CIBA-GEIGY, LIMITED
By /s/ F. R. BOCHUD
-----------------------------------
Name: Dr. F. Bochud
Title: DEPUTY DIRECTOR
By /s/ H. GUT
-----------------------------------
Name: Dr. H. Gut
Title: VICE DIRECTOR
Seller:
CHIRON CORPORATION
By
-----------------------------------
Name:
Title:
9