Exhibit 1.1
DEALER MANAGER AGREEMENT
April 6, 2000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
As Dealer Manager,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
Chiron Corporation, a Delaware corporation (the "Offeror"), proposes
to offer to exchange (such exchange offer, as it may from time to time be
amended and supplemented, the "Exchange Offer") up to $243,800,000 aggregate
principle amount of % Convertible Subordinated Notes due May , 2007
that are convertible into common stock, par value $0.01 per share, (the
"Shares") of the Offeror (the "Exchange Notes") in exchange for up to
$243,800,000 aggregate principle amount of maturity of 1.90% Convertible
Subordinated Notes due November 17, 2000 (the "Existing Notes") of the
Offeror and cash on the terms and subject to the conditions set forth in the
exchange offer materials (collectively, the "Exchange Offer Material"),
copies of which have been delivered to you, namely:
(a) The Registration Statement (as defined in Section 5(a)
hereof);
(b) The Prospectus (as defined in Section 5(a) hereof);
(c) The Schedule TO, filed April 6, 2000, including each
amendment or supplement thereto;
(d) The Form of Letter of Transmittal (the "Letter of
Transmittal") to be used by holders tendering Existing Notes pursuant to the
Exchange Offer and a specimen thereof to be sent by brokers, securities dealers,
commercial banks, trust companies and nominees to their clients for whom they
hold Existing Notes, including guidelines for certification of Taxpayer
Identification Number on Substitute Form W-9;
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(e) The form of letter, filed April 6, 2000, from you
to brokers, securities dealers, commercial banks, trust companies and
nominees, and form of letter, filed April 6, 2000, from brokers,
securities dealers, commercial banks, trust companies and nominees to clients
relating to the Exchange Offer;
(f) The form of any press release relating to the Exchange
Offer filed as an exhibit to the Schedule TO and any amendment or supplement
to the Schedule TO.
For each $1,000 principal amount of Existing Notes accepted for
exchange, the holder of such Existing Notes will receive $1,000 principal amount
of Exchange Notes plus an amount of cash to be set as described in the Exchange
Offer Material. Capitalized terms used herein without definition shall have
their respective meanings set forth in the Exchange Offer Material.
1. APPOINTMENT OF DEALER MANAGER. The Offeror hereby appoints you
exclusively, and you hereby accept appointment, as the Dealer Manager and
financial advisor in connection with the Exchange Offer and authorizes you to
act on its behalf in accordance with this Agreement and the terms of the
Exchange Offer Material, which Exchange Offer Material has been or will be
prepared by, or with the approval of, the Offeror and has been or will be filed
with the Securities and Exchange Commission (the "Commission") pursuant to the
requirements of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Act"), and the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"). You and any other broker or securities dealer or any commercial
bank or trust company are authorized to use the Exchange Offer Material in
connection with the solicitation of tenders along with such other offering
materials and information as the Offeror may prepare or approve ("Other
Material"). You agree to furnish no written material to holders in connection
with the Exchange Offer, other than the Exchange Offer Material and Other
Material. It is understood that nothing in this agreement nor the nature of your
services shall be deemed to create a fiduciary or agency relationship between
you and the Offeror.
2. SOLICITATION OF TENDERS. You agree to use your best efforts
to solicit tenders of Existing Notes pursuant to the Exchange Offer. Neither
you nor any of your affiliates, partners, directors, officers, agents,
employees or controlling persons (if any) shall have any liability to the
Offeror or any other person for any act or omission on the part of any
securities broker or dealer (other than yourselves), commercial bank or trust
company that solicits tenders, and neither you nor any of such other persons
or entities referred to above shall have any liability to the Offeror or any
person asserting claims on behalf of or in right of the Offeror in connection
with or as a result of either your engagement or any matter referred to in
this Agreement except to the extent that such liability results from your
gross negligence or bad faith in performing the services that are the subject
of this Agreement. In soliciting tenders, no securities broker or dealer
(other than yourselves), commercial bank or trust company shall be deemed to
act as your agent or the agent of the Offeror, and you, as Dealer Manager,
shall not be deemed the agent of any other securities broker or dealer or of
any commercial bank or trust company.
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3. COVENANTS OF THE OFFEROR. The Offeror covenants and agrees
with you that:
(a) The Offeror shall prepare the Prospectus in a form approved by
you, such approval not be to unreasonably withheld, and timely file such
Prospectus with the Commission following its preparation. The Offeror shall not
make any amendment or supplement to the Registration Statement or Prospectus
unless such amendment or supplement shall have been approved by you, such
approval not to be unreasonably withheld. The Offeror shall advise you, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or when any
supplement to the Prospectus or any amended Prospectus has been filed and shall
furnish you with copies thereof. The Offeror shall file timely all reports and
any definitive proxy or information statements required to be filed by the
Offeror with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for as long as the
delivery of a prospectus is required in connection with the offering or sale of
the Exchange Notes. The Offeror shall advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
Prospectus, of the suspension of the qualification of the Exchange Notes for
offering or sale in any jurisdiction, of the initiation or threat of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
Prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order. The Offeror shall file timely
all Other Material required to be filed by the Offeror with the Commission
pursuant to Rule 13e-4(c)(2) of the Exchange Act and for so long as such filing
is required in connection with the Exchange Offer.
(b) The Offeror will cause to be delivered to each registered
holder of any Existing Notes, as soon as practicable, a copy of the Prospectus
and the Letter of Transmittal, together with a return envelope, and other
appropriate Exchange Offer Material and Other Material, if any. Thereafter, to
the extent practicable until two days prior to the expiration of the Exchange
Offer, the Offeror will use its best efforts to cause copies of such material
and a return envelope to be mailed to each person who becomes a registered
holder of any Existing Notes.
(c) The Offeror agrees to furnish you with copies of the Exchange
Offer Material and Other Material, including the Prospectus, in such quantities
as you may reasonably request for use by you in connection with the Exchange
Offer. The Offeror will not amend or supplement the Exchange Offer Material, or
prepare or approve any Other Material for use in connection with the Exchange
Offer, without your approval, such approval not to be unreasonably withheld.
(d) If the delivery of a prospectus is required at any time in
connection with the offering and sale of the Exchange Notes and if at such time
any event will have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus was
delivered, not misleading or necessary to correct any material statement in any
earlier
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communication with respect to the Exchange Offer, or, if for any other reason it
will be necessary during such period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify you
and upon your request to file such document and to prepare and furnish without
charge to you as many copies as you may from time to time reasonably request of
an amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance.
(e) The Offeror will promptly from time to time take such
action as you may reasonably request, after consultation with the Offeror, to
qualify the Exchange Notes for offering and sale under the securities laws of
such domestic jurisdictions as you may reasonably request, and to comply with
the laws of such jurisdiction so as to permit the continuance of sales and
dealings therein in these jurisdictions for so long as may be necessary to
complete the distribution of the Exchange Notes; provided that in connection
therewith the Offeror will not be required to qualify as a foreign
corporation or file a general consent to service of process in any
jurisdiction.
(f) The Offeror agrees to furnish to you, to the extent the same
is available to the Offeror, cards or lists or copies thereof showing the names
and addresses of, and numbers of Existing Notes held by, the registered holders
of Existing Notes as of a recent date, and will use its best efforts to advise
you from day to day during the period of the Exchange Offer as to any transfers
of record of Existing Notes. You agree to use such information only in
connection with the Exchange Offer and not to furnish such information to any
other person except in connection with the Exchange Offer.
(g) The Offeror will arrange for the Exchange Agent named in the
Letter of Transmittal to inform you during each business day during the Exchange
Offer (to be followed on a daily basis by written confirmation) as to the number
of Existing Notes that have been tendered pursuant to the Exchange Offer during
the interval since its previous daily report to you under this provision, and
the names and addresses of any registered holders tendering $50,000 aggregate
principle amount or more in Existing Notes.
(h) During a period of three years from the effective date of
the Registration Statement, the Offeror will furnish to you copies of all
reports or other communications (financial or other) furnished to
stockholders, except to the extent such material is made publicly available,
and deliver to you (i) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Offeror
is listed, except to the extent such material is made publicly available; and
(ii) such additional information concerning the business and financial
condition of the Offeror as you may from time to time reasonably request
(such financial statements to be on a consolidated basis to the extent the
accounts of the Offeror and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission).
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(i) The Offeror will make generally available to its
securityholders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act) an earning statement of the Offeror and
its subsidiaries (which need not be audited) complying with Section 11(a) of
the Act (including, at the Offeror's option, Rule 158 thereunder).
(j) The Offeror will advise you promptly as soon as the Offeror
becomes aware of, and takes into consideration, the occurrence of any event
which would be reasonably likely to cause the Offeror to withdraw, rescind or
modify the Exchange Offer and, in any event and without limitation, the Offeror
will promptly advise you of any litigation or governmental action with respect
to the Exchange Offer.
(k) Neither the Offeror nor any entity controlled, directly or
indirectly, by the Offeror has taken, or will take, directly or indirectly, any
action which is designed to or which has constituted or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any security of the Offeror to facilitate the sale or resale of the Exchange
Notes in connection with the Exchange Offer.
(l) The Offeror will use its best efforts to cause its executives,
officers and directors to agree not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any Common Stock (including
Common Stock from option exercises) during the five (5) day stock price
averaging period as described in the Exchange Offer Material, without your
consent; provided, however, any such individual may dispose of up to fifteen
percent (15%) of that individual's holdings up to an aggregate total of two
(2) million shares.
4. COMPENSATION AND EXPENSES.
(a) The Company shall pay to you, as compensation for your
services as Dealer Manager and financial advisor, the greater of (i) $500,000 or
(ii) 0.75% of the aggregate principle amount at maturity of all Existing Notes
tendered. Such fee shall be payable concurrently with the exchange of Existing
Notes for Exchange Notes under the Exchange Offer. If the Exchange Offer is not
completed for any reason, the Offeror shall not pay you any compensation for
your services as Dealer Manager and/or financial advisor.
(b) Whether or not any Existing Notes are acquired pursuant to the
Exchange Offer, the Offeror shall pay all expenses incident to the performance
of the Offeror's obligations hereunder and under the Exchange Offer, including,
without limiting the generality of the foregoing, all costs and expenses
(i) incurred by brokers and dealers (including yourselves), commercial banks,
trust companies and nominees for their customary mailing and handling
expenses incurred in forwarding the Exchange Offer Material and any Other
Material to their customers, (ii) incident to the preparation, issuance,
execution and delivery of the Exchange Notes to be delivered in connection
with the Exchange Offer, (iii) incident to the preparation, printing and
filing under the Act of the Registration Statement and the Prospectus and any
other Exchange Offer Materials or Other Materials (including all exhibits,
amendments and supplements thereto), (iv) incurred in connection with the
registration or qualification of the
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Exchange Notes under the laws of such domestic jurisdictions as you may
reasonably designate (including reasonable fees and disbursements of your
counsel), (v) related to the filing with the National Association of
Securities Dealers, Inc., (vi) in connection with the preparation and
printing (including word processing and duplication costs) and delivery of
all Exchange Offer Material and any Other Material (including this Agreement)
including mailing and shipping, as herein provided, (vii) incident to the
appointment of the Exchange Agent and the Information Agent, including the
fees and expenses of the Exchange Agent and the Information Agent, (x) all
advertising costs and (xi) any applicable transfer taxes payable in
connection with the Exchange Offer and the transactions contemplated thereby.
The Offeror will reimburse you for all your expenses incurred in connection
with your services under this Agreement including, without limitation, your
out-of-pocket expenses and the reasonable fees and disbursements of your
counsel and any expenses incurred as a result of presenting testimony or
evidence, or preparing to present testimony or evidence in connection with
any court or government proceeding arising out of the Exchange Offer.
5. CERTAIN REPRESENTATIONS AND WARRANTIES BY THE OFFEROR. The
Offeror represents and warrants to you that, except to the extent otherwise
disclosed in the Exchange Offer Material and Other Material:
(a) Prior to commencement, a registration statement on Form S-4
(Registration No. 333- (the "Initial Registration Statement") in respect
of the Exchange Notes will have been filed with the Commission; as of
Closing, the Initial Registration Statement (as may be amended before it
becomes effective) and any post-effective amendment thereto, each in the form
delivered to you prior to or at the Closing, and, including all exhibits
thereto and all documents incorporated by reference into the prospectus
contained therein will have been declared effective by the Commission in such
form; no other document with respect to such registration statement
(including all documents incorporated by reference into the prospectus
contained therein) will have been previously filed with the Commission; and
no stop order suspending the effectiveness of the Initial Registration
Statement or any post-effective amendment thereto, if any, will have been
issued and no proceeding for that purpose will have been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act, is
herein called a "Preliminary Prospectus"); the various parts of the Initial
Registration Statement, including all exhibits, annexes and schedules thereto
and including (i) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 2(a) hereof and (ii) the documents incorporated by reference
into the prospectus contained in the Initial Registration Statement at the
time such part of the registration statement becomes effective, each as
amended at the time such part of the registration statement becomes
effective, is herein collectively called the "Registration Statement"; and
such final prospectus, in the form included in the Registration Statement at
the time it becomes effective or is first filed pursuant to Rule 424(b) under
the Act, is hereinafter called the "Prospectus"; and any reference herein to
any Preliminary Prospectus or the Prospectus will be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 11
of Form S-4 under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any document filed after the date of such Preliminary
Prospectus or
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Prospectus, as the case may be, under the Exchange Act, and incorporated by
reference into such Preliminary Prospectus or Prospectus, as the case may be;
and any reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report on Form 10-K of the Offeror
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by
reference into the Registration Statement;
(b) As of Closing, no order preventing or suspending the use of
any Initial Registration Statement (including any Preliminary Prospectus)
will have been issued by the Commission, and each Preliminary Prospectus, at
the time of filing thereof, will conform in all material respects to the
requirements of the Act, and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or necessary to
correct any material statement in any earlier communication made with respect
to the Exchange Offer; provided, however, that this representation and
warranty will not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Offeror by you
as Dealer Manager, expressly for use therein;
(c) The documents incorporated by reference into the
Prospectus, when they became effective or were filed with the Commission, as
the case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act , as applicable, and the rules and regulations of
the Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein , in light of the circumstances under which they were
made, not misleading or necessary to correct any material statement in any
earlier communication made with respect to the Exchange Offer; provided,
however, that this representation and warranty will not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Offeror by you as Dealer Manager,
expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto, and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in
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reliance upon and in conformity with information furnished in writing to the
Offeror by you as Dealer Manager, expressly for use therein;
(e) The Offeror and its subsidiaries, taken as a whole, have
not sustained since the date of the latest audited financial statements
included in, or incorporated by reference into, the Prospectus any material
loss or interference with their business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
has not been any change in the capital stock or long-term debt of the Offeror
or its Material Subsidiary or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Offeror and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(f) The Offeror has a valid leasehold interest in, or ownership
of, all real property material to the conduct of its business as currently
conducted;
(g) The Offeror has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation, with the corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of business
in, and is in good standing under the laws of, each other jurisdiction in
which it owns or leases properties, or conducts any business so as to require
such qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and the
Material Subsidiary of the Offeror has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation;
(h) The Offeror has an authorized capitalization as set forth
under the caption "Capitalization" in the Prospectus, and all of the issued
shares of capital stock of the Offeror have been duly and validly authorized
and issued, and are fully paid and nonassessable and the Existing Notes
conform to the description under the caption "Description of Existing Notes"
and the Exchange Notes, when issued, will conform to the description under
the caption "Description of Exchange Notes," each description respectively
contained in, or incorporated by reference into, the Prospectus; and all of
the issued shares of capital stock of the Material Subsidiary of the Offeror
have been duly and validly authorized and issued, are fully paid and
nonassessable and (except for directors' qualifying shares and except as set
forth in, or incorporated by reference into, the Prospectus) are owned
directly or indirectly by the Offeror, free and clear of all liens,
encumbrances, equities or claims;
(i) The Exchange Notes have been duly authorized and, when
issued and delivered in exchange for the Existing Notes will be duly
authorized and validly issued;
(j) The execution and delivery of this Agreement by the Offeror
and the compliance by the Offeror with all of the provisions of this Agreement
and the consummation of the transactions
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contemplated herein and in the Exchange Offer Material do not and will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, material loan
agreement, material mortgage, material deed of trust or other material
agreement or instrument to which the Offeror or any of its subsidiaries is a
party or by which the Offeror or any of its subsidiaries is bound or to which
any of the property or assets of the Offeror or any of its subsidiaries is
subject (except such as will not materially affect the Offeror and its
subsidiaries as a whole), nor will such action result in any violation of the
provisions of the Certificate of Incorporation or Bylaws of the Offeror, the
provisions of any agreement among the stockholders of the Offeror, or any
statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Offeror or any of its subsidiaries or
any of their properties (except such as will not materially affect the
Offeror and its subsidiaries as a whole); and no consent, approval,
authorization, order, registration or qualification of or with any such court
or governmental agency or body is required for the execution and delivery by
the Offeror of this Agreement or the consummation by the Offeror of the
transactions contemplated by this Agreement or the consummation of the
Exchange Offer, including, but not limited to, the issuance and delivery of
the Exchange Notes by the Offeror, except for such consents or authorizations
which have been, or as of Closing will be, obtained (including registration
under the Act), or which, if not obtained, will not have a material affect on
the Offeror and its subsidiaries, taken as a whole, and such consents,
approvals, authorizations, registrations or qualifications as may be required
under state or foreign takeover statutes and securities or Blue Sky laws in
connection with the distribution of the Exchange Notes pursuant to the
Exchange Offer;
(k) Neither the Offeror nor its Material Subsidiary is in
violation of its Certificate of Incorporation or Bylaws, in any material
respect, or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
material loan agreement, material mortgage, material deed of trust, material
lease or other material agreement or instrument to which it is a party or by
which it or any of its properties may be bound;
(l) The statements set forth in the Prospectus under the
caption "Description of Exchange Notes," insofar as they purport to
constitute a summary of the terms of the Exchange Notes, and under the
captions "The Exchange Offer," "Description of the Existing Notes" and
"Certain Federal Income Tax Consequences," insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate and complete in all material respects;
(m) The Offeror is not and, after giving effect to the offering
and sale of the Exchange Notes and the consummation of the Exchange Offer,
will not be an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined under the Investment Company
Act of 1940, as amended (the "Investment Company Act");
(n) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the Offeror
or any of its subsidiaries is a party or of which any property of the Offeror
or any of its subsidiaries is the subject which, if determined adversely to
the Offeror or any of its subsidiaries, would, individually or in the
aggregate, be
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reasonably likely to have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of operations
of the Offeror and its subsidiaries, taken as a whole; and, to the best of the
Offeror's knowledge, no such proceedings have been threatened or, though not
threatened, are, to the Offeror's knowledge, imminent;
(o) The Offeror has duly taken all necessary corporate action to
authorize the making and consummation of the Exchange Offer and the execution,
delivery and performance of this Agreement; and this Agreement has been duly
authorized, executed and delivered;
(p) KPMG Peat Marwick, who have certified certain financial
statements of the Offeror and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(q) The Offeror has made or will make appropriate arrangements
with The Depository Trust Company and any other "qualified" registered
securities depository to allow for the book-entry transfer of tendered Existing
Notes between depository participants and the Exchange Agent.
(s) The Offeror has no subsidiaries which fall under the
definition contained in Regulation S-X Rule 1-02(w) (the definition of
"significant subsidiary"), except those listed on Schedule A, attached hereto
and referred to throughout this Agreement as "Material Subsidiary."
6. CONDITIONS OF OBLIGATION. Your obligation to act as Dealer
Manager hereunder will at all times be subject, in your discretion, to the
conditions that:
(a) All representations and warranties of the Offeror contained
herein are as of the date of this Agreement, and at all times during the
Exchange Offer through the Closing Date, will be true and correct in all
material respects.
(b) The Offeror at all times during the Exchange Offer will have
performed all of its obligations hereunder theretofore to be performed.
(c) The Prospectus will have been either (i) filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act in accordance with
Section 2(a) hereof or (ii) included in the Registration Statement; no stop
order suspending the effectiveness of the Registration Statement or any part
thereof will have been issued and no proceeding for that purpose will have been
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initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission will have been complied with to
your reasonable satisfaction.
(d) On the Closing Date, general counsel to the Offeror,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, will have furnished to you, as Dealer Manager, an opinion
in form and substance satisfactory to you.
(e) On the Closing Date, Shearman & Sterling will have furnished
to you, as Dealer Manager, an opinion in form and substance satisfactory to you.
(f) The Offeror will have furnished or caused to be furnished
to you, on each of the Commencement Date and the Closing Date, a certificate
or certificates of officers of the Offeror reasonably satisfactory to you as
to the accuracy of the representations and warranties of the Offeror at and
as of such dates, as to the performance by the Offeror of all of its
obligations hereunder to be performed at or prior to such date, as to the
matters set forth in subsections (c) and (d) of this Section and as to such
other matters as you may reasonably request.
(g) (i) Neither the Offeror nor its Material Subsidiary will
have sustained since the date of the latest audited financial statements
included in, or incorporated by reference into, the Prospectus any loss or
interference with their business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court of governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the latest date as of which
information is given in the Prospectus there will not have been any change in
the capital stock or long-term debt of the Offeror or its Material Subsidiary
or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Offeror and its Material Subsidiary,
otherwise than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is, in the judgment
of the Dealer Manager, so material and adverse as to make it impracticable or
inadvisable to proceed with the Exchange Offer or the delivery of Exchange
Notes on the terms and in the manner contemplated in the Exchange Offer
Material.
(h) On or after the date hereof (i) no downgrading will have
occurred in the rating accorded the Offeror's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization will have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Offeror's debt securities.
(j) On or after the Commencement Date there shall not have
occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or The NASDAQ
National Market; (ii) a suspension or material limitation in trading in the
Offeror's securities on The NASDAQ National Market; (iii) a general
moratorium on commercial banking activities declared by either Federal, or
New York or California State authorities; (iv) the outbreak or escalation of
hostilities involving the United
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States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this clause (iv) in the
judgment of the Dealer Manager makes it impracticable or inadvisable to
proceed with the Exchange Offer on the terms and in the manner contemplated
in the Exchange Offer Material; or (v) the occurrence of a material adverse
change in the existing financial, political or economic conditions in the
United States or elsewhere which, in the judgment of the Dealer Manager would
materially and adversely affect the financial markets or the success of the
Exchange Offer.
7. INDEMNITY.
(a) The Offeror agrees (i) to indemnify and hold you harmless
against any losses, damages, liabilities or claims (or actions in respect
thereof) to which you may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities to which you may become
subject, under the Act or otherwise (A) that arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in the Exchange Offer Material or any Other Material, including any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
of the documents incorporated by reference therein, or in any amendment or
supplement to any of the foregoing, or in any press release issued or
authorized by the Offeror, or in any other Written Communications relating to
the Exchange Offer made or authorized by the Offeror and provided to the
public, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein not
misleading, (B) that arise out of or are based upon any breach by the Offeror
of any representations or warranties or failure by the Offeror to comply with
any of its obligations set forth herein, or (C) that arise out of or are
based upon a withdrawal, rescission, termination or modification of or a
failure to make or consummate the Exchange Offer; (ii) to indemnify and hold
you harmless against any and all other losses, damages, liabilities or claims
(or actions in respect thereof) that otherwise arise out of or are based upon
or asserted against you by any person, including stockholders of the Offeror,
in connection with or as a result of your acting as Dealer Manager and
financial advisor in connection with the Exchange Offer or rendering
financial advisory services to the Offeror in connection with the Exchange
Offer or that arise in connection with any other matter in connection with
the Exchange Offer, except to the extent any such losses, damages,
liabilities or claims referred to in this clause (ii) result from your gross
negligence or bad faith in performing the services that are the subject of
this Agreement. In the event that you become involved in any capacity in any
action, proceeding or investigation brought by or against any person,
including stockholders of the Offeror, in connection with any matter referred
to in this Agreement, the Offeror also agrees periodically to reimburse you
for your reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith. The Offeror
also agrees that neither you nor any of your affiliates, nor any partners,
directors, officers, agents, employees or controlling persons (if any), as
the case may be, of you or any such affiliates, shall have any liability to
the Offeror or any person asserting claims on behalf of or in right of the
Offeror for or in connection with any matter referred to in this Agreement
except to the extent that any loss, damage, expense, liability or claim
incurred by the Offeror results from your gross negligence or bad faith in
performing the services that are the subject of this Agreement.
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(b) Promptly after receipt by you of notice of your involvement
in any action, proceeding or investigation, you shall, if a claim in respect
thereof is to be made against the Offeror under subsection (a) of this
Section 7, notify the Offeror in writing of such involvement, but the failure
so to notify the Offeror shall not relieve it from any liability which it may
otherwise have to you under subsection (a) of this Section 7 except and only
to the extent that the Offeror suffers actual prejudice as a result of such
failure, and in no event shall such failure relieve the Offeror from any
obligation to provide reimbursement and contribution to you, except and only
to the extent that the Offeror suffers actual prejudice as a result of such
failure.
(c) If for any reason the indemnification provided for in
subsection (a) of this Section 7 is unavailable or insufficient to hold you
harmless, then the Offeror shall contribute to the amount paid or payable by
you as a result of such loss, damage, expense, liability or claim (or action
in respect thereof) referred to therein in such proportion as is appropriate
to reflect the relative benefits of the Offeror and its stockholders on the
one hand and you on the other hand in the matters contemplated by this
Agreement as well as the relative fault of the Offeror and you with respect
to such loss, damage, expense, liability or claim (or action in respect
thereof) and any other relevant equitable considerations. The relative
benefits of the Offeror and its stockholders on the one hand and you on the
other hand in the matters contemplated by this Agreement shall be deemed to
be in the same proportion as the maximum aggregate value of the consideration
proposed to be paid by the Offeror to acquire Existing Notes pursuant to the
Exchange Offer bears to the maximum aggregate fee proposed to be paid to you
pursuant to Section 4(a) of this agreement as a result of such acquisition of
Existing Notes. The relative fault of the Offeror on the one hand and you on
the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by,
or relating to, the Offeror and its affiliates or you and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Offeror and you agree that it
would not be just and equitable if contribution pursuant to this subsection
(c) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to in this subsection (c).
(d) The agreements contained in Sections 2 and 3, Section 7 and
Section 8 and the representations and warranties of the Offeror set forth in
Section 3 hereof shall survive any termination or cancellation of this
Agreement, any completion of the engagement provided by this Agreement, any
investigation made by or on behalf of you, any of your officers or partners
or any person controlling you, any termination or expiration of the Exchange
Offer and any acquisition of Existing Notes, whether pursuant to the Exchange
Offer or otherwise.
(e) The reimbursement, indemnity and contribution obligations
of the Offeror under this Section 7 shall be in addition to any liability
that the Offeror may otherwise have, shall extend upon the same terms and
conditions to your affiliates and the partners, directors, officers, agents,
employees and controlling persons (if any), as the case may be, of you and
any such affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Offeror, you,
any such affiliate and any such other person referred to above. Prior to
entering into any agreement or arrangement with respect to, or effecting, any
13
proposed sale, exchange, dividend or other distribution or liquidation of all or
a significant portion of its assets in one or a series of transactions or any
significant recapitalization or reclassification of its outstanding securities
that does not directly or indirectly provide for the assumption of the
obligations of the Offeror set forth in this Section 7, the Offeror will notify
you in writing thereof (if not previously so notified) and, if requested by you,
shall arrange in connection therewith alternative means of providing for the
obligations of the Offeror set forth in this Section 7, including the assumption
of such obligations by another party, insurance, surety bond or the creation of
an escrow, in each case in an amount and upon terms and conditions satisfactory
to you. In any event, if the obligations of the Offeror set forth in this
Section 7 are not assumed by operation of law or by contract by a party or
parties satisfactory to you, the Offeror agrees to arrange alternative means of
providing for such obligations, including providing insurance or creating an
escrow, in each case in an amount and upon terms and conditions satisfactory to
you.
8. MISCELLANEOUS.
(a) This Agreement is made solely for the benefit of you, the
Offeror and any partner, director, officer, agent, employee, affiliate or
controlling person referred to in Section 7 hereof, and their respective
successors, assigns, heirs and legal representatives, and no other person will
acquire or have any right under or by virtue of this Agreement, but, in any
event, nothing in this section shall be deemed to give any rights to an
individual in his individual capacity as an Existing Note holder.
(b) In the event that any provision hereof will be determined to
be invalid or unenforceable in any respect, such determination will not affect
such provision in any other respect or any other provision hereof, which will
remain in full force and effect.
(c) Except as otherwise expressly provided in this Agreement,
whenever notice is required by the provisions of this Agreement to be given to
(I) the Offeror, such notice will be in writing addressed to the Offeror at its
address set forth in the Registration Statement, Attention: Secretary; and (ii)
you, such notice will be in writing addressed to you, at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, facsimile number (212) 902- 4103, Attention: Registration
Department.
(d) This Agreement contains the entire understanding of the
parties with respect to your acting as Dealer Manager of the Exchange Offer to
the Offeror, superseding all prior agreements, understandings and negotiations
with respect to such activities by you. This Agreement may be executed in any
number of separate counterparts, each of which will be an original, but all such
counterparts will together constitute one and the same agreement.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS. Any right to trial by jury with respect to any action or
proceeding arising in connection with or as a result of either your engagement
or any matter referred to in this Agreement is hereby waived by the parties
hereto. The Offeror agrees that any suit or proceeding arising in respect of
this Agreement or our
14
engagement will be tried exclusively in the U.S. District Court for the Southern
District of New York or, if that court does not have subject matter
jurisdiction, in any state court located in The City of New York and the Offeror
agrees to submit to the jurisdiction of, and to venue in, such courts.
(f) Time will be of the essence of this Agreement. As used herein,
the term "business day" will mean any day when the Commission's office in
Washington, D.C. is open for business.
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Please sign and return to us a duplicate of this letter, whereupon it
will become a binding agreement.
Very truly yours,
Chiron Corporation
By___________________________
[Title]
The undersigned hereby confirms that the foregoing
letter agreement, as of the date thereof, correctly
sets forth the agreement between the Offeror
and the undersigned.
________________________________
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
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SCHEDULE A
Material Subsidiary
1. Chiron Investment Corporation
A-1