Exhibit 10.1
NEKTAR
THERAPEUTICS
(a Delaware corporation)
$275,000,000
3.25% Convertible Subordinated Notes due
2012
PURCHASE AGREEMENT
September 22, 2005
|
Merrill
|
Lynch, Pierce,
Fenner & Smith
|
Incorporated
4 World Financial Center
New York, New York 10080
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
As Representatives of
the several Initial Purchasers
Ladies and Gentlemen:
Nektar Therapeutics, a Delaware
corporation (the “Company”), confirms its agreement
with each of the Initial Purchasers named in Schedule 1
hereto (collectively, the “Initial Purchasers,” which
term shall also include any initial purchaser substituted as
hereinafter provided in Section 8 hereof), for whom Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Lehman Brothers Inc.
are acting as representatives (in such capacity, the
“Representatives”), with respect to the issue and sale
by the Company and the purchase by the Initial Purchasers, acting
severally and not jointly, of the respective principal amounts set
forth in said Schedule 1 of $275,000,000 aggregate principal
amount of the Company’s 3.25% Convertible Subordinated Notes
due 2012 (the “Firm Notes”), and with respect to the
grant by the Company to the Initial Purchasers, acting severally
and not jointly, of the option described in Section 2(b) hereof
(the “Option”) to purchase all or any part of an
additional $40,000,000 principal amount of the Company’s
3.25% Convertible Subordinated Notes due 2012 (the “Optional
Notes” and, together with the Firm Notes, the
“Notes”).
The Notes will be convertible into
fully paid, nonassessable shares of common stock of the Company,
par value $0.0001 per share (the “Common Stock”), on
the terms, and subject to the conditions, set forth in the
Indenture (as defined below). As used herein, “Conversion
Shares” means the shares of Common Stock into which the Notes
are convertible. The Notes will be issued pursuant to an Indenture
(the “Indenture”) to be dated as of the First Delivery
Date (as defined in Section 2(a)), between the Company and J.P.
Morgan Trust Company, National Association, as trustee (the
“Trustee”).
The Notes will be offered and sold
without being registered under the Securities Act of 1933, as
amended (the “Securities Act”), in reliance on
exemptions therefrom. The Company has prepared and delivered to
each Initial Purchaser copies of a preliminary offering memorandum
dated September 21, 2005 (the “Preliminary Offering
Memorandum”) and has prepared and will deliver to each
Initial Purchaser, on the date hereof or the next succeeding day,
copies of a final offering memorandum dated September 22, 2005 (the
“Final Offering Memorandum”), each for use by such
Initial Purchaser in connection with its solicitation of purchases
of, or offering of, the Notes. “Offering Memorandum”
means, with respect to any date or time referred to in this
Agreement, the most recent offering memorandum (whether the
Preliminary Offering Memorandum or the Final Offering Memorandum,
or any amendment or supplement to either such document) which has
been prepared and delivered by the Company to the Initial
Purchasers in connection with their solicitation of purchases of,
or offering of, the Notes. As used herein, the terms
“Preliminary Offering Memorandum,” “Final
Offering Memorandum” and “Offering Memorandum”
shall include in each case the documents incorporated by reference
therein.
Holders of the Notes (including the
Initial Purchasers and their direct and indirect transferees) will
be entitled to the benefits of a Resale Registration Rights
Agreement, dated the First Delivery Date, between the Company and
the Initial Purchasers (the “Registration Rights
Agreement”), pursuant to which the Company will agree to file
with the Securities and Exchange Commission (the
“Commission”) a shelf registration statement pursuant
to Rule 415 under the Securities Act (the “Registration
Statement”) covering the resale of the Notes and the
Conversion Shares, and to use its best efforts to cause the
Registration Statement to be declared effective.
This Agreement, the Indenture, the
Notes and the Registration Rights Agreement are referred to herein
collectively as the “Operative Documents.”
Capitalized terms used herein
without definition have the respective meanings specified in the
Offering Memorandum.
1. Representations, Warranties
and Agreements of the Company . The Company represents and
warrants to each Initial Purchaser as of the date hereof and as of
each Delivery Date (as defined in Section 2(b)) and agrees with
each Initial Purchaser, as follows:
(a) Each of the Preliminary Offering
Memorandum and the Offering Memorandum, did not as of its
respective date, and the Offering Memorandum will not as of a
Delivery Date (as defined in Section 2(b)), contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided that the Company makes no representation or
warranty as to information contained in or omitted from the
Preliminary
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Offering Memorandum or the Offering
Memorandum in reliance upon and in conformity with written
information furnished to the Company by or on the behalf of any
Initial Purchaser through the Representatives specifically for
inclusion therein.
(b) Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained
in Section 6 and their compliance with the agreements set forth
therein, it is not necessary, in connection with the issuance and
sale of the Notes to the Initial Purchasers and the offer, resale
and delivery of the Notes by the Initial Purchasers in the manner
contemplated by this Agreement, the Indenture, the Registration
Rights Agreement and the Offering Memorandum, to register the Notes
or the Conversion Shares under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the
“Trust Indenture Act”).
(c) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, is duly qualified
to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or
the conduct of its businesses requires such qualification (except
for where the failure to be so qualified would not have a material
adverse effect on the affairs, management, business, properties,
financial condition, results of operations or prospects of the
Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business (a
“Material Adverse Effect”)), and has all power and
authority necessary to own or hold its properties and to conduct
the businesses in which it is engaged, as described in the Offering
Memorandum.
(d) Each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its businesses
requires such qualification (except for where the failure to be so
qualified would not have a Material Adverse Effect) and has all
power and authority necessary to own or hold its properties and to
conduct the businesses in which it is engaged, as described in the
Offering Memorandum; except as otherwise disclosed in the Offering
Memorandum, all of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any such
subsidiary was issued in violation of the preemptive or similar
rights of any securityholder of such subsidiary.
(e) The authorized, issued and
outstanding capital stock of the Company, as of June 30, 2005, is
as set forth in the Offering Memorandum under the column entitled
“Actual” under the caption
“Capitalization,” and all of the issued and outstanding
shares of capital stock of the Company have been duly
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authorized and validly issued, and
are fully paid and nonassessable; none of the outstanding shares of
capital stock of the Company was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company; the capital stock of the Company conforms to the
description thereof contained in the Offering Memorandum and such
description conforms to the rights set forth in the instruments
defining the same; the Conversion Shares, which are authorized on
the date hereof, have been duly authorized and reserved for
issuance upon conversion of the Notes by all necessary corporate
action and are free of preemptive rights; all Conversion Shares,
when so issued and delivered upon such conversion in accordance
with the terms of the Indenture, will be duly authorized and
validly issued, fully paid and nonassessable and free and clear of
all liens, encumbrances, equities or claims; and the issuance of
such Conversion Shares upon such conversion will not be subject to
the preemptive or other similar rights of any securityholder of the
Company.
(f) The execution, delivery and
performance of the Operative Documents by the Company and the
issuance of the Notes and the Conversion Shares and the
consummation of the transactions contemplated hereby and thereby
will not (x) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them are bound or
to which any of the properties or assets of the Company or any
subsidiary is subject, (y) result in any violation of the
provisions of the certificate of incorporation or bylaws of the
Company or any of its subsidiaries or (z) result in any violation
of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
any subsidiary or any of their properties or assets; and except (i)
with respect to the transactions contemplated by the Registration
Rights Agreement, as may be required under the Securities Act, the
Trust Indenture Act and the rules and regulations promulgated
thereunder and (ii) as required by the state securities or
“blue sky” laws, no consent, approval, authorization or
order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery
and performance of the Operative Documents by the Company, and the
consummation of the transactions contemplated hereby and
thereby.
(g) The Company has all necessary
corporate right, power and authority to execute and deliver this
Agreement and perform its obligations hereunder; and this Agreement
has been duly authorized, executed and delivered by the Company and
the transactions contemplated hereby have been duly authorized by
the Company.
(h) The Company has all necessary
corporate right, power and authority to execute and deliver the
Indenture and perform its obligations thereunder; the Indenture has
been duly authorized by the Company, and upon the effectiveness of
the Registration Statement, will be qualified under the
Trust
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Indenture Act; on the First Delivery
Date, the Indenture will have been duly executed and delivered by
the Company and, assuming due authorization, execution and delivery
of the Indenture by the Trustee, will constitute a legally valid
and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, subject
to general principles of equity and to limitations on availability
of equitable relief, including specific performance (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing; and the Indenture conforms
in all material respects to the description thereof contained in
the Offering Memorandum.
(i) The Company has all necessary
corporate right, power and authority to execute and deliver the
Registration Rights Agreement and perform its obligations
thereunder; the Registration Rights Agreement and the transactions
contemplated thereby have been duly authorized by the Company; when
the Registration Rights Agreement is duly executed and delivered by
the Company (assuming due authorization, execution and delivery by
the Initial Purchasers), it will be a legally valid and binding
agreement of the Company enforceable against the Company in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, subject to general
principles of equity and to limitations on availability of
equitable relief, including specific performance (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing, and except with respect to
the rights of indemnification and contribution thereunder, where
enforcement thereof may be limited by federal or state securities
laws or the policies underlying such laws; and the Registration
Rights Agreement conforms in all material respects to the
description thereof contained in the Offering
Memorandum.
(j) The Company has all necessary
corporate right, power and authority to execute, issue and deliver
the Notes and perform its obligations thereunder; the Notes have
been duly authorized by the Company; when the Notes are executed,
authenticated and issued in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers
pursuant to this Agreement on the respective Delivery Date
(assuming due authentication of the Notes by the Trustee), such
Notes will constitute legally valid and binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally,
subject to general principles of equity and to limitations on
availability of equitable relief, including specific performance
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; and the Notes
conform in all material respects to the description thereof
contained in the Offering Memorandum.
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(k) Except for the Rights Agreement,
dated June 1, 2001, between the Company and Mellon Investor
Services LLC., there are no contracts, agreements or understandings
between the Company and any person granting such person the right
(other than rights which have been waived or satisfied) to require
the Company to file a registration statement under the Securities
Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such
securities in any securities being registered pursuant to any
registration statement filed by the Company under the Securities
Act.
(l) Neither the Company nor any of
its subsidiaries has sustained, since the date of the latest
audited financial statements included in the Offering Memorandum,
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree; and, since such date, there has not been
any change in the capital stock or long-term debt of the Company or
any of its subsidiaries (except for (i) any grants under the
Company’s employee stock plans in accordance with the terms
of such plans as described in the Offering Memorandum, or other
shares of Common Stock (or rights to receive Common Stock) issued
to service providers to the Company in the ordinary course of
business (“Authorized Grants”), (ii) the issuance of
common stock upon conversion of outstanding convertible securities
or exercise of any outstanding rights to acquire common stock
pursuant to the Company’s employee stock plans as described
in the Offering Memorandum (“Authorized Issuances”) and
(iii) indebtedness incurred by the Company’s subsidiaries
pursuant to outstanding lines of credit or other debt facilities
not to exceed $10.0 million), or any material adverse change in or
affecting the affairs, management, business, properties, financial
condition, stockholders’ equity, results of operations or
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business, except in all cases as described in the Offering
Memorandum.
(m) The financial statements of the
Company and its consolidated subsidiaries (including the related
notes and supporting schedules) included in the Offering Memorandum
present fairly the financial condition and results of operations of
the Company and its consolidated subsidiaries, at the dates and for
the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods involved. The selected and summary
financial information, if any, included in the Offering Memorandum
presents fairly the information shown therein and has been compiled
on a basis consistent with that of the audited financial statements
included in the Offering Memorandum.
(n) Ernst & Young LLP, who
certified the financial statements and supporting schedules, if
any, of the Company included in the Offering Memorandum, are an
independent registered public accounting firm as required by the
Securities Act and the rules and regulations promulgated
thereunder.
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(o) The Company and its subsidiaries
have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances,
security interests, claims and defects, except such as are
described in the Offering Memorandum or such as do not, singly or
in the aggregate, materially affect the value of such property and
do not interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all real
property and personal property held under lease or sublease by the
Company and its subsidiaries is held by them under valid,
subsisting and enforceable leases (or subleases, as the case may
be) in full force and effect, with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property by the Company or any of its subsidiaries.
Neither the Company nor any of its subsidiaries have notice of any
material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any of its subsidiaries under any
of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such subsidiary to the
continued possession of the leased or subleased premises under any
such lease or sublease.
(p) The Company and its subsidiaries
carry, or are covered by, insurance as is customary for companies
similarly situated and engaged in similar businesses in similar
industries.
(q) The Company and its subsidiaries
own, or possess adequate rights to use, all material trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights and licenses necessary for the conduct of
their business, and have no reason to believe that the conduct of
their business will conflict with, and have not received any notice
of any claim of conflict with, any such rights of
others.
(r) The Company and its subsidiaries
own, or possess adequate rights to use, all material patents
necessary for the conduct of their business. Except as set forth in
the Offering Memorandum, no valid U.S. patent is, or to the
knowledge of the Company would be, infringed by the activities of
the Company or any of its subsidiaries in the manufacture, use,
offer for sale or sale of any product or component thereof as
described in the Offering Memorandum. The patent applications (the
“Patent Applications”) filed by or on behalf of the
Company and its subsidiaries described in the Offering Memorandum
have been properly prepared and filed on behalf of the Company and
its subsidiaries; each of the Patent Applications and patents (the
“Patents”) described in the Offering Memorandum is
assigned or licensed to the Company or its subsidiaries, and,
except as set forth or contemplated in the Offering Memorandum, no
other entity or individual has any right or claim in any Patent,
Patent Application or any patent to be issued therefrom; and, to
the knowledge of the Company, each of the Patent Applications
discloses potentially patentable subject matter. There are
no
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actions, suits or judicial
proceedings pending relating to patents or proprietary information
to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is
subject, and, to the knowledge of the Company, no actions, suits or
judicial proceedings are threatened by governmental authorities or,
except as set forth or contemplated in the Offering Memorandum, or
as could not individually or in the aggregate be reasonably
expected to have a Material Adverse Effect. The Company is not
aware of, except as set forth or contemplated in the Offering
Memorandum, any claim by others that the Company or any of its
subsidiaries is infringing or otherwise violating any patents or
other intellectual property rights of others and is not aware of
any rights of third parties to any of the Company’s or any of
its subsidiaries’ Patent Applications, licensed Patents or
licenses which could affect materially the use thereof by the
Company or any of its subsidiaries. Except as set forth in the
Offering Memorandum, the Company and its subsidiaries own or
possess sufficient licenses or other rights to use all patents,
trade secrets, technology and know-how necessary to conduct their
business as described in the Offering Memorandum.
(s) Except as disclosed in the
Offering Memorandum, the Company and its subsidiaries have filed
with the Food and Drug Administration (the “FDA”) and
the California Food and Drug Branch (“CFDB”) for and
received approval of all registrations, applications, licenses,
requests for exemptions, permits and other regulatory
authorizations necessary to conduct their business as it is
described in the Offering Memorandum; the Company and its
subsidiaries are in material compliance with all such
registrations, applications, licenses, requests for exemptions,
permits and other regulatory authorizations, and all applicable FDA
and CFDB rules and regulations, guidelines and policies, including
but not limited to, applicable FDA and CFDB rules, regulations and
policies relating to current good manufacturing practice
(“CGMP”) and current good laboratory practice
(“CGLP”); the Company has no reason to believe that any
party granting any such registration, application, license, request
for exemption, permit or other authorization is considering
limiting, suspending or revoking the same and knows of no basis for
any such limitation, suspension or revocation.
(t) The human clinical trials,
animal studies and other preclinical tests conducted by the Company
or any subsidiary or in which the Company or any subsidiary has
participated that are described in the Offering Memorandum or the
results of which are referred to in the Offering Memorandum, and,
to the knowledge of the Company, such studies and tests conducted
on behalf of the Company or any of its subsidiaries, were and, if
still pending, are being conducted in accordance with commonly used
or appropriate experimental protocols, procedures and controls
applied by research scientists generally in the preclinical or
clinical study of new drugs; the descriptions or the results of
such studies and tests contained in the Offering Memorandum are
accurate and complete in all material respects, and the Company has
no knowledge of any other studies or tests, the results of which
reasonably call into question the results of such studies and tests
described or referred to in the Offering Memorandum; and neither
the
8
Company nor any of its subsidiaries
has received any notices or other correspondence from the FDA or
any other governmental agency requiring the termination, suspension
or modification of any animal studies or other preclinical tests,
or clinical studies conducted by or on behalf of the Company or any
of its subsidiaries or in which the Company or any of its
subsidiaries has participated that are described in the Offering
Memorandum or the results of which are referred to in the Offering
Memorandum.
(u) Except as disclosed in the
Offering Memorandum, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party
or of which any of their respective properties or assets is the
subject which, if determined adversely to the Company or any
subsidiary might have a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by this Agreement or
the performance by the Company of its obligations hereunder; to the
Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or, except as set forth or
contemplated in the Offering Memorandum, threatened by others; and
the aggregate of all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or of which
any of their respective properties or assets is the subject (other
than the Company’s or any subsidiary’s patent
applications currently pending before the U.S. Patent and Trademark
Office or before any foreign governmental authority that
administers the registration of patents), which are not described
in the Offering Memorandum, including ordinary routine litigation
incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(v) No event has occurred nor has
any circumstance arisen which, had the Notes been issued on such
Delivery Date, would constitute a default or an Event of Default
(as such term is defined in the Indenture).
(w) Neither the Company nor any of
its subsidiaries is (i) in violation of its certificate of
incorporation or bylaws, (ii) in default, and no event has occurred
which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any
of them may be bound or to which any of the properties or assets of
the Company or any of its subsidiaries is subject or (iii) in
violation of any law, ordinance, governmental rule, regulation or
court decree to which any properties or assets of the Company or
any of its subsidiaries may be subject or has failed to obtain any
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of their
properties or to the conduct of their business, except to the
extent that any such default, event or violation described in the
foregoing clauses (i), (ii) and (iii) would not have a Material
Adverse Effect.
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(x) The Company is in compliance in
all material respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
(“ERISA”); no “reportable event” (as
defined in ERISA) has occurred with respect to any “pension
plan” (as defined in ERISA) for which the Company would have
any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan”
or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986,
as amended, including the regulations and published interpretations
thereunder (the “Code”); and each “pension
plan” for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss
of such qualification.
(y) The Company is subject to the
reporting requirements of Section 13 or Section 15(d) of the
Exchange Act. The Company has timely and, except with respect to
the failure to provide information with respect to certain change
of control and severance arrangements with respect to J. Milton
Harris, which information was subsequently provided in an amendment
to the Company’s Form 10-K for the year ended December 31,
2002 filed prior to the date of this Agreement, properly filed with
the Commission all reports and other documents required to have
been filed by it with the Commission pursuant to the Exchange Act
and the Exchange Act Regulations (“Exchange Act
Reports”).
(z) The Company and each of its
subsidiaries, if applicable, have filed all federal, state and
local income and franchise tax returns required to be filed through
the date hereof or have requested extensions thereof and have paid
all taxes due thereon, and no tax deficiency has been determined
adversely to the Company which has had (nor does the Company or any
of its subsidiaries have any knowledge of any tax deficiency which,
if determined adversely to the Company or any of its subsidiaries,
might have) a Material Adverse Effect.
(aa) There has been no storage,
disposal, generation, manufacture, refinement, transportation,
handling or treatment of toxic wastes, medical wastes, hazardous
wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any predecessors
in interest of the Company or any of its subsidiaries) at, upon or
from any of the property now or previously owned or leased by the
Company or any of its subsidiaries in violation of any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit
or which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit,
except for any violation or remedial action which would not have,
or could not be reasonably likely to have, singularly or in the
aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto
such property or into the environment surrounding such property of
any toxic wastes,
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medical wastes, solid wastes,
hazardous wastes or hazardous substances due to or caused by the
Company or any of its subsidiaries or with respect to which the
Company has knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not
have or would not be reasonably likely to have, singularly or in
the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse
Effect; and the terms “hazardous wastes,” “toxic
wastes,” “hazardous substances” and
“medical wastes” shall have the meanings specified in
any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(bb) There are no contracts or other
documents which would be required to be described in the Offering
Memorandum if the Offering Memorandum were a prospectus included in
a registration statement on Form S-1 that have not been so
described in the Offering Memorandum.
(cc) There is no relationship,
direct or indirect, between or among the Company or any of its
subsidiaries, on the one hand, and the directors, executive
officers, shareholders, customers or suppliers of the Company or
any of its subsidiaries, on the other hand, which would be required
to be described in the Offering Memorandum if the Offering
Memorandum were a prospectus included in a registration statement
on Form S-1 that has not been so described.
(dd) Since the date as of which
information is given in the Offering Memorandum through the date
hereof, the Company has not (i) issued or granted any securities
(other than Authorized Grants), (ii) incurred any material
liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary
course of business or referenced in Section 1(l)(iv) above, (iii)
entered into any material transaction not in the ordinary course of
business, other than as referenced in Section 1(l)(iv) above or
(iv) declared or paid any dividend on its capital stock.
(ee) Except as disclosed in the
Offering Memorandum, (i) there are no outstanding securities
convertible into or exchangeable for, or warrants, rights or
options issued by the Company to purchase, any shares of the
capital stock of the Company (except, in the case of options, any
Authorized Grants or Authorized Issuances), (ii) there are no
statutory, contractual, preemptive or other rights to subscribe for
or to purchase any Common Stock and (iii) there are no restrictions
upon transfer of the Common Stock pursuant to the Company’s
certificate of incorporation or bylaws.
(ff) Except as is limited by any
material weakness in internal control over financial reporting
disclosed in the Offering Memorandum, the Company (i) makes and
keeps materially accurate books and records and (ii) maintains
internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with
management’s authorization, (B) transactions are recorded as
necessary to permit preparation of its financial
11
statements and to maintain
accountability for its assets, (C) access to its assets is
permitted only in accordance with management’s authorization
and (D) the reported accountability for its assets is compared with
existing assets at reasonable intervals.
(gg) Neither the Company or any of
its subsidiaries nor any director, officer, agent or employee
acting on behalf of the Company or any of its subsidiaries has (i)
used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity, (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds, (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977 or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(hh) No labor disturbance by the
employees of the Company or any of its subsidiaries exists or, to
the knowledge of the Company, is imminent which might be expected
to have a Material Adverse Effect.
(ii) The Company is not, and upon
the issuance and sale of the Notes as herein contemplated and the
application of the net proceeds therefrom as described in the
Offering Memorandum will not be, an “investment
company” or an entity “controlled” by an
“investment company” as such terms are defined in the
Investment Company Act of 1940, as amended.
(jj) Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained
in Section 6 and their compliance with the agreements set forth
therein, the Securities will be eligible for resale pursuant to
Rule 144A. No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Notes are listed
on any national securities exchange registered under Section 6 of
the Exchange Act or quoted on an automated inter-dealer quotation
system.
(kk) None of the Company or any of
its Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act (“Regulation D”)) (other than the
Initial Purchasers, about which no representation is made by the
Company), has, directly or through an agent, engaged or will engage
in any form of general solicitation or general advertising in
connection with the offering of the Notes (as those terms are used
in Regulation D) under the Securities Act or in any manner
involving a public offering within the meaning of Section 4(2) of
the Securities Act; the Company has not entered into any
contractual arrangement with respect to the distribution of the
Notes except for this Agreement and the Company will not enter into
any such arrangement.
(ll) None of the Company or any of
its affiliates (other than the Initial Purchasers, about which no
representation is made by the Company), has, directly or through
any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any “security” (as
defined in the Securities Act) which is or will be integrated with
the sale of the Notes in a manner that would require the
registration under the Securities Act of the Notes.
12
(mm) The Company has not taken,
directly or indirectly, any action designed to cause or result in,
or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company in connection with the offering of the
Notes.
(nn) No consent, approval or vote of
the Company’s shareholders is necessary or required in
connection with the offering, issuance or sale of the Notes
hereunder or, except as may be required under the Nasdaq National
Market rules if the shares of Common Stock issuable upon conversion
of the Notes exceed 20% of the outstanding voting stock of the
Company, the issuance of shares of Common Stock upon conversion of
the Notes.
(oo) Nektar Alabama is the
Company’s only subsidiary that, for and as of the end of the
most recent year as to which audited financial statements are
included in the Offering Memorandum, had revenues or total assets
that exceeded 10% of the Company’s consolidated revenues for
such fiscal year or total assets as of the end of such fiscal
year.
(pp) There is and has been no
failure on the part of the Company or any of the Company’s
directors or officers, in their capacities as such, to comply in
all material respects with any provision of the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated in connection
therewith, including Section 402 related to loans and Sections 302
and 906 related to certifications.
2. Purchase, Sale and Delivery of
Notes.
(a) Subject to the terms and
conditions and in reliance upon the representations and warranties
herein set forth, the Company agrees to sell to each Initial
Purchaser, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, at a purchase price of
97.15% of the principal amount thereof (the “purchase
price”) the principal amount of Firm Notes set forth opposite
such Initial Purchaser’s name in Schedule 1 hereto (or
such number increased as set forth in Section 8).
Delivery of and payment for the Firm
Notes shall be made at the office of Sidley Austin Brown & Wood
L LP , 555 California Street, San Francisco,
California 94104, at 10:00 a.m. (New York City time) on September
28, 2005, or such later date as the Representatives shall
designate, which date and time may be postponed by agreement
between the Representatives and the Company or as provided in
Section 8 (such date and time of delivery and payment for the Firm
Notes being herein called the “First Delivery Date”).
Delivery of the Firm Notes shall be made to the Initial Purchasers
against payment of the purchase price by the Initial Purchasers.
Payment for the Firm Notes shall be effected either by wire
transfer of immediately available funds to an account with a bank
in The City of New York, the account number and the ABA number for
such bank
13
to be provided by the Company to the
Representatives at least two business days in advance of the First
Delivery Date, or by such other manner of payment as may be agreed
by the Company and the Representatives. It is understood that each
Initial Purchaser has authorized the Representatives, for its
account, to accept delivery of, issue a receipt for, and make
payment of the purchase price for, the Firm Notes that it has
agreed to purchase. The Representatives, individually and not as
representatives of the Initial Purchasers, may (but shall not be
obligated to) make payment of the purchase price for the Firm Notes
to be purchased by any Initial Purchaser whose funds have not been
received by the First Delivery Date but such payment shall not
relieve such Initial Purchaser from its obligations
hereunder.
(b) Subject to the terms and
conditions and in reliance upon the representations and warranties
herein set forth, the Company hereby grants the Option to the
Initial Purchasers to purchase, severally and not jointly, the
Optional Notes at the same price as the Initial Purchasers shall
pay for the Firm Notes and the principal amount of the Optional
Notes to be sold to each Initial Purchaser shall be that principal
amount which bears the same ratio to the aggregate principal amount
of Optional Notes being purchased as the principal amount of Firm
Notes set forth opposite the name of such Initial Purchaser in
Schedule 1 hereto (or such number increased as set forth in
Section 8). The Option may be exercised only to cover
over-allotments in the sale of the Firm Notes by the Initial
Purchasers. The Option may be exercised once in whole or in part at
any time not more than 30 days subsequent to the date of this
Agreement upon notice in writing or by facsimile by the
Representatives to the Company setting forth the amount (which
shall be an integral multiple of $1,000) of Optional Notes as to
which the Initial Purchasers are exercising the Option.
The date for the delivery of and
payment for the Optional Notes, being herein referred to as an
“Optional Delivery Date,” which may be the First
Delivery Date (the First Deli
