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Exhibit 4.08    
    

 
 

REGISTRATION RIGHTS AGREEMENT    
    

        THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of June 22, 2004 by and between Chiron Corporation, a Delaware corporation (the "Company"),
and Credit Suisse First Boston LLC and Morgan Stanley & Co. Incorporated (collectively, the "Initial Purchasers"), pursuant to a purchase agreement, dated June 16, 2004 (the "Purchase
Agreement"), between the Company and the Initial Purchasers. In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Purchase Agreement. 

        The
Company agrees with the Initial Purchasers, (i) for their benefit as Initial Purchasers and (ii) for the benefit of the beneficial owners (including the Initial
Purchasers) from time to time of the Securities (as defined herein), and the beneficial owners from time to time of the Underlying Common Stock (as defined herein) issued upon conversion of Securities
(each of the foregoing a "Holder" and together the "Holders"), as follows: 

        SECTION
1.    Definitions.    Capitalized terms used herein without definition shall have their respective meanings
set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 

        "Affiliate" With respect to any specified person, an "affiliate," as defined in Rule 144, of such person. 

        "Business Day" Each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New
York are authorized or obligated by law or executive order to close. 

        "Common Stock" The Common Stock, $0.01 par value, of the Company and any other shares of common stock as may constitute "Common Stock" for
purposes of the Indenture, including the Underlying Common Stock. 

        "Conversion Rate" Conversion Rate shall have the meaning assigned to such term in the Indenture. 

        "Damages Accrual Period" See Section 2(e) hereof. 

        "Damages Payment Date" Each June 30 and December 30. 

        "Deferral Notice" See Section 3(i) hereof. 

        "Deferral Period" See Section 3(i) hereof. 

        "Effectiveness Deadline Date" See Section 2(a) hereof. 

        "Effectiveness Period" The period of two years from the Issue Date or such shorter period ending on the date that all Registrable
Securities have ceased to be Registrable Securities. 

        "Event" See Section 2(e) hereof. 

        "Event Termination Date" See Section 2(e) hereof. 

        "Event Date" See Section 2(e) hereof. 

        "Exchange Act" The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. 

        "Filing Deadline Date" See Section 2(a) hereof. 

        "Holder" See the second paragraph of this Agreement. 

        "Indenture" The Indenture dated as of the date hereof between the Company and U.S. Bank National Association, as trustee, pursuant to
which the Securities are being issued. 

 

        "Initial Purchasers" Credit Suisse First Boston LLC and Morgan Stanley & Co. Incorporated. 

        "Initial Shelf Registration Statement" See Section 2(a) hereof. 

        "Issue Date" means June 22, 2004. 

        "Liquidated Damages Amount" See Section 2(e) hereof. 

        "Losses" See Section 6 hereof. 

        "Material Event" See Section 3(i) hereof. 

        "Notice and Questionnaire" A written notice delivered to the Company containing substantially the information called for by the Selling
Security Holder Notice and Questionnaire attached as Annex A to the Offering Memorandum of the Company dated June 16, 2004 relating to the Securities. 

        "Notice Holder" On any date, any Holder that has delivered a Notice and Questionnaire to the Company on or prior to such date. 

        "Prospectus" The prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 415 promulgated under the Securities Act), as amended or supplemented by any
amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such
Prospectus. 

        "Purchase Agreement" See the first paragraph of this Agreement. 

        "Record Holder" With respect to any Damages Payment Date relating to any Security or shares of Underlying Common Stock as to which any
Liquidated Damages Amount has accrued, the registered holder of such Security or such shares of Underlying Common Stock, as the case may be, on the 15th day prior to such Damages Payment Date. 

        "Registrable Securities" The Securities and the Underlying Common Stock until such securities have been converted or exchanged and, at all
times subsequent to any such conversion or exchange, any securities into or for which such securities have been converted or exchanged, and any security issued with respect thereto upon any stock
dividend, split, merger or similar event until, in the case of any such security, the earliest of (i) its effective registration under the Securities Act and resale in accordance with the
Registration Statement covering it, (ii) expiration of the holding period that would be applicable thereto under Rule 144(k) were it not held by an Affiliate of the Company, or
(iii) its sale to the public pursuant to Rule 144. 

        "Registration Expenses" See Section 5 hereof. 

        "Registration Statement" Any registration statement of the Company that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all materials
incorporated by reference or explicitly deemed to be incorporated by reference in such registration statement. 

        "Restricted Securities" As this term is defined in Rule 144. 

        "Rule 144" Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC. 

        "Rule 144A" Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC. 

        "SEC" The Securities and Exchange Commission. 

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        "Securities" The 23/4% convertible debentures due 2034 of the Company to be purchased pursuant to the Purchase Agreement. 

        "Securities Act" The Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder. 

        "Shelf Registration Statement" See Section 2(a) hereof. 

        "Subsequent Shelf Registration Statement" See Section 2(b) hereof. 

        "Tax Event" shall have the meaning assigned to such term in the Indenture. 

        "TIA" The Trust Indenture Act of 1939, as amended. 

        "Trustee" U.S. Bank National Association (or any successor entity), the Trustee under the Indenture. 

        "Underlying Common Stock" The Common Stock into which the Securities are convertible or issued upon any such conversion or payment of the
purchase price of a purchase of Securities. 

        SECTION
2.    Shelf Registration.    

        (a)   The
Company shall prepare and file or cause to be prepared and filed with the SEC no later than a date which is ninety (90) days after the Issue Date (the "Filing
Deadline Date") a Registration Statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf Registration Statement") registering
the resale from time to time by Holders thereof of all of the Registrable Securities (the "Initial Shelf Registration Statement"). The Initial Shelf Registration Statement shall be on
Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by such Holders in accordance with the methods of distribution reasonably
elected by the Holders and set forth in the Initial Shelf Registration Statement; provided, that in no
event will such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company. The Company shall use reasonable efforts
to cause the Initial Shelf Registration Statement to be declared effective under the Securities Act by the date (the "Effectiveness Deadline Date") that is
one-hundred-and-eighty (180) days after the Issue Date, and to keep the Initial Shelf Registration Statement (or any Subsequent Shelf Registration Statement)
continuously effective under the Securities Act until the expiration of the Effectiveness Period. At the time the Initial Shelf Registration Statement is declared effective, each Holder that became a
Notice Holder on or prior to the date 5 Business Days prior to such time of effectiveness shall be named as a selling security holder in the Initial Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of Registrable Securities in accordance with applicable law (other than laws not generally applicable to
all such Holders). With the exception of Novartis AG, none of the Company's security holders (other than the Holders of Registrable Securities) shall have the right to include any of the Company's
securities in the Shelf Registration Statement. 

        (b)   If
the Initial Shelf Registration Statement or any Subsequent Shelf Registration Statement ceases to be effective for any reason at any time during the Effectiveness
Period, the Company shall use reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner reasonably expected by the Company to obtain the withdrawal of the order suspending the effectiveness thereof, or file an
additional Shelf Registration Statement covering all of the securities that as of the date of such filing are Registrable Securities (a "Subsequent Shelf Registration Statement"). If a Subsequent
Shelf Registration Statement is filed, the Company shall use reasonable efforts to cause the Subsequent Shelf Registration Statement to become effective as promptly as is reasonably practicable after
such filing or, if filed during a Deferral Period, after the expiration of such Deferral Period, and to keep such Registration Statement (or subsequent Shelf Registration Statement) continuously
effective until the end of the Effectiveness Period. 

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        (c)   The
Company shall supplement and amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration Statement, if required by the Securities Act or, to the extent to which the Company does not reasonably object, as reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the registered Holders. 

        (d)   Each
Holder of Registrable Securities agrees that if such Holder wishes to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus,
it will do so only in accordance with this Section 2(d) and Section 3(i). Each Holder of Registrable Securities wishing to sell Registrable Securities pursuant to a Shelf Registration
Statement and related Prospectus agrees to deliver a Notice and Questionnaire to the Company at least five (5) Business Days prior to any intended distribution of Registrable Securities under
the Shelf Registration Statement. From and after the date the Initial Shelf Registration Statement is declared effective, the Company shall, as promptly as practicable after the date a Notice and
Questionnaire is delivered (but in any event within fifteen Business Days of such delivery for the Initial Shelf Registration Statement), (i) if required by applicable law, file with the SEC a
post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment
to any document incorporated therein by reference or file any other document required by the SEC so that the Holder delivering such Notice and Questionnaire is named as a selling security holder in
the Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with
applicable law (other than laws not generally applicable to all Holders of Registrable Securities wishing to sell Registrable Securities pursuant to the Shelf Registration Statement and related
Prospectus) and, if the Company shall file a post-effective amendment to the Shelf Registration Statement, use reasonable efforts to cause such post-effective amendment
to be declared effective under the Securities Act as promptly as is reasonably practicable; (ii) provide such Holder copies of any documents filed pursuant to Section 2(d)(i); and
(iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(d)(i);  provided, that if such Notice and Questionnaire is delivered during a Deferral Period, the Company shall
so inform the Holder delivering such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3(i), provided, further, that if under applicable law the Company has
more than one option as to the type or manner of making any such filing, as set forth in an opinion of nationally-recognized counsel experienced in such matters delivered by the Holder to the Company,
it will make the required filing or filings in the manner or of a type that is reasonably expected to result in the earliest availability of the Prospectus for effecting resales of Registrable
Securities. Notwithstanding anything contained herein to the contrary, the Company shall be under no obligation to name any Holder that is not a Notice Holder as a selling security holder in any
Registration Statement or related Prospectus; provided, however, that any Holder that becomes a Notice
Holder pursuant to the provisions of Section 2(d) of this Agreement (whether or not such Holder was a Notice Holder at the time the Registration Statement was initially declared effective)
shall be named as a selling security holder in the Registration Statement or related Prospectus subject to and in accordance with the requirements of this Section 2(d). 

        (e)   The
parties hereto agree that the Holders of Registrable Securities will suffer damages, and that it would not be feasible to ascertain the extent of such damages with
precision, if (i) the Initial Shelf Registration Statement has not been filed on or prior to the Filing Deadline Date, (ii) the Initial Shelf Registration Statement has not been declared
effective under the Securities Act on or prior to the Effectiveness Deadline Date, or (iii) after the effective date of the Shelf Registration Statement and prior to the termination of the
Effectiveness Period, (A) the Shelf Registration Statement ceases to be effective for the offer and sale of Registrable Securities (other than during such Deferral Periods as permitted pursuant
to Section 3(i)), and the Company fails to file (and have declared effective), with 

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ten
(10) Business Days, a post-effective amendment to the Shelf Registration Statement or amendment or supplement to the Prospectus contained therein or such other document with the
SEC to make the Shelf Registration Statement effective or such Prospectus usable, or (B) the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect
of such period pursuant to Section 3(i) hereof (each of the events of a type described in any of the foregoing clauses (i) through (iii) are individually referred to herein
as an "Event," and the Filing Deadline Date in the case of clause (i), the Effectiveness Deadline Date in the case of clause (ii), and (x) the date on which the Company fails to
file (and have declared effective) a post-effective amendment or amendment or supplement or such other document to make the Shelf Registration Statement effective or the Prospectus usable
or (y) the date on which the aggregate duration of Deferral Periods in any period exceeds the number of days permitted by Section 3(i) hereof in the case of clause (iii),
being referred to herein as an "Event Date"). Events shall be deemed to continue until the "Event Termination Date," which shall be the following dates with respect to the respective types of Events:
the date the Initial Shelf Registration Statement is filed in the case of an Event of the type described in clause (i), the date the Initial Shelf Registration Statement is declared effective
under the Securities Act in the case of an Event of the type described in clause (ii), (A) the date on which the Company files (and has declared effective) a post-effective
amendment, amendment, supplement or other document to make the Shelf Registration Statement effective or Prospectus usable or (B) termination of the Deferral Period that caused the limit on the
aggregate duration of Deferral Periods in a period set forth in Section 3(i) to be exceeded in the case of the commencement of an Event of the type described in clause (iii). 

        Accordingly,
commencing on (and including) the day following any Event Date and ending on (but excluding) the next date on which there are no Events that have occurred and are continuing
(a "Damages Accrual Period"), the Company agrees to pay, as liquidated damages and not as a penalty, an amount (the "Liquidated Damages Amount"), payable on the Damages Payment Dates to Record Holders
of then outstanding Securities that are Registrable Securities or of then outstanding shares of Underlying Common Stock issued upon conversion of Securities that are Registrable Securities, as the
case may be, accruing, for each portion of such Damages Accrual Period beginning on and including a Damages Payment Date (or, in respect of the first time that the Liquidation Damages Amount is to be
paid to Holders on a Damages Payment Date as a result of the occurrence of any particular Event, from the Event Date) and ending on but excluding the first to occur of (A) the date of the end
of the Damages Accrual Period or (B) the next Damages Payment Date, at a rate per annum equal to one-quarter of one percent (0.25%) for the first 90-day period from the
Event Date, and thereafter at a rate per annum equal to one-half of one percent (0.5%) per $1,000 principal amount of Securities and per $1,000 principal amount of Securities converted
into shares of Common Stock; provided, that any Liquidated Damages Amount accrued with respect to any
Security or portion thereof called for redemption on a redemption date or converted into Underlying Common Stock on a conversion date, shall, in any such event, be paid instead to the Holder who
submitted such Security or portion thereof for redemption or conversion on the applicable redemption date or conversion date, as the case may be, on such date (or promptly following the conversion
date, in the case of conversion). Notwithstanding the foregoing, no Liquidated Damages Amounts shall accrue as to any Registrable Security from and after the earlier of (x) the date such
security is no longer a Registrable Security and (y) expiration of the Effectiveness Period. The rate of accrual of the Liquidated Damages Amount with respect to any period shall not exceed the
rate provided for in this paragraph notwithstanding the occurrence of multiple concurrent Events. Following the cure of all Events requiring the payment by the Company of Liquidated Damages Amounts to
the Holders of Registrable Securities pursuant to this Section, the accrual of Liquidated Damages Amounts will cease (without in any way limiting the effect of any subsequent Event requiring the
payment of the Liquidated Damages Amount by the Company). 

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        The Trustee shall be entitled, on behalf of Holders of Securities or the Underlying Common Stock, as the case may be, to seek any available remedy for the enforcement of this Agreement,
including for the payment of any Liquidated Damages Amount. Notwithstanding the foregoing, the parties agree that the sole monetary damages payable for a violation of the terms of this Agreement with
respect to which liquidated damages are expressly provided shall be such liquidated damages. Nothing shall preclude a Notice Holder or Holder of Registrable Securities from pursuing or obtaining
specific performance or other equitable relief with respect to this Agreement. 

        All
of the Company's obligations set forth in this Section 2(e) that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable
Security shall survive until such time as all such obligations with respect to such security have been satisfied in full (notwithstanding termination of this Agreement pursuant to
Section 8(j)). 

        The
parties hereto agree that the liquidated damages provided for in this Section 2(e) constitute a reasonable estimate of the damages that may be incurred by Holders of
Registrable Securities by reason of the failure of the Shelf Registration Statement to be filed or declared effective or available for effecting resales of Registrable Securities in accordance with
the provisions hereof. 

        SECTION
3. Registration Procedures. In connection with the registration obligations of the Company under Section 2 hereof, the
Company shall: 

        (a)   Before
filing any Registration Statement or Prospectus or any amendments or supplements (other than supplements that do nothing more substantive than name one or more
Notice Holders as selling security holders) thereto with the SEC, furnish to the Initial Purchasers copies of all such documents proposed to be filed and use reasonable efforts to reflect in each such
document when so filed with the SEC such comments as the Initial Purchasers reasonably shall propose within two (2) Business Days of the delivery of such copies to the Initial Purchasers. 

        (b)   Prepare
and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration
Statement continuously effective for the applicable period specified in Section 2(a); cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and use its reasonable efforts to comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all securities covered by such Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by
the sellers thereof set forth in such Registration Statement as so amended or such Prospectus as so supplemented. 

        (c)   As
promptly as practicable give notice to the Notice Holders and the Initial Purchasers (i) when any Prospectus, Prospectus supplement, Registration Statement or
post-effective amendment to a Registration Statement has been filed with the SEC and, with respect to a Registration Statement or any post-effective amendment, when the same
has been declared effective (provided, however, that the Company shall not be required by this
clause (i) to notify (A) the Initial Purchasers of the filing of a Prospectus supplement that does nothing more substantive than name one or more Notice Holders as selling security
holders or (B) any Notice Holder of the filing of a Prospectus supplement that does nothing more substantive than name one or more other Notice Holders as selling security holders),
(ii) of any request, following the effectiveness of the Initial Shelf Registration Statement under the Securities Act, by the SEC or any other federal or state governmental authority for
amendments or supplements to any Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Registration Statement or the initiation or threatening of any proceedings for that purpose, (iv) of the receipt by the Company
of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the 

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occurrence
of (but not the nature of or details concerning) a Material Event (provided, however, that no
notice by the Company shall be required pursuant to this clause (v) in the event that the Company either promptly files a Prospectus supplement to update the Prospectus or a
Form 8-K or other appropriate Exchange Act report that is incorporated by reference into the Registration Statement, which, in either case, contains the requisite information with
respect to such Material Event that results in such Registration Statement no longer containing any untrue statement of material fact or omitting to state a material fact necessary to make the
statements contained therein not misleading) and (vi) of the determination by the Company that a post-effective amendment to a Registration Statement will be filed with the SEC,
which notice may, at the discretion of the Company (or as required pursuant to Section 3(i)), state that it constitutes a Deferral Notice, in which event the provisions of
Section 3(i) shall apply. 

        (d)   Use
reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in either case at the earliest practicable
moment or, if any such order or suspension is made effective during any Deferral Period, at the earliest practicable moment after the expiration of such Deferral Period. 

        (e)   If
requested by the Initial Purchasers or any Notice Holder, as promptly as practicable incorporate in a Prospectus supplement or post-effective amendment to
a Registration Statement such information as the Initial Purchasers or such Notice Holder shall, on the basis of an opinion of nationally-recognized counsel experienced in such matters, determine to
be required to be included therein by applicable law and make any required filings of such Prospectus supplement or such post-effective amendment;  provided, that the Company shall not be required to take any actions under this Section 3(e) that
are not, in the reasonable opinion of counsel for the Company, in compliance with applicable law. 

        (f)    As
promptly as practicable furnish to each Notice Holder and the Initial Purchasers, upon their request and without charge, at least one (1) conformed copy of the
Registration Statement and any amendment thereto, including financial statements, but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits
(unless requested in writing to the Company by such Notice Holder or the Initial Purchasers, as the case may be). 

        (g)   During
the Effectiveness Period, deliver to each Notice Holder in connection with any sale of Registrable Securities pursuant to a Registration Statement, without
charge, as many copies of the Prospectus or Prospectuses relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement thereto as such Notice Holder
may reasonably request; and the Company hereby consents (except during such periods that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or each amendment or
supplement thereto by each Notice Holder in connection with any offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in the manner set
forth therein. 

        (h)   Subject
to Section 3(i), prior to any public offering of the Registrable Securities pursuant to the Shelf Registration Statement, use its reasonable efforts to
register or qualify or cooperate with the Notice Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Notice Holder reasonably requests in writing (which request may be included in the Notice and
Questionnaire), it being agreed that no such registration or qualification will be made unless so requested; prior to any public offering of the Registrable Securities pursuant to the Shelf
Registration Statement, use its reasonable efforts to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period in connection with such Notice
Holder's offer and sale of Registrable Securities pursuant to 

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such
registration or qualification (or exemption therefrom) and do any and all other acts or things necessary to enable the disposition in such jurisdictions of such Registrable Securities in the
manner set forth in the relevant Registration Statement and the related Prospectus; provided, that the
Company will not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it is not otherwise qualified or (ii) take any action that
would subject it to general service of process in suits or to taxation in any such jurisdiction where it is not then so subject. 

        (i)    Upon
(A) the issuance by the SEC of a stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of proceedings with respect to
the Shelf Registration Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the existence of any fact (a "Material Event") as a result of which
any Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not
misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any 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 (including, in any such case, as a result of the non-availability of financial statements), or (C) the
occurrence or existence of any corporate development that, in the discretion of the Company, makes it appropriate to suspend the availability of the Shelf Registration Statement and the related
Prospectus, (i) in the case of clause (B) above, subject to the next sentence, as promptly as practicable prepare and file a post-effective amendment to such
Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such
Registration Statement and Prospectus so that such Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and such Prospectus does not contain any untrue statement of a material fact or omit to state any 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, as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, and, in the case of a post-effective amendment to a Registration Statement, subject to the next sentence, use its reasonable efforts to cause it to be declared effective
as promptly as practicable, and (ii) give notice to the Notice Holders that the availability of the Shelf Registration Statement is suspended (a "Deferral Notice") and, upon receipt of any
Deferral Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to the Registration Statement until such Notice Holder's receipt of copies of the supplemented or amended
Prospectus provided for in clause (i) above, or until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any additional or supplemental filings
that are incorporated or deemed incorporated by reference in such Prospectus. The Company will use its reasonable efforts to ensure that the use of the Prospectus may be resumed (x) in the case
of clause (A) above, as promptly as is practicable, (y) in the case of clause (B) above, as soon as, in the sole judgment of the Company, public disclosure of such Material Event
would not be prejudicial to or contrary to the interests of the Company or, if necessary to avoid unreasonable burden or expense, as soon as practicable thereafter and (z) in the case of
clause (C) above, as soon as, in the discretion of the Company, such suspension is no longer appropriate. The period during which the availability of the Registration Statement and any
Prospectus is suspended (the "Deferral Period") shall, without the Company incurring any obligation to pay liquidated damages pursuant to Section 2(e), not exceed forty-five
(45) days in any 90-day period or ninety (90) days in any 360-day period. 

        (j)    If
requested in writing in connection with a disposition of Registrable Securities pursuant to a Registration Statement, make reasonably available for inspection during
normal business hours by a representative for the Notice Holders of such Registrable Securities and any broker-dealers, attorneys and accountants retained by such Notice Holders, all relevant
financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the appropriate 

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executive
officers, directors and designated employees of the Company and its subsidiaries to make reasonably available for inspection during normal business hours all relevant information requested
by such representative for the Notice Holders or any such broker-dealers, attorneys or accountants in connection with such disposition, in each case as is customary for similar "due diligence"
examinations; provided, however, that such persons shall first agree in writing with the Company
pursuant to a customary confidentiality agreement that any information that is reasonably designated by the Company in writing as confidential at the time of delivery of such information shall be kept
confidential by such persons and shall be used solely for the purposes of exercising rights under this Agreement, unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) disclosure of such information is required by law (including any disclosure requirements pursuant to
federal securities laws in connection with the filing of any Registration Statement or the use of any Prospectus referred to in this Agreement), (iii) such information becomes generally
available to the public other than as a result of a disclosure or failure to safeguard by any such person or (iv) such information becomes available to any such person from a source other than
the Company and such source is not bound by a confidentiality agreement; and provided further, that the foregoing inspection and information gathering shall, to the greatest extent possible, be
coordinated on behalf of all the Notice Holders and the other parties entitled thereto by the counsel referred to in Section 5. 

        (k)   Comply
with all applicable rules and regulations of the SEC and make generally available to its securityholders earning statements (which need not be audited) satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of a Registration Statement, which statements shall cover said 12-month periods. 

        (l)    Cooperate
with each Notice Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold pursuant to a Registration
Statement, and cause such Registrable Securities to be in such denominations as are permitted by the Indenture and registered in such names as such Notice Holder may request in writing at least two
Business Days prior to any sale of such Registrable Securities. 

        (m)  Provide
a CUSIP number for all Registrable Securities covered by each Registration Statement not later than the effective date of such Registration Statement and provide
the Trustee for the Securities and the transfer agent for the Common Stock with certificates for the Registrable Securities that are in a form eligible for deposit with The Depository Trust Company. 

        (n)   Make
reasonable effort to provide such information as is required for any filings required to be made with the National Association of Securities Dealers, Inc. 

        (o)   Upon
(i) the filing of the Initial Shelf Registration Statement and (ii) the effectiveness of the Initial Shelf Registration Statement, announce the same,
in each case by release to Reuters Economic Services and Bloomberg Business News or other means of dissemination reasonably expected to make such information known publicly. 

        (p)   Take
all actions necessary, or reasonably requested by the holders of a majority of the Registrable Securities being sold, in order to expedite or facilitate disposition
of such Registrable Securities; provided that the Company shall not be required to take any action in connection with an underwritten offering without
its consent; and 

        (q)   Cause
the Indenture to be qualified under the TIA not later than the effective date of any Registration Statement; and in connection therewith, cooperate with the
Trustee to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms 

9

 

of
the TIA and execute, and use reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with
the SEC to enable the Indenture to be so qualified in a timely manner. 

        (r)   The
Company shall use reasonable efforts to cause the Common Stock issuable upon conversion of the Securities to be quoted on the Nasdaq National Market or other stock
exchange or trading system on which the Common Stock primarily trades on or prior to the time at which the SEC declares the Shelf Registration Statement effective or at which the Shelf Registration
Statement otherwise becomes effective. 

        (s)   Not
less than 30 calendar days prior to the time the Company intends in good faith to have the Shelf Registration Statement declared effective, the Company shall mail
the Notice and Questionnaire to the Holders of Registrable Securities. Holders of Registrable Securities shall have at least 20 calendar days from the date on which the Notice and Questionnaire is
first mailed to such Holders to return a completed and signed Notice and Questionnaire to the Company. The Company shall not be required to take any action to name any Holder as a selling
securityholder in the Shelf Registration Statement or to enable any Holder to use the Prospectus forming a part thereof for resales of Registrable Securities unless such Holder has returned a
completed and signed Notice and Questionnaire to the Company by the deadline set forth herein prior to the effective time of the Shelf Registration Statement or after such effective time as specified
in Section 2(d). After the effective time of the Shelf Registration Statement, the Company shall, upon the request of any Holder of Registrable Securities that is not then a Notice Holder,
promptly send a Notice and Questionnaire to such Holder. 

        SECTION
4. Holder's Obligations. Each Holder agrees, by acquisition of the Registrable Securities, that no Holder of Registrable
Securities shall be entitled to sell any of such Registrable Securities pursuant to a Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company
with a Notice and Questionnaire as required pursuant to Section 2(d) hereof (including the information required to be included in such Notice and Questionnaire) and the information set forth in
the next sentence. Each Notice Holder agrees promptly to furnish to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such
Notice Holder not misleading, any other information regarding such Notice Holder and the distribution of such Registrable Securities as may be required to be disclosed in the Registration Statement
under applicable law or pursuant to SEC comments and any information otherwise required by the Company to comply with applicable law or regulations. Each Holder further agrees, following termination
of the Effectiveness Period, to notify the Company within 10 business days of request, of the amount of Registrable Securities sold pursuant to the Registration Statement and, in the absence of a
response, the Company may assume that all of the Holder's Registrable Securities were so sold. 

        SECTION
5. Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance by the Company
of its obligations under Sections 2 and 3 of this Agreement whether or not any of the Registration Statements are declared effective. Such fees and expenses shall include, without limitation,
(i) all registration and filing fees (including, without limitation, fees and expenses (x) with respect to filings required to be made with the National Association of Securities
Dealers, Inc. and (y) of compliance with federal and state securities or Blue Sky laws to the extent such filings or compliance are required pursuant to this Agreement (including,
without limitation, reasonable fees and disbursements of the counsel specified in the next sentence in connection with Blue Sky qualifications of the Registrable Securities under the laws of such
jurisdictions as the Notice Holders of a majority of the Registrable Securities being sold pursuant to a Registration Statement may designate)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company), (iii) duplication expenses relating to copies of any
Registration Statement or Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of counsel for the 

10

 

Company
in connection with the Shelf Registration Statement, and (v) reasonable fees and disbursements of the Trustee and its counsel and of the registrar and transfer agent for the Common
Stock. In addition, the Company shall bear or reimburse the Notice Holders for the reasonable fees and disbursements of one firm of legal counsel for the Holders, which shall, upon the written consent
of the Initial Purchasers (which shall not be unreasonably withheld), be a nationally recognized law firm experienced in securities law matters designated by the Company. In addition, the Company
shall pay the internal expenses of the Company (including, without limitation, all salaries and expenses of officers and employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange on which the same securities of the Company are then listed and the fees
and expenses of any person, including special experts, retained by the Company. Each Notice Holder shall pay all underwriting discounts and commissions and any transfer taxes, broker's commissions or
agency fees relating to the sale or disposition of such Notice Holder's Registrable Securities pursuant to the Shelf Registration Statement. 

        SECTION
6. Indemnification; Contribution. 

        (a)   The
Company agrees to indemnify and hold harmless the Initial Purchasers and each holder of Registrable Securities and each person, if any, who controls the Initial
Purchasers or any holder of Registrable Securities within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, as follows: 

        (i)    against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made, not misleading; 

        (ii)   against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, provided that (subject to Section 6(d) below) any such settlement is effected with the prior written consent of the Company; and 

        (iii)  subject
to Section 6(c) below, against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; 

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchasers, such holder of Registrable Securities (which also acknowledges the indemnity provisions herein) or any person, if any, who controls the Initial
Purchasers or any such holder of Registrable Securities expressly for use in the Registration Statement (or any amendment thereto), or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); provided, further, that this indemnity agreement shall not apply to any loss, 

11

 

liability,
claim, damage or expense (1) arising from an offer or sale of Registrable Securities occurring during a Deferral Period, if a Deferral Notice was given to such Notice Holder in
accordance with Section 8(b), or (2) if the Holder fails to deliver at or prior to the written confirmation of sale, the most recent Prospectus, as amended or supplemented, and such
Prospectus, as amended or supplemented, corrected such untrue statement or omission or alleged untrue statement or omission of a material fact and the delivery thereof was required by law and would
have constituted a complete defense to the claim in respect of such untrue statement or omission or alleged untrue statement or omission. 

        (b)   In
connection with any Shelf Registration in which a holder, including, without limitation, the Initial Purchasers, of Registrable Securities is participating, in
furnishing information relating to such holder of Registrable Securities to the Company in writing expressly for use in such Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto, the holders of such Registrable Securities agree, severally and not jointly, to indemnify and hold harmless the Initial Purchasers and each person, if any, who
controls the Initial Purchasers within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and the Company, and each person, if any, who controls the
Company within the meaning of either such Section, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by or on behalf of such holder of Registrable
Securities (which also acknowledges the indemnity provisions herein) or any person, if any, who controls any such holder of Registrable Securities expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto). 

        The
Initial Purchasers agree to indemnify and hold harmless the Company, the holders of Registrable Securities, and each person, if any, who controls the Company or any holder of
Registrable Securities within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto), or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by or on behalf of by the Initial Purchasers expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto). 

        (c)   Each
indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests 

12

 

between
them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for the Initial Purchasers, Holders of Registrable Securities,
and all persons, if any, who control the Initial Purchasers or Holders of Registrable Securities within the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, or (b) the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, and each person, if any, who controls the
Company within the meaning of either such Section, and that all such reasonable fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Initial
Purchasers, Holders of Registrable Securities, and control persons of the Initial Purchasers and Holders of Registrable Securities, such firm shall be designated in writing by the Initial Purchasers.
In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 (whether or not the
indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party. 

        (d)   If
at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into
more than 60 days after receipt by such indemnifying party of aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least
30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date
of such settlement; provided, that an indemnifying party shall not be liable for any such settlement effected without its consent if such indemnifying
party (1) reimburses such indemnified party in accordance with such request to the extent it considers such request to be reasonable and (2) provides written notice to the indemnified
party describing any unpaid balance it believes is unreasonable and the reasons therefor, in each case prior to the date of such settlement. 

        (e)   If
the indemnification to which an indemnified party is entitled under this Section 6 is for any reason unavailable to or insufficient although applicable in
accordance with its terms to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations. 

        The
relative fault of the Company on the one hand and the holders of the Registrable Securities or the Initial Purchasers on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the
holder of the Registrable Securities or the Initial Purchasers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 

13

 

        The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(e) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to above in this Section 6(e). The aggregate amount of losses, liabilities, claims, damages, and expenses
incurred by an indemnified party and referred to above in this Section 6(e) shall be deemed to include any out-of-pocket legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. 

        Notwithstanding
the provisions of this Section 6, neither the holder of any Registrable Securities nor the Initial Purchasers, shall be required to indemnify or contribute any
amount in excess of the amount by which the total price at which the Registrable Securities sold by such holder of Registrable Securities or by the Initial Purchasers, as the case may be, and
distributed to the public were offered to the public exceeds the amount of any damages that such holder of Registrable Securities or the Initial Purchasers has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. 

        No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. 

        For
purposes of this Section 6(e), each person, if any, who controls the Initial Purchasers or any holder of Registrable Securities within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Initial Purchasers or such holder, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company. 

        SECTION
7. Information Requirements. The Company covenants that, if at any time before the end of the Effectiveness Period the Company is
not subject to the reporting requirements of the Exchange Act, it will cooperate with any Holder of Registrable Securities and take such further reasonable action as any Holder of Registrable
Securities may reasonably request in writing (including, without limitation, making such reasonable representations as any such Holder may reasonably request), all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 and Rule 144A under
the Securities Act and customarily taken in connection with sales pursuant to such exemptions. Upon the written request of any Holder of Registrable Securities, the Company shall deliver to such
Holder a written statement as to whether it has complied with such filing requirements, unless such a statement has been included in the Company's most recent annual or quarterly report required to be
filed and filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to
register any of its securities under any section of the Exchange Act. 

        SECTION
8. Miscellaneous; No Conflicting Agreements. The Company is not, as of the date hereof, a party to, nor shall it, on or after the
date of this Agreement, enter into, any agreement with respect to its securities that conflicts with the rights granted to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of Registrable Securities hereunder do not in any way conflict with the rights granted to the holders of the Company's securities under
any other agreements. 

        (a)   Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority of the then
outstanding Underlying Common Stock constituting Registrable 

14

 

Securities
(with Holders of Securities deemed to be the Holders, for purposes of this Section, of the number of outstanding shares of Underlying Common Stock into which such Securities are or would be
convertible or exchangeable as of the date on which such consent is requested). Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights
of other Holders of Registrable Securities may be given by Holders of at least a majority of the Registrable Securities being sold by such Holders pursuant to such Registration Statement;  provided,
that the provisions of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence. Each Holder of Registrable Securities outstanding at the time of any such amendment, modification, supplement, waiver or consent
or thereafter shall be bound by any such amendment, modification, supplement, waiver or consent effected pursuant to this Section 8(a), whether or not any notice, writing or marking indicating
such amendment, modification, supplement, waiver or consent appears on the Registrable Securities or is delivered to such Holder. 

        (b)   Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand
delivery, by telecopier, by courier guaranteeing overnight delivery or by first-class mail, return receipt requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after being deposited with such courier, if made by overnight courier or (iv) on the date
indicated on the notice of receipt, if made by first-class mail, to the parties as follows: 

        (w)  if
to a Holder of Registrable Securities that is not a Notice Holder, at the address for such Holder then appearing in the Registrar (as defined in the Indenture); 

        (x)   if
to a Notice Holder, at the most current address given by such Holder to the Company in a Notice and Questionnaire or any amendment thereto; 

        (y)   if
to the Company, to: 

Chiron
Corporation

4560 Horton Street

Emeryville, CA 94608

Attention: Senior Vice President, General Counsel and Secretary

Telecopier No.: (510) 655-9910 

        and

Sullivan &
Cromwell

1888 Century Park East

Los Angeles, California 90067-1725

Attention: Frank H. Golay, Jr., Esq.

Telecopier: (310) 712-8800 

        and 

        (z)   if
to the Initial Purchasers, to: 

Credit
Suisse First Boston LLC

Eleven Madison Avenue

New York, New York 10010

Attention: Transactions Advisory Group

Telecopier: (212) 325-8278 

        and 

15

 

Morgan
Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Attention: Equity Capital Markets

Telecopier: (212) 761-0538 

or
to such other address as such person may have furnished to the other persons identified in this Section 8(b) in writing in accordance herewith. 

        (c)   Approval of Holders. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its affiliates (as such term is defined in Rule 405 under the Securities Act) (other than the Initial Purchasers or subsequent
Holders of Registrable Securities if such subsequent Holders are deemed to be such affiliates solely by reason of their holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required percentage. 

        (d)   Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and, without requiring any express assignment, shall inure to the benefit of and be binding upon each Holder of any Registrable Securities. 

        (e)   Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be original and all of which taken together shall constitute one and the same agreement. 

        (f)    Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect
the meaning hereof. 

        (g)   Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 

        (h)   Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated
thereby, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. 

        (i)    Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and is intended to
be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and the registration rights granted by the Company with
respect to the Registrable Securities. Except as provided in the Purchase Agreement, there are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to the Registrable Securities. This Agreement supersedes all prior agreements and undertakings among the parties with
respect to such registration rights. 

        (j)    Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the
Effectiveness Period, except for any liabilities or obligations under Sections 4, 5 or 6 hereof and the obligations to make payments of and provide for liquidated damages under Section 2(e)
hereof to the extent such damages accrue prior to the end of the Effectiveness Period, each of which shall remain in effect in accordance with its terms. 

16

        IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. 

	 	 	CHIRON CORPORATION
	

 	
 	

By:	

/s/  JOEL R. JUNG      
 Name: Joel R. Jung

Title: Vice President and Treasurer

Accepted
as of the date first above written: 

	CREDIT SUISSE FIRST BOSTON LLC	 	 
	

By:	

/s/  GEORGE BOUTROS      
 Authorized Signatory	
 	

 
	

MORGAN STANLEY & CO. INCORPORATED	
 	

 
	

By:	

/s/  BRYAN W. ANDRZEJEWSKI      
 Authorized Signatory	
 	

 

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Exhibit 4.08

REGISTRATION RIGHTS AGREEMENTQuickLinks
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Exhibit 4.09    
    

 
 

FACE OF GLOBAL SECURITY    
    

        FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THIS SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS JUNE 22, 2004. THE HOLDER OF THIS SECURITY MAY OBTAIN THE PROJECTED PAYMENT SCHEDULE, COMPARABLE YIELD AND YIELD TO MATURITY FOR THE PURPOSES OF
ACCRUING ORIGINAL ISSUE DISCOUNT BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: INVESTOR RELATIONS, CHIRON CORPORATION, 4560 HORTON STREET, EMERYVILLE, CALIFORNIA 94608-2916. 

        UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

        TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. 

        THIS
SECURITY AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. 

        THE
HOLDER OF THIS SECURITY SHALL BE DEEMED TO HAVE AGREED FOR THE BENEFIT OF CHIRON CORPORATION THAT THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS SECURITY MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER
THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. 

 

        THIS
SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON
RESALES AND OTHER TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR
TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY AND SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT. 

2

Chiron Corporation 

23/4%
Convertible Debentures due 2034 

	No. 1	 	CUSIP: 170040 AH2
	Issue Date: June 22, 2004	 	 

        Chiron
Corporation, a Delaware corporation, promises to pay to Cede & Co. or registered assigns, the principal amount of Three Hundred Eighty Five Million Dollars (U.S.
$385,000,000) on June 30, 2034. 

	Interest Payment Dates:	 	June 30 and December 30
	Record Dates:	 	June 15 and December 15

        This
Security is convertible as specified on the other side of this Security. 

        Additional
provisions of this Security are set forth on the other side of this Security. 

	Dated: June 22, 2004	 	CHIRON CORPORATION
	

 	
 	

By:	
 	

/s/  JOEL R. JUNG      
 Title: Joel R. Jung, Vice President and Treasurer

TRUSTEE'S
CERTIFICATE OF AUTHENTICATION 

U.S.
BANK NATIONAL ASSOCIATION, 

as
Trustee, certifies that this is one

of the Securities referred to in the

within-mentioned Indenture. 

	By	 	/s/  PAULA OSWALD, VICE PRESIDENT      
 Authorized Signatory	 	 

Dated:
June 22, 2004 

REVERSE OF GLOBAL SECURITY  

 23/4% Convertible Debentures due 2034  

        1.    Interest.    

        Chiron
Corporation, a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Company"), promises to
pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest semiannually on June 30 and December 30 of each year. Interest on
the Securities will accrue from the most recent date to which interest has been paid on the Securities or, if no interest has been paid, from June 22, 2004. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months. 

        The
record date for the payment of interest to Holders will be the close of business on June 15 and December 15 of each year (whether or not a Business Day);  provided, that interest payable at
Stated Maturity or upon redemption or repurchase will be payable to the Person to whom the principal amount is
payable. Interest on Securities converted after a record date but prior to the corresponding interest payment date will be paid to the Holder of the Securities on the record date, but upon conversion
the Holder must pay the Company the interest which has accrued and will be paid on such interest payment date. No such payment need be made with respect to Securities that will be redeemed after a
record date and prior to the corresponding interest payment date or with respect to a conversion pursuant to Paragraph 8(h) herein. 

        If
any interest payment or the Purchase Price, Redemption Price, Change in Control Purchase Price, Make Whole Premium or principal amount, as applicable, of a Security or any portion of
such interest payment, Purchase Price, Redemption Price, Change in Control Purchase Price, Make Whole Premium or principal amount, as applicable, is not paid when due, then in each such case the
overdue amount shall, to the extent permitted by law, bear interest at the rate of 2.75% per annum, compounded semi-annually, which interest shall accrue from the date of such overdue
amount was originally due to the date of payment of such amount, including interest thereon, has been made or duly provided for. All such interest shall be payable on demand and shall be based on a
360-day year comprised of twelve 30-day months. 

        Upward Interest Adjustment.    If the average of the Closing Sale Prices (as defined below) is less than or equal to 70% of the
Conversion Price of this Security for any 20 out of the last 30 trading days (as defined in the Indenture) ending on the third trading day prior to any Purchase Date, then the interest rate on this
Security will be subject to an upward adjustment for the subsequent six-month period as set forth herein (an "Upward Interest Adjustment").
If there is a change in the Conversion Price during any applicable 30 trading day period, such average will be computed based on the daily ratio of the Closing Sale Price to the Conversion Price on
each such day. 

        Once
an Upward Interest Adjustment is in effect for the six-month period immediately following a Purchase Date, the Upward Interest Adjustment will remain in effect for each
subsequent six-month period until the next Purchase Date (or, in the case of an Upward Interest Adjustment in effect for the six-month period immediately following the
June 30, 2029 Purchase Date, until the Stated Maturity) if the average of the Closing Sale Prices is less than or equal to 70% of the Conversion Price of the Securities for 20 out of the last
30 trading days ending on the third trading day preceding the June 30 or December 30 on which such six-month period begins (computed as described above). If the average of
the Closing Sale Prices is greater than 70% of the Conversion Price of the Securities for 20 out of the last 30 trading days ending on the third trading day preceding any June 30 or
December 30 (computed as described above), then no Upward Interest Adjustment will be in effect, and the interest rate on the Securities will revert back to the rate per annum shown above, for
the subsequent six-month period, although the interest rate for subsequent six-month periods until the next Purchase Date may be adjusted upwards if the average of the Closing
Sale Prices of the Common Stock is less than or equal to 70% of the Conversion Price of the Securities for 20 out of the last 30 trading days ending on the third trading day preceding the
June 30 or December 30 on which such six-month period 

 

begins.
If the average of the Closing Sale Prices is greater than 70% of the Conversion Price of the Securities for 20 out of the last 30 trading days ending on the third trading day preceding any
Purchase Date, then the interest rate on the Securities will not be subject to a possible upward interest adjustment until the next Purchase Date. 

        If
an Upward Interest Adjustment is in effect for a particular six-month period, the Company shall pay interest on the principal amount of the Securities at a rate per annum
equal to the Reset Rate (as defined below). 

        The
"Reset Rate" for any six-month period, as determined by the Reset Rate Agent (as defined below), will be equal to the rate (the "Reference Fixed
Rate") that would, in the sole judgment of the Reset Rate Agent, result in a trading price of par with a hypothetical issue of senior, non-convertible, fixed rate
debt securities of the Company with: 

        (i)
a final maturity equal to the term from the Purchase Date on which the Reset Rate is determined until the next Purchase Date (or the Stated Maturity, if the Purchase Date is the
June 30, 2029 Purchase Date); 

        (ii)
an aggregate principal amount equal to the then outstanding aggregate principal amount of the Securities; and 

        (iii)
provisions that are, insofar as would be practicable for an issue of senior, non-convertible, fixed-rate debt securities with no restrictive covenants,
substantially identical to those of the Securities. 

        In
no case, however, will the Reset Rate ever be greater than 12% per annum without the prior written consent of the Company. Also, if the Reset Rate Agent determines in its sole
judgment that there is no suitable Reference Fixed Rate, the Reset Rate shall be the Reset Rate most recently determined (except if there are no Reset Rate most recently determined, in which case the
Reset Rate shall be a rate reasonably determined by the Reset Rate Agent to reflect current market conditions), such Reset Rate to remain in effect until the Reset Rate Agent determines that there is
a suitable Reference Fixed Rate, at which time the Reset Rate Agent shall determine a new Reset Rate. 

        "Conversion Price" means, as of any date, the principal amount of this Security divided by the applicable Conversion Rate. 

        The
"Closing Sale Price" of the Common Stock on any date means the closing per share sale price (or if no closing sale price is reported,
the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date as reported on the National Association of Securities
Dealers Automated Quotation System or, if the shares of Common Stock are not quoted on the National Association of Securities Dealers Automated Quotation System, on the principal other market on which
the shares of Common Stock are then traded. In the absence of such quotations, the Company will be entitled to determine the Closing Sale Price on the basis of such quotations as the Company considers
appropriate. 

        The
Company and the Trustee agree that Morgan Stanley & Co. Incorporated will act as the Reset Rate Agent unless and until removed as provided below. If requested by the Company,
the Reset Rate Agent shall seek a Fixed Reference Rate from one other nationally recognized investment bank engaged by the Company for such purpose. The determination of any applicable Reset Rate
shall be made by the Reset Rate Agent by averaging the Fixed Reference Rate obtained by the Reset Rate Agent and the Fixed Reference Rate provided by such other investment bank. If a Fixed Reference
Rate cannot reasonably be obtained from one other nationally recognized investment bank or if the Company chooses not to engage such other investment bank, then the Fixed Reference Rate determined by
Morgan Stanley & Co. Incorporated shall be used. The determination of any applicable 

2

 

Reset
Rate by the Reset Rate Agent will be conclusive and binding upon the Reset Rate Agent, the Company, the Trustee and the holders of the Securities, in the absence of manifest error. 

        The
Reset Rate Agent may be removed at any time with or without cause by the Company giving at thirty (30) days' written notice to the Reset Rate Agent. The Reset Rate Agent may
resign at any time upon giving at least thirty (30) days' written notice to the Company. A successor Reset Rate Agent, if any, will be appointed by the Company. 

        In
the event of any Upward Interest Adjustment, the Company will disseminate a press release through Dow Jones & Company, Inc. or Bloomberg Business News containing this
information or publish the information on the Company's website or through such other public medium as the Company may use at that time. 

        2.    Method of Payment.    

        By
no later than 10:00 a.m. (New York City time) on the date on which any principal of or interest on any Security is due and payable, the Company shall irrevocably deposit with
the Trustee or the Paying Agent money sufficient to pay such principal and/or interest. Subject to the terms and conditions of the Indenture and except as provided above in the case of interest
payments, the Company will make payments in cash at Stated Maturity and in respect of Redemption Prices, Purchase Prices and Change in Control Purchase Prices and in shares of Common Stock or other
consideration in respect of any Make Whole Premium to Holders who surrender Securities to a Paying Agent to collect such payments in respect of the Securities. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may make such cash payments by wire transfers of immediately
available funds or, at the Company's option, by check payable in such money. 

        3.    Paying Agent, Conversion Agent and Registrar.    

        Initially,
the Trustee will act as Paying Agent, Conversion Agent and Registrar. The Company may appoint and change any Paying Agent, Conversion Agent or Registrar without notice, other
than notice to the Trustee; provided that the Company will maintain at least one Paying Agent in the State of New York, City of New York, Borough of Manhattan, which shall initially be an office or
agency of the Trustee. The Company or any of its Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion Agent or Registrar. 

        4.    Indenture.    

        This
Security is one of a series issued under an Indenture dated as of June 22, 2004 (the "Indenture"), between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as in effect from time to time (the
"TIA"). Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the TIA for a statement of those terms. 

        The
Securities are general unsecured obligations of the Company limited to $385,000,000 aggregate principal amount. The Indenture does not limit other Indebtedness of the Company,
secured or unsecured. 

        5.    Redemption at the Option of the Company.    

        No
sinking fund is provided for the Securities. Subject to the terms and conditions of this Indenture, the Securities are redeemable at the option of the Company in whole or in part, at
any time or from time to time on, or after July 5, 2010 for cash at a price equal to 100% of the principal amount plus accrued and unpaid interest, if any, up to the Redemption Date (the
"Redemption Price"). 

3

 

        6.    Notice of Redemption.    

        Notice
of redemption pursuant to Paragraph 5 of this Security will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at the Holder's registered address. If money sufficient to pay the Redemption Price of all Securities (or portions thereof) to be redeemed on the Redemption Date is deposited
with the Paying Agent prior to or on the Redemption Date, immediately after such Redemption Date interest ceases to accrue on such
Securities or portions thereof. Securities in denominations larger than $1,000 of principal amount may be redeemed in part but only in integral multiples of $1,000 of principal amount. 

        7.    Purchase By the Company at the Option of the Holder.    

        (a)   Subject
to the terms and conditions of the Indenture, the Company shall become obligated to purchase, at the option of the Holder, all or any portion of the Securities
held by such Holder on June 30, 2010, June 30, 2014, June 30, 2019, June 30, 2024 and June 30, 2029 or the next Business Day following such dates to the extent such
dates are not Business Days in integral multiples of $1,000 for cash at a Purchase Price equal to 100% of the principal amount plus accrued and unpaid interest, if any, up to the Purchase Date. To
exercise such right, a Holder shall deliver to the Company a Purchase Notice containing the information set forth in the Indenture, at any time from the opening of business on the date that is 20
Business Days prior to such Purchase Date until the close of business on the last day prior to such Purchase Date, and shall deliver the Securities to the Paying Agent as set forth in the Indenture. 

        (b)   At
the option of the Holder and subject to the terms and conditions of the Indenture, the Company shall become obligated to offer to purchase the Securities held by such
Holder within 30 days (which purchase shall occur 45 days after the date of such offer) after the occurrence of a Change in Control of the Company for a Change in Control Purchase Price
equal to 100% of the principal amount plus accrued and unpaid interest, if any, up to the Change in Control Purchase Date, which Change in Control Purchase Price shall be paid in cash, plus a Make
Whole Premium, if any, payable in Common Stock (or certain other consideration) determined as described in Article XI of the Indenture. 

        (c)   Holders
have the right to withdraw any Purchase Notice delivered pursuant to Paragraph 7(a) above or Change in Control Purchase Notice delivered pursuant to
Paragraph 7(b), as the case may be, by delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture. If cash, shares of Common Stock or other
consideration, as the case may be, sufficient to pay the Purchase Price or Change in Control Purchase Price (including a Make Whole Premium, if any), as the case may be, of all Securities or portions
thereof to be purchased as of the Purchase Date or the Change in Control Purchase Date, as the case may be, is deposited with the Paying Agent on the Business Day following the Purchase Date or the
Change in Control Purchase Date and other interest ceases to accrue on such Securities (or portions thereof) immediately after such Purchase Date or Change in Control Purchase Date, then the Holder
thereof shall have no other rights as such other than the right to receive the Purchase Price or Change in Control Purchase Price (including a Make Whole Premium, if any) upon surrender of such
Security. 

        8.    Conversion.    

        (a)   The
initial Conversion Rate is 14.9254 shares of Common Stock per $1,000 principal amount, subject to adjustment in certain events described in the Indenture. A Holder
that surrenders Securities for conversion will receive cash and, if applicable, shares of Common Stock in accordance with the provisions of Section 10.21 of the Indenture. 

        (b)   A
Holder may surrender for conversion a Security or portion of a Security during any Conversion Period if the Closing Sale Price for at least 20 trading days in the 30
trading day period ending on the first day of such Conversion Period is more than 120% of the Conversion Price per share 

4

 

of
Common Stock on the first day of the Conversion Period as determined by the Conversion Agent. A "Conversion Period" will be the period from and
including the eleventh trading day in a fiscal quarter to but not including the eleventh trading day in the immediately following fiscal quarter. 

        (c)   A
Holder may also surrender for conversion a Security or portion of a Security which has been called for redemption pursuant to Paragraph 5 hereof during the
period beginning with the Business Day on which the Company delivers a notice of redemption to the Trustee pursuant to Section 3.1 of the Indenture and ending on the close of business on the
Business Day immediately prior to the Redemption Date. A Security or portion of a Security in respect of which a Holder has delivered a Purchase Notice or a Change in Control Purchase Notice may be
converted only if such notice of exercise is withdrawn in accordance with the terms of the Indenture. 

(d)
(i) A Holder may also surrender for conversion a Security or portion of a Security during the five Business Day period following any consecutive five trading-day period in which
the average of the trading prices for a Security is less than 98% of the average Parity Value (as defined below) for that period. 

        The
"trading price" of a Security as of any date (each such date a "date of determination") means the average of the secondary market bid
quotations per Security obtained by U.S. Bank National Association for $5,000,000 principal amount of Securities at approximately 3:30 p.m., New York City time, on such date of determination
from two independent nationally recognized securities dealers designated by the Company to the Trustee at any time the Company instructs the Trustee to determine the trading price; provided that if at
least two such bids cannot reasonably be obtained by U.S. Bank National Association, but one such bid can reasonably be obtained by U.S. Bank National Association, this one bid shall be used. If U.S.
Bank National Association cannot reasonably obtain at least one such bid for $5,000,000 principal amount of Securities from a nationally recognized securities dealer or, in the reasonable judgment of
the Company, the bid quotations are not indicative of the secondary market value of the Securities, then the trading price of a Security will be deemed to be less than 98% of the product of
(a) the then-applicable Conversion Rate of the Securities multiplied by (b) the Closing Sale Price on such date of determination; provided that the Trustee shall not
determine the trading price of the Securities unless requested by the Company; and provided, further,
that the Company shall have no obligation to make such request unless a holder of Securities provides the Company with reasonable evidence that the trading price of the Securities for a five
consecutive day
trading period may be less than 98% of the average Parity Value for that period; and at which time, the Company shall instruct the Trustee to determine the trading price of the Securities for the
applicable period. The Trustee shall continue to determine the trading price of the Securities on each successive trading day until the earlier of (i) 30 trading days after the date that the
Company instructs the Trustee to determine the trading price and (ii) the first date of determination as of which the trading price is greater than or equal to 98% of the Parity Value of the
Securities for such date of determination. The Trustee shall be entitled to select the appropriate method for determining the trading price of the Securities and shall be entitled to all of the rights
of the Trustee set forth in the Indenture in connection with any such determination. Any such determination shall be conclusive absent manifest error. The "Parity
Value" of a Security on any date of determination means the product of (x) the Closing Sale Price on such date and (y) the Conversion Rate then in effect. 

        (ii)
With respect to this paragraph 8(d), if on the day before the Conversion Date the Closing Sale Price is greater than 100% of the Conversion Price then in effect but equal to
or less than the 120% of the Conversion Price then in effect, then the Holders will receive, in lieu of a Conversion Value based on the Conversion Rate then in effect, a Conversion Value equal to the
principal amount of the Securities to be converted, plus accrued and unpaid interest, if any, up to the Conversion Date (a "Principal Value
Conversion"). 

5

 

        (e)   In
the event that the Company declares a dividend or distribution described in Section 10.7 of the Indenture, or a dividend or a distribution described in
Section 10.8 of the Indenture where the fair market value of such dividend or distribution per share of Common Stock, as determined in the Indenture, exceeds 10% of the Closing Sale Price as of
the Business Day prior to the date of declaration for such distribution, a Holder may surrender for conversion a Security or a portion of a Security during the period beginning on the date the Company
gives notice to the Holders of such right, which shall be not less than 20 days prior to the Ex-Dividend Time for such dividend or distribution, and ending on the earlier to occur
of (i) the close of business on the Business Day prior to the Ex-Dividend Time or (ii) the announcement by the Company that such distribution will not take place. 

        (f)    A
Holder may also surrender for conversion a Security or portion of a Security during such period, if any, if (i) the credit rating assigned to the Company's long
term senior debt, or if the Securities are then rated, the rating assigned to the Securities, by Standard & Poor's is below BBB and by Moody's is below Baa3, (ii) the credit rating
assigned to the Company's long term senior debt or, if the Securities have been rated, the rating assigned to the Securities, by both such rating agencies is suspended or withdrawn, or
(iii) neither such rating agency is rating the Company's long term senior debt or, after the Securities have been rated, the Securities. 

        (g)   In
the event the Company is a party to a consolidation, merger or binding share exchange, as set forth in Section 5.1 of the Indenture, pursuant to which the
shares of Common Stock would be converted into cash, securities or other property as set forth in Section 10.15 of the Indenture, a Holder may surrender for conversion a Security or portion of
a Security during the period beginning on the day after the date which is 15 days prior to the date the Company announces as the anticipated effective time of such transaction and ending on the
date that is 15 days after the date such transaction is consummated. 

        (h)   During
the period beginning 10 days before the anticipated Effective Date of a Change in Control and until the Change in Control Purchase Date, a Holder may
surrender Securities for conversion. If, during such period, a Holder converts any Securities in connection with a Change in Control, the Holder shall receive: 

        (i)
the Make Whole Premium, if any, which will be in an amount determined as set forth in Article XI on the Change in Control Purchase Date for the Securities after the Change in
Control as described in Section 3.8 of the Indenture; plus 

        (ii)
the Conversion Value, with the Net Share Amount to be paid with the number of shares of Common Stock into which such Holder's Securities are convertible (if the Securities are
surrendered for conversion prior to the record date for receiving distributions in connection with a Change in Control, or if earlier, the effective time of the Change in Control) or the kind and
amount of cash, securities and other assets or property which such Holder would have received if the Holder had held the number of shares of Common Stock into which the Securities were convertible
immediately prior to the transactions (if Securities are surrendered for conversion after such record date or effective time, as the case may be); plus 

        (iii)
accrued but unpaid interest, if any, to, but excluding the Conversion Date, which interest will be payable in cash. 

        (i)    To
surrender a Security for conversion, a Holder must (1) complete and manually sign the irrevocable conversion notice below (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent, (2) surrender the Security to the Conversion Agent, (3) furnish appropriate endorsements and transfer documents
and (4) pay any transfer or similar tax, if required. 

6

 

        (j)    A
Holder may convert a portion of a Security if the principal amount of such portion is $1,000 or an integral multiple of $1,000. No payment or adjustment will be made
for dividends on the shares of Common Stock except as provided in the Indenture. Except as provided in Paragraph 1 and Paragraph 8(h) hereof, delivery of the Principal Return, Net Shares
and cash in lieu of fractional shares shall be deemed to satisfy the Company's obligation to pay the principal amount of a converted Security and accrued but unpaid interest thereon and accrued
interest will be deemed paid in full rather than cancelled, extinguished or forfeited. The Company will not adjust the Conversion Rate to account for accrued interest. 

        (k)   The
Conversion Rate will be adjusted as provided in Article X of the Indenture. The Company may increase the Conversion Rate for at least 20 days, so long
as the increase is irrevocable during such period. 

        (l)    If
the Company is a party to a consolidation, merger or binding share exchange or a transfer of all or substantially all of its assets as set forth in Section 5.1
of the Indenture, or upon certain distributions described in Section 10.8 of the Indenture, the right to convert a Security may be changed into a right to convert its Conversion Value into
securities, cash or other assets of the Company or another Person as more fully set forth in the Indenture. 

        9.    Denominations; Transfer; Exchange.    

        The
Securities are in fully registered form, without coupons, in denominations of $1,000 of principal amount and integral multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required
by law or permitted by the Indenture. The Registrar need not transfer or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities in respect of which a Purchase Notice or Change in Control Purchase Notice has been given and not withdrawn (except, in the case of a Security to be
purchased in part, the portion of the Security not to be purchased) or any Securities for a period of 15 days before the mailing of a notice of redemption of Securities to be redeemed. 

        10.    Persons Deemed Owners.    

        The
registered Holder of this Security may be treated as the owner of this Security for all purposes. 

        11.    Unclaimed Money or Securities.    

        The
Trustee and the Paying Agent shall return to the Company upon written request any money or securities held by them for the payment of any amount with respect to the Securities that
remains unclaimed for two years, subject to applicable unclaimed property law. After return to the Company, Holders entitled to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person. 

        12.    Trustee Dealings with the Company.    

        Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may
otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not
Trustee. 

        13.    Calculations in Respect of Securities.    

        The
Company will be responsible for making all calculations called for under the Securities, except for such calculations made by the Reset Rate Agent. These calculations include, but
are not limited to, determinations of the market prices of the Securities and the Common Stock, any interest payable on 

7

 

the
Securities, the principal amount of the Securities and the Conversion Price of the Securities. The Company will make these calculations in good faith and, absent manifest error, the calculations
will be final and binding on Holders of the Securities. The Company will provide to the Trustee a schedule of its calculations, and the Trustee is entitled to rely upon the accuracy of such
calculations without independent verification. The Trustee will forward the Company's calculations to any Holder of the Securities upon the request of such Holder. 

        14.    No Recourse Against Others.    

        A
director, officer, employee or shareholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities. 

        15.    Authentication.    

        This
Security shall not be valid until an authorize signatory of the Trustee manually signs the Trustee's Certificate of Authentication on the other side of this Security. 

        16.    Abbreviations.    

        Customary
abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants
with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 

        17.    GOVERNING LAW.    

        THIS
INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 

        The
Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture which has in it the text of this Security in larger type. Requests may be
made to: 

Chiron
Corporation

4560 Horton Street

Emeryville, CA 94608 

        18.    Registration Rights.    

        The
Holders of the Securities are entitled to the benefits of a Registration Rights Agreement, dated as of June 22, 2004, between the Company and Credit Suisse First Boston LLC
and Morgan Stanley & Co. Incorporated (the "Registration Rights Agreement"), including the receipt of liquidated damages upon a registration
default (as defined in such agreement). 

8

 
 

ASSIGNMENT FORM    
    

	To assign this Security, fill in the form below:
	

I or we assign and transfer this Security to:
	

	

	

	

(Insert assignee's soc. sec. or tax ID no.):
	

	

	

 (Print or type assignee's name, address and zip code)
	

And irrevocably appoint
	

 agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.
	

Date:	
 	

	

Your Signature:
	

 (Sign exactly as your name appears on the other side of this Security)
	

Signature Guaranteed
	

 Participant in a Recognized Signature Guarantee Medallion Program
	

By:	
 	

 Authorized Signatory

 
 

CONVERSION NOTICE    
    

	To convert this Security into shares of Common Stock of the Company, check the box o
	

To convert only part of this Security, state the principal amount to be converted                      (which must be $1,000 or an integral
multiple of $1,000):
	

If you want the stock certificate made out in another Person's name fill in the form below:
	

	

 (Insert the other Person's soc. sec. tax ID no.)
	

	

	

	

Print or type other Person's name, address and zip code)
	

	

	

QuickLinks

Exhibit 4.09

FACE OF GLOBAL SECURITY

ASSIGNMENT FORM

CONVERSION NOTICE

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