Document:

Exhibit
4.2

 

RESALE
REGISTRATION RIGHTS AGREEMENT

 

This Resale Registration Rights Agreement (the “Agreement”) is made
as of October 9, 2003 by and among NEKTAR
THERAPEUTICS, a Delaware corporation (together with any successor
entity, herein referred to as the “Issuer”) and the persons or entities listed
on the signature pages hereto (the “Holders” and each individually as a “Holder”).

 

RECITALS

 

WHEREAS,
each Holder has agreed to acquire from the Issuer 3% Convertible Subordinated
Notes due 2010 (the “Notes”);

 

WHEREAS,
the Notes will be convertible into fully paid, nonassessable common stock, par
value $0.0001 per share, of the Issuer (the “Common Stock”) on the terms, and subject
to the conditions, set forth in the Indenture (as defined herein); and

 

WHEREAS,
to induce each Holder to acquire the Notes, the Issuer has agreed to provide
the registration rights set forth in this Agreement.

 

AGREEMENT

 

The parties hereby agree as follows:

 

1.           Definitions.  As used in this Agreement, the following capitalized terms shall
have the following meanings:

 

Advice:  As defined in Section 4(c)(ii) hereof.

 

Agreement:  As defined in the preamble hereto.

 

Blue
Sky Application:  As
defined in Section 6(a)(i) hereof.

 

Broker-Dealer:  Any broker or dealer registered under the
Exchange Act.

 

Business
Day:  A day other than
a Saturday or Sunday or any federal holiday in the United States.

 

Closing
Date:  The date of
this Agreement.

 

Commission:  Securities and Exchange Commission.

 

Common
Stock:  As defined in
the preamble hereto.

 

Damages
Payment Date:  Each Interest Payment Date.  For purposes of this Agreement, if no Notes
are outstanding, “Damages Payment Date” shall mean each June 30 and
December 30.

 

Effectiveness
Period:  As defined in
Section 2(a)(iii) hereof.

 

 

Effectiveness
Target Date:  As
defined in Section 2(a)(ii) hereof.

 

Exchange
Act:  Securities
Exchange Act of 1934, as amended.

 

Holder:  As defined in the initial paragraph of this
Agreement.

 

Indemnified
Holder:  As defined in
Section 6(a) hereof.

 

Indenture:  The Indenture, dated as of the date
herewith, by and between the Issuer and J.P. Morgan Trust Company, National
Association, as trustee (the “Trustee”), pursuant to which the Notes are to be issued,
as such Indenture is amended, modified or supplemented from time to time in
accordance with the terms thereof.

 

Interest
Payment Date:  As
defined in the Indenture.

 

Issuer:  As defined in the preamble hereto.

 

Liquidated
Damages:  As defined
in Section 3(a) hereof.

 

Majority
of Holders:  Holders
holding over 50% of the aggregate principal amount of Notes outstanding; provided that, for purpose of this
definition, a holder of shares of Common Stock which constitute Transfer
Restricted Securities and were issued upon conversion of the Notes shall be
deemed to hold an aggregate principal amount of Notes (in addition to the
aggregate principal amount of Notes held by such holder) equal to the aggregate
principal amount of Notes converted by such Holder into such shares of Common
Stock.

 

Notes:  As defined in the preamble hereto.

 

Person:  An individual, partnership, corporation,
unincorporated organization, trust, joint venture or a government or agency or
political subdivision thereof.

 

Prospectus:  The prospectus included in a Shelf
Registration Statement, as amended or supplemented by any prospectus supplement
and by all other amendments thereto, including post-effective amendments, and
all material incorporated by reference into such Prospectus.

 

Questionnaire
Deadline:  As defined
in Section 2(b) hereof.

 

Record
Holder:  With respect
to any Damages Payment Date, each Person who is a Holder on the record date
with respect to the Interest Payment Date on which such Damages Payment Date
shall occur.  In the case of a Holder of
shares of Common Stock issued upon conversion of the Notes, “Record Holder”
shall mean each Person who is a Holder of shares of Common Stock which
constitute Transfer Restricted Securities on the June 15 or
December 15 immediately preceding the Damages Payment Date.

 

Registration
Default:  As defined
in Section 3(a) hereof.

 

Sale
Notice:  As defined in
Section 4(e) hereof.

 

Securities
Act:  Securities Act
of 1933, as amended.

 

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Shelf
Filing Deadline: As defined in Section 2(a)(i) hereof.

 

Shelf
Registration Statement: 
As defined in Section 2(a)(i) hereof.

 

Suspension
Period.  As defined in
Section 4(b)(i) hereof.

 

Transfer
Restricted Securities: 
Each Note and each share of Common Stock issued upon conversion of Notes
until the earlier of:

 

(i)        the
date on which such Note or such share of Common Stock issued upon conversion
has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement;

 

(ii)       the
date on which such Note or such share of Common Stock issued upon conversion
(y) is transferred in compliance with Rule 144 under the Securities Act,  or (z) may be sold or transferred pursuant
to Rule 144(k) under the Securities Act (or any other similar provision then in
force); provided, that with
respect to the condition set forth in (z) above, the Issuer shall have notified
the Holder of its willingness to remove the restricted securities legends
placed on such securities as required by the terms of the Indenture upon the
request of the Holder; or

 

(iii)      the date on which such Note or such share of
Common Stock issued upon conversion ceases to be outstanding (whether as a
result of redemption, repurchase and cancellation, conversion or otherwise).

 

Underwritten
Registration or Underwritten Offering:  A registration in which securities of the
Issuer are sold to an underwriter for reoffering to the public.

 

2.             Shelf
Registration.

 

(a)           The Issuer shall:

 

(i)        not
later than 45 days after the date hereof (the “Shelf Filing Deadline”), cause to be
filed a registration statement pursuant to Rule 415 under the Securities Act
(the “Shelf Registration
Statement”), which Shelf Registration Statement shall provide
for resales of all Transfer Restricted Securities held by Holders that have
provided the information required pursuant to the terms of Section 2(b)
hereof;

 

(ii)       use
commercially reasonable efforts  to cause the Shelf Registration Statement
to be declared effective by the Commission as promptly as reasonably
practicable thereafter (the “Effectiveness Target Date”); and

 

(iii)      use commercially reasonable efforts to keep the
Shelf Registration Statement continuously effective, supplemented and amended
as required by the provisions of Section 4(b) hereof to the extent
necessary to ensure that (A) it is available for resales by the Holders of
Transfer Restricted Securities entitled to the benefit of this Agreement and
(B) conforms with the requirements of this Agreement and the Securities

 

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Act and the rules and regulations of the Commission
promulgated thereunder as announced from time to time for a period (the “Effectiveness Period”)
of:

 

(A)       two (2) years after the
date hereof; provided, that such
period shall be extended to the extent the Issuer shall not have notified the
Holder of its willingness to remove the restricted securities legends placed on
such securities as required by the terms of the Indenture upon the request of
the Holder; or

 

(B)       such shorter period that
will terminate when (w) all of the Holders of Transfer Restricted Securities
are able to sell all Transfer Restricted Securities immediately without
restriction pursuant to Rule 144(k) under the Securities Act or any successor
rule thereto; provided, that the
Issuer shall have notified the Holder of its willingness to remove the
restricted securities legends placed on such securities as required by the
terms of the Indenture upon the request of the Holders, (x) when all Transfer
Restricted Securities have ceased to be outstanding (whether as a result of
redemption, repurchase and cancellation, conversion or otherwise),  (y) all Transfer Restricted Securities
registered under the Shelf Registration Statement have been sold or (z) all
Notes and Conversion Shares cease to be Transfer Restricted Securities.

 

(b)           No
Holder of Transfer Restricted Securities may include any of its Transfer
Restricted Securities in the Shelf Registration Statement pursuant to this
Agreement unless such Holder furnishes to the Issuer in writing, prior to or on
the 15th day after becoming a party to this Agreement (the “Questionnaire Deadline”),
a complete and accurate questionnaire in substantially the form of Exhibit A
hereto and such other information as the Issuer may reasonably request for use
in connection with the Shelf Registration Statement or the Prospectus or
preliminary Prospectus included therein and in any application to be filed with
or under state securities laws.  Each
Holder as to which the Shelf Registration Statement is being effected agrees to
furnish promptly to the Issuer all information required to be disclosed in
order to make information previously furnished to the Issuer by such Holder not
materially misleading.

 

3.             Liquidated Damages.

 

(a)           If:

 

(i)        the
Shelf Registration Statement has not been declared effective by the Commission
prior to or on the date 210 days after the date of this Agreement;

 

(ii)       subject
to the provisions of Section 4(b)(i) hereof, the Shelf Registration
Statement is filed and declared effective but, during the Effectiveness Period,
shall thereafter cease to be effective or fail to be usable for its intended
purpose without being succeeded within five Business Days by the filing of a
post-effective amendment to the Shelf Registration Statement or a report filed
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act that, upon effectiveness, cures such failure; or

 

(iii)      prior to or on the 45th, 60th
or 90th day, as the case may be, of any Suspension Period, such
suspension has not been terminated,

 

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(each such event referred
to in foregoing clauses (i) through (iii), a “Registration Default”), the
Issuer hereby agrees to pay additional interest as liquidated damages
(“Liquidated Damages”) with respect to the Transfer Restricted Securities from
and including the day following the Registration Default to but excluding the
day on which the Registration Default has been cured:

 

(A)       in respect of the Notes, to
each holder of Notes, (x) with respect to the first 90-day period during which
a Registration Default shall have occurred and be continuing, in an amount per
year equal to an additional 0.25% of the principal amount of the Notes, and (y)
with respect to the period commencing on the 91st day following the day the
Registration Default shall have occurred and be continuing, in an amount per
year equal to an additional 0.50% of the principal amount of the Notes;
provided that in no event shall Liquidated Damages accrue at a rate per year
exceeding 0.50% of the principal amount of the Notes; and

 

(B)       in respect of any shares of
Common Stock, to each holder of shares of Common Stock issued upon conversion
of Notes, (x) with respect to the first 90-day period during which a
Registration Default shall have occurred and be continuing, in an amount per
year equal to 0.25% of the principal amount of the converted Notes, and (y)
with respect to the period commencing the 91st day following the day the
Registration Default shall have occurred and be continuing, in an amount per
year equal to 0.50% of the principal amount of the converted Notes; provided
that in no event shall Liquidated Damages accrue at a rate per year exceeding
0.50% of the principal amount of the converted Notes.

 

(c)           All
accrued Liquidated Damages shall be paid in arrears to Record Holders by the
Issuer on each Damages Payment Date by wire transfer of immediately available
funds or by federal funds check. 
Following the cure of all Registration Defaults relating to any
particular Note or share of Common Stock, the accrual of Liquidated Damages
with respect to such Note or share of Common Stock will cease.  All obligations of the Issuer set forth in
this Section 3 that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations with
respect to such Transfer Restricted Security shall have been satisfied in full.

 

(d)           The
Liquidated Damages set forth above shall be the exclusive monetary remedy
available to the Holders of Transfer Restricted Securities for such
Registration Default.

 

4.             Registration Procedures.

 

(a)           In
connection with the Shelf Registration Statement, the Issuer shall comply with
all the provisions of Section 4(b) hereof and shall use commercially
reasonable efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended
method or methods of distribution thereof, and pursuant thereto, shall as
expeditiously as possible prepare and file with the Commission a Shelf
Registration Statement relating to the registration on any appropriate form
under the Securities Act.

 

(b)           In
connection with the Shelf Registration Statement and any Prospectus required by
this Agreement to permit the sale or resale of Transfer Restricted Securities,
the Issuer shall:

 

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(i)        Subject
to any notice by the Issuer in accordance with this Section 4(b) of the
existence of any fact or event of the kind described in
Section 4(b)(iii)(D), use commercially reasonable efforts to keep the
Shelf Registration Statement continuously effective during the Effectiveness
Period; upon the occurrence of any event that would cause the Shelf
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not be effective and usable for resale
of Transfer Restricted Securities during the Effectiveness Period, the Issuer
shall file promptly an appropriate amendment to the Shelf Registration
Statement or a report filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, in the case of clause (A), correcting
any such misstatement or omission, and, in the case of either clause (A) or
(B), use commercially reasonable efforts to cause such amendment to be declared
effective and the Shelf Registration Statement and the related Prospectus to
become usable for their intended purposes as soon as practicable thereafter.  Notwithstanding the foregoing, the Issuer
may suspend the effectiveness of the Shelf Registration Statement by written
notice to the Holders:

 

(x)       for
a period (each such period, a “Suspension Period”) 
not to exceed an aggregate of 45 days in any 90-day if (A) an event
occurs and is continuing as a result of which the Shelf Registration Statement
would, in the Issuer’s reasonable judgment, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (B) the Issuer
reasonably determines that the disclosure of such event at such time would have
a material adverse effect on the business of the Issuer (and its subsidiaries,
if any, taken as a whole); provided that in the event the disclosure
relates to a previously undisclosed proposed or pending material business
transaction, the disclosure of which would impede the Issuer’s ability to
consummate such transaction, the Issuer may extend a Suspension Period from 45
days to 60 days; provided, however,
that Suspension Periods shall not exceed an aggregate of 90 days in any 360-day
period; or

 

(y)      upon
the filing of any post-effective amendment required to be filed by the Issuer
pursuant to the Issuer’s obligations under Section 4(b)(iv) until such
time as such post-effective amendment is declared effective.

 

(ii)       Prepare
and file with the Commission such amendments and post-effective amendments to
the Shelf Registration Statement as may be necessary to keep the Shelf
Registration Statement effective during the Effectiveness Period; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act, and to
comply fully with the applicable provisions of Rules 424 and 430A under the
Securities Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
Shelf Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof set forth
in the Shelf Registration Statement or supplement to the Prospectus.

 

(iii)      Advise the selling Holders promptly (but in any
event within five (5) Business Days) and, if requested by any Holder, to
confirm such advice in writing:

 

6

 

(A)       when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to the Shelf Registration Statement or any post-effective amendment
thereto, when the same has become effective,

 

(B)       of any request by the
Commission for amendments to the Shelf Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,

 

(C)       of the issuance by the
Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, or

 

(D)       of the existence of any
fact or the happening of any event, during the Effectiveness Period, that makes
any statement of a material fact made in the Shelf Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated
by reference therein untrue, or that requires the making of any additions to or
changes in the Shelf Registration Statement or the Prospectus in order to make
the statements therein not misleading.

 

If at any time the
Commission shall issue any stop order suspending the effectiveness of the Shelf
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Issuer shall use commercially reasonable efforts to obtain
the withdrawal or lifting of such order at the earliest possible time.

 

(iv)     If requested by any selling
Holders, promptly incorporate in the Shelf Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if necessary,
such information as such selling Holders, if any, may reasonably request to
have included therein, including, without limitation: (1) information relating
to the “Plan of Distribution” of the Transfer Restricted Securities, or (2) any
other terms of the offering of the Transfer Restricted Securities to be sold in
such offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as reasonably practicable after the Issuer is
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment. 
Notwithstanding the foregoing, following the effective date of the Shelf
Registration Statement, the Issuer shall not be required to file at the request
of the Holders more than one such supplement or post-effective amendment to
reflect (x) changes in the amount of Notes held by or the identity of any
Holder, or (y) the addition of any Holder, in any 30-day period.

 

(v)      Make available to each
selling Holder, without charge, at least one copy of the Shelf Registration
Statement, as first filed with the Commission, and of each amendment thereto
(and any documents incorporated by reference therein or exhibits

 

7

 

thereto (or exhibits incorporated in such exhibits by
reference) as such Person may request).

 

(vi)     Make available to each
selling Holder, without charge, as many copies of the Prospectus (including
each preliminary prospectus) and any amendment or supplement thereto as such
Holders reasonably may request; subject to any notice by the Issuer in
accordance with this Section 4(b) of the existence of any fact or event of
the kind described in Section 4(b)(iii)(D), the Issuer hereby consents to
the use of the Prospectus and any amendment or supplement thereto by each of
the selling Holders and each of the underwriter(s), if any, in connection with
the offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto.

 

(vii)    Cooperate with the selling
Holders in connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may reasonably request and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however,
that the Issuer shall not be required (A) to register or qualify as a foreign
corporation or a dealer of securities where it is not now so qualified or to
take any action that would subject it to the service of process in any
jurisdiction where it is not now so subject or (B) to subject themselves to
taxation in any such jurisdiction if they are not now so subject.

 

(viii)   Cooperate with the selling
Holders to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends (unless required by applicable securities laws); and enable
such Transfer Restricted Securities to be in such denominations and registered
in such names as the Holders may request at least two (2) Business Days before
any sale of Transfer Restricted Securities made by such underwriter(s).

 

(ix)      Use commercially reasonable
efforts to cause the Transfer Restricted Securities covered by the Shelf
Registration Statement to be registered with or approved by such other U.S.
governmental agencies or authorities as may be necessary to enable the Holders
to consummate the disposition of such Transfer Restricted Securities.

 

(x)       Subject to
Section 4(b)(i) hereof, if any fact or event contemplated by
Section 4(b)(iii)(D) hereof shall exist or have occurred, use commercially
reasonable efforts to prepare a supplement or post-effective amendment to the
Shelf Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an 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.

 

(xi)      Provide CUSIP numbers for
all Transfer Restricted Securities not later than the effective date of the
Shelf Registration Statement and provide the Trustee under

 

8

 

the Indenture with certificates for the Notes that are
in a form eligible for deposit with The Depository Trust Company.

 

(xii)     Otherwise use commercially
reasonable efforts to comply with all applicable rules and regulations of the
Commission and all reporting requirements under the rules and regulations of
the Exchange Act.

 

(xiii)    Cause all Transfer Restricted
Securities covered by the Shelf Registration Statement to be listed or quoted,
as the case may be, on each securities exchange or automated quotation system
on which similar securities issued by the Issuer are then listed or quoted.

 

(c)           Each
Holder agrees by acquisition of a Transfer Restricted Security that, upon
receipt of any notice from the Issuer of the existence of any fact of the kind
described in Section 4(b)(iii)(D) hereof, such Holder will, and will use
its reasonable best efforts to cause any underwriter(s) in an Underwritten
Offering to, forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the Shelf Registration Statement until:

 

(i)        such Holder has received
copies of the supplemented or amended Prospectus contemplated by
Section 4(b)(x) hereof; or

 

(ii)       such Holder is advised in
writing (the “Advice”)
by the Issuer that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus.

 

If so directed by the Issuer, each Holder will deliver to the Issuer
all copies, other than permanent file copies then in such Holder’s possession,
of the Prospectus covering such Transfer Restricted Securities that was current
at the time of receipt of such notice of suspension.

 

(d)           Each
Holder who intends to be named as a selling Holder in the Shelf Registration
Statement shall furnish to the Issuer in writing, within 15 days after becoming
a party hereto, a complete and accurate questionnaire in substantially the form
set forth as Exhibit A hereto and such other information regarding such Holder
and the proposed distribution by such Holder of its Transfer Restricted Securities
as the Issuer may reasonably request for use in connection with the Shelf
Registration Statement or Prospectus or preliminary Prospectus included
therein.  Holders that do not complete
the questionnaire and deliver it to the Issuer on or prior to the Questionnaire
Deadline shall not be named as selling securityholders in the Prospectus or
preliminary Prospectus included in the Shelf Registration Statement and
therefore shall not be permitted to sell any Transfer Restricted Securities
pursuant to the Shelf Registration Statement. 
Each Holder who intends to be named as a selling Holder in the Shelf
Registration Statement shall promptly furnish to the Issuer in writing such
other information as the Issuer may from time to time reasonably request in
writing.

 

(e)           Upon
the effectiveness of the Shelf Registration Statement, each Holder shall notify
the Issuer at least three (3) Business Days prior to any intended distribution
of Transfer Restricted Securities pursuant to the Shelf Registration Statement
(a “Sale Notice”),
which notice shall be effective for five (5) Business Days.  Each Holder of this Security, by accepting
the same, agrees to hold any communication by the Issuer in response to a Sale
Notice in

 

9

 

confidence.  Upon any transfer
of Transfer Restricted Securities pursuant to the Shelf Registration Statement,
each Holder shall comply with all such Holder’s obligations relating to
delivery of the Prospectus under applicable securities laws.  The Issuer and its representatives shall be
entitled to rely on the foregoing covenant as evidence of compliance with such
obligations by such Holder in connection with (i) any instruction
requested of it in connection with such transfer by the Trustee of the Notes or
the transfer agent of the Common Stock or (ii) any representation made by
the Issuer or such representative to any governing authority, including, the
Commission or NASD.

 

5.             Registration Expenses.  All expenses incident to the Issuer’s
performance of or compliance with this Agreement shall be borne by the Issuer
regardless of whether a Shelf Registration Statement becomes effective, which
shall include:

 

(a)           all
registration and filing fees and expenses (including filings made by any
Holders with the NASD);

 

(b)           all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws;

 

(c)           all
expenses of printing (including printing of Prospectuses and certificates for
the Common Stock to be issued upon conversion of the Notes), messenger and
delivery services and telephone charges;

 

(d)           all
fees and disbursements of counsel to the Issuer;

 

(e)           all
application and filing fees in connection with listing (or authorizing for
quotation) the Common Stock on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and

 

(f)            all
fees and disbursements of independent certified public accountants of the
Issuer (including the expenses of any special audit and comfort letters
required by or incident to such performance).

 

The Issuer shall bear its internal expenses
(including, without limitation, all salaries and expenses of their officers and
employees performing legal, accounting or other duties), the expenses of any
annual audit and the fees and expenses of any Person, including special
experts, retained by the Issuer.

 

6.             Indemnification and Contribution.

 

(a)           The
Issuer shall indemnify and hold harmless each Holder, such Holder’s officers
and employees and each person, if any, who controls such Holder within the
meaning of the Securities Act (each, an “Indemnified Holder”), from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to resales of the Transfer Restricted Securities), to which
such Indemnified Holder may become subject, insofar as any such loss, claim,
damage, liability or action arises out of, or is based upon:

 

10

 

(i)        any untrue statement or
alleged untrue statement of a material fact contained in (A) the Shelf
Registration Statement or Prospectus or any amendment or supplement thereto or
(B) any blue sky application or other document or any amendment or supplement
thereto prepared or executed by the Issuer (or based upon written information
furnished by or on behalf of the Issuer expressly for use in such blue sky
application or other document or amendment on supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Transfer Restricted Securities under the securities law of any state or other
jurisdiction (such application or document being hereinafter called a “Blue Sky Application”);
or

 

(ii)       the omission or alleged
omission to state therein 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,

 

and shall reimburse each
Indemnified Holder promptly upon demand for any legal or other expenses
reasonably incurred by such Indemnified Holder in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the Issuer shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in the Shelf Registration
Statement or Prospectus or amendment or supplement thereto or Blue Sky
Application in reliance upon and in conformity with written information
furnished to the Issuer by or on behalf of any Holder (or its related
Indemnified Holder) specifically for use therein.  The foregoing indemnity agreement is in addition to any liability
which the Issuer may otherwise have to any Indemnified Holder.

 

(b)           Each
Holder, severally and not jointly, shall indemnify and hold harmless the
Issuer, its officers and employees and each person, if any, who controls the
Issuer within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Issuer or any such officer, employee or controlling person may
become subject, insofar as any such loss, claim, damage or liability or action
arises out of, or is based upon:

 

(i)        any untrue statement or
alleged untrue statement of any material fact contained in the Shelf Registration
Statement or Prospectus or any amendment or supplement thereto or any Blue Sky
Application; or

 

(ii)       the omission or the alleged
omission to state therein any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading,

 

but in each case only to
the extent that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written information
furnished to the Issuer by or on behalf of such Holder (or its related
Indemnified Holder) specifically for use therein, and shall reimburse the
Issuer and any such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by the Issuer or any
such officer, employee or controlling person in

 

11

 

connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred.  The foregoing indemnity agreement is in
addition to any liability which any Holder may otherwise have to the Issuer and
any such officer, employee or controlling person.

 

(c)           Promptly
after receipt by an indemnified party under this Section 6 of notice of
any claim or the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 6, notify the indemnifying party in writing of the claim or
the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 6
except to the extent it has been materially prejudiced by such failure and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 6.  If any such claim or action shall be brought
against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and,
to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel satisfactory to
the indemnified party.  After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 6 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however, that a Majority of
Holders shall have the right to employ a single counsel to represent jointly a
Majority of Holders and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by a Majority of Holders against the Issuer under
this Section 6, if a Majority of Holders shall have reasonably concluded
that there may be one or more legal defenses available to them and their
respective officers, employees and controlling persons that are different from
or additional to those available to the Issuer and its officers, employees and
controlling persons, the fees and expenses of a single separate counsel shall
be paid by the Issuer.  No indemnifying
party shall:

 

(i)        without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld) settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent
(1) includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and
(2) 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, or

 

(ii)       be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss of liability by reason of such settlement or
judgment.

 

12

 

(d)           If
the indemnification provided for in this Section 6 shall for any reason be
unavailable or insufficient to hold harmless an indemnified party under
Section 6(a) or 6(b) in respect of any loss, claim, damage or liability
(or action in respect thereof) referred to therein, each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability (or action in respect thereof):

 

(i)        in such proportion as is
appropriate to reflect the relative benefits received by the Issuer from the
offering and sale of the Transfer Restricted Securities on the one hand and a
Holder with respect to the sale by such Holder of the Transfer Restricted
Securities on the other, or

 

(ii)       if the allocation provided
by clause (6)(d)(i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
6(d)(i) but also the relative fault of the Issuer on the one hand and the
Holders on the other in connection with the statements or omissions or alleged
statements or alleged omissions that resulted in such loss, claim, damage or
liability (or action in respect thereof), as well as any other relevant
equitable considerations.

 

The relative benefits received by the Issuer on the
one hand and a Holder on the other with respect to such offering and such sale
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Notes (before deducting expenses) received by the Issuer, on
the one hand, bear to the total proceeds received by such Holder with respect
to its sale if Transfer Restricted Securities on the other.

 

The relative fault of the parties shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer on the one hand or the Holders on the other,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission.

 

The Issuer and each Holder agree that it would not be
just and equitable if the amount of contribution pursuant to this
Section 6(d) were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to in the first sentence of this paragraph (d).  The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 6 shall be deemed to include,
for purposes of this Section 6, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating, or
defending or preparing to defend any such litigation, investigation or
proceeding by any governmental agency or body, or commenced or threatened
action or claim.  Notwithstanding the
provisions of this Section 6, no Holder shall be required to contribute
any amount in excess of the amount by which the total price at which the
Transfer Restricted Securities purchased by it were resold exceeds the amount
of any damages which such Holder has otherwise been required to pay by reason
of any 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

 

13

 

fraudulent misrepresentation. 
The Holders’ obligations to contribute as provided in this
Section 6(d) are several and not joint.

 

7.             Selection of Underwriters.  In the event any Holder of Transfer
Restricted Securities covered by the Shelf Registration Statement proposes to
dispose of such Transfer Restricted Securities through an Underwritten
Offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by a Majority of Holders
whose Transfer Restricted Securities are included in such offering; provided,
that such investment bankers and managers must be reasonably satisfactory to
the Issuer.

 

8.             Miscellaneous.

 

(a)           Amendments
and Waivers. Except as set forth pursuant to Section 8(c) and
Section 8(i) hereto, this Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, unless the Issuer has obtained the written consent of
a Majority of Holders.

 

(b)           Notices.
All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, first-class mail (registered or certified,
return receipt requested), electronic mail, telex, telecopier, or air courier
guaranteeing overnight delivery:

 

(i)        if to a Holder, at the
address set forth on the records of the registrar under the Indenture or the
transfer agent of the Common Stock, as the case may be; and

 

(ii)       if to the Issuer:

 

Nektar Therapeutics

150 Industrial Road

San Carlos, California 94070

Attention: Secretary

 

With a copy to:

 

Cooley Godward LLP 

Five Palo Alto Square

3000 El Camino Real

Palo Alto, CA 94306

Attention:  John M. Geschke, Esq.

 

All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
five (5) Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied or electronically mailed; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.

 

(c)           Successors
and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including
without limitation

 

14

 

assignees of the Holders of Transfer Restricted Securities.  The rights to cause the Issuer to register
Transfer Restricted Securities pursuant to this Agreement may be assigned by a
Holder to a transferee or assignee of Transfer Restricted Securities that (a)
is a subsidiary, parent, general partner, limited partner, retired partner,
member or retired member of a Holder, or (b) is an entity affiliated by common
control with such Holder; provided, however,
that (i) the Holder shall, with five (5) days after such transfer, furnish to
the Company written notice of the name and address of such assignee, (ii) such
assignee shall agree in writing to be bound by the terms and conditions of this
Agreement, (iii) the inclusion of the assignee as a selling securityholder and
the Transfer Restricted Securities held by such assignee in the Shelf
Registration Statement may be accomplished by a Prospectus supplement filed
pursuant to Rule 424 under the Securities Act and shall not require a post-effective
amendment to the Shelf Registration Statement, and (iv) nothing contained
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Securities in violation of the Indenture.

 

(d)           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 an original and all of which taken together shall constitute one and the same agreement.

 

(e)           Securities
Held by the Issuer or its Affiliates.  Whenever the consent or approval of Holders of a specified
percentage of Transfer Restricted Securities is required hereunder, Transfer
Restricted Securities held by the Issuer or its “affiliates” (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.

 

(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 law of the State of
California, without regard to conflict of laws principles thereof.

 

(h)           Severability.
If any one or more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be affected
or impaired thereby.

 

(i)            Additional Holders.  Notwithstanding anything to the contrary
contained herein, if the Issuer shall sell additional Notes under the Indenture
prior to the date that the Commission declares the Shelf Registration Statement
effective, any such holder of such Notes shall become a party to this Agreement
by executing and delivering an additional counterpart signature page to this
Agreement and shall be deemed a “Holder” and a party hereunder without the
approval of the Holders; provided, however,
that if such sale of additional Notes is after the effectiveness of the Shelf
Registration Statement, then such holder of such Notes shall become a party to
this Agreement only with the approval of a Majority of Holders.

 

15

 

(j)            Entire
Agreement.  This Agreement is
intended by the parties as a final expression of their agreement and 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.  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 Issuer with respect to
the Transfer Restricted Securities. 
This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.

 

16

 

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

 

	
  NEKTAR THERAPEUTICS

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/
  Ajay Bansal

  	
   

  
	
   

  	
  Ajay
  Bansal

  	
   

  
	
   

  	
  Chief
  Financial Officer

  	
   

  
					

 

RESALE REGISTRATION
RIGHTS AGREEMENT

SIGNATURE PAGE

 

 

HOLDERS:

 

Salomon
Brothers Qualified Investor Portfolios Multi-Strategy Arbitrage Portfolio
Salomon Brothers Diversified Arbitrage
Strategies Fund Ltd.
Salomon Brothers Enhanced Arbitrage
Strategies Fund
CEBT- Comingled Employee Benefit Trust
– Capital Structure Arbitrage
General Motors Employees Global Group
Pension Trust
General Motors Welfare Benefits Trust
Salomon Brothers Market Neutral
Arbitrage Fund L.P.

 

	
  By:

  	
  Salomon Brothers Asset
  Management, Inc.,

  the investment manager of each of the above listed Holders.

  

 

 

	
  Signature:

  	
  /s/ Kenneth Lee

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name:

  	
  Kenneth Lee

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Director

  	
   

  
					

 

 

HOLDERS:

 

ALEXANDRA GLOBAL MASTER FUND LTD.

 

	
  By:

  	
  Alexandra Investment
  Management, LLC, 

  as Investment Advisor

  

 

	
  Signature:

  	
  /s/ Mikhail Filimonov

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name:

  	
  Mikhail Filimonov

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chairman, CEO &
  Chief Investment Officer

  	
   

  
						

 

NEKTAR
THERAPEUTICS

 

SELLING
SECURITYHOLDER NOTICE AND QUESTIONNAIRE

The
undersigned beneficial holder of 3% Convertible Subordinated Notes due 2010
(the “Notes”) of Nektar Therapeutics (the “Issuer”), or common stock, par value
$0.0001 per share (the “Shares” and together with the Notes, the “Transfer
Restricted Securities”) of the Issuer understands that the Issuer has filed, or
intends to file, with the Securities and Exchange Commission (the “Commission”)
a registration statement (the “Shelf Registration Statement”), for the
registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”), of the Transfer Restricted Securities in
accordance with the terms of the Registration Rights Agreement, dated as of
October 9, 2003 (the “Registration Rights Agreement”) between the Issuer and
certain holders of the Transfer Restricted Securities.  All capitalized terms
not otherwise defined herein have the meaning ascribed thereto in the
Registration Rights Agreement.

In
order to sell or otherwise dispose of any Transfer Restricted Securities
pursuant to the Shelf Registration Statement, the Holder will be required to be
named as a selling securityholder in the related Prospectus, deliver a
Prospectus to purchasers of Transfer Restricted Securities and be bound by
those provisions of the Registration Rights Agreement applicable to the Holder
(including certain indemnification provisions, as described below).  Holders that do not complete this Notice and
Questionnaire within 15 days of becoming a party to the Registration Rights
Agreement and deliver it to the Issuer as provided below will not be named as
selling securityholders in the Prospectus and therefore will not be permitted
to sell any Transfer Restricted Securities pursuant to the Shelf Registration
Statement.

Certain
legal consequences arise from being named as a selling securityholder in the
Shelf Registration Statement and the related Prospectus.  Accordingly, Holders and beneficial owners
of Transfer Restricted Securities are advised to consult their own securities
law counsel regarding the consequences of being named or not being named as a
selling securityholder in the Shelf Registration Statement and the related
Prospectus.

NOTICE

The
undersigned Holder (the “Selling Securityholder”) of Transfer Restricted
Securities hereby gives notice to the Issuer of its intention to sell or
otherwise dispose of Transfer Restricted Securities beneficially owned by it and
listed below in Item 3 (unless otherwise specified under Item 3) pursuant to
the Shelf Registration Statement.  The
undersigned, by signing and returning this Notice and Questionnaire,
understands that it will be bound by the terms and conditions of this Notice
and Questionnaire and the Registration Rights Agreement.

Pursuant
to the Registration Rights Agreement, the undersigned has agreed to indemnify
and hold harmless the Issuer, the Issuer’s directors, the Issuer’s officers who
sign the Shelf Registration Statement and each person, if any, who controls the
Issuer within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against certain losses arising in connection
with statements concerning the undersigned made in the Shelf Registration
Statement or the related Prospectus in reliance upon the information provided

1

in this Notice and Questionnaire.

The
undersigned hereby provides the following information to the Issuer and
represents and warrants that such information is accurate and complete:

QUESTIONNAIRE

1.                                       (a)                                  Full legal name of Selling Securityholder:

                                                                                                                                                                                                                

(b)                                 Full legal name of registered holder (if
not the same as (a) above) through which Transfer Restricted Securities listed
in (3) below are held:

                                                                                                                                                                                

(c)                                  Full legal name of DTC participant (if
applicable and if not the same as (b) above) through which Transfer Restricted
Securities listed in (3) are held:

                                                                                                                                                                                                                

(d)                                 If the Selling Securityholder is a
privately-owned entity, list the full legal name of each natural person with
voting or investment control over securities of the Company held (or to be held
as of the time of purchase of the Notes) by the Selling Securityholder:

                                                                                                                                                                                                                

                                                                                                                                                                                                                

2.                                       Address for notices to Selling
Securityholder:

                                                                                                                                                                                                                

                                                                                                                                                                                                                

                                                                                                                                                                                                                

Telephone:                                                                                                                                                            

Fax:                                                                                                                                                                         

Contact Person:                                                                                                                                    

3.                                       Beneficial ownership of Transfer
Restricted Securities:

(a)                                  Type of Transfer Restricted Securities
beneficially owned, and principal amount of Notes or number of shares of Common
Stock, as the case may be, beneficially owned:

2

 

                                                                                                                                                                                                                

                                                                                                                                                                                                                

(b)                                  CUSIP No(s). of such Transfer Restricted
Securities beneficially owned:

                                                                                                                                                                                                                

                                                                                                                                                                                                                

4.                                       Beneficial ownership of the Issuer’s
securities owned by the Selling Securityholder:

Except as set forth below
in this Item (4), the undersigned is not the beneficial or registered owner of
any securities of the Issuer other than the Transfer Restricted Securities
listed above in Item (3) (“Other Securities”).

(a)                                  Type and amount of Other Securities
beneficially owned by the Selling Securityholder:

                                                                                                                                                                                                                

                                                                                                                                                                                                                

(b)                                 CUSIP No(s). of such Other Securities
beneficially owned:

                                                                                                                                                                                                                

                                                                                                                                                                                                                

5.                                       Relationship with the Issuer

Except as set forth below, neither
the undersigned nor any of its affiliates, officers, directors or principal
equity holders (5% or more) has held any position or office or has had any
other material relationship with the Issuer (or their predecessors or
affiliates) during the past three years.

State any exceptions
here:                                                                                                  

                                                                                                                                                                                                                

6.                                       Plan of Distribution

Except as set forth below, the
undersigned (including its donees or pledgees) intends to distribute the
Transfer Restricted Securities listed above in Item (3) pursuant to the Shelf
Registration Statement only as follows (if at all).  Such Transfer Restricted Securities may be sold from time to time
directly by the undersigned or, alternatively, through underwriters,
broker-dealers or agents.  If the
Transfer Restricted Securities are sold through underwriters or broker-dealers,
the Selling Securityholder will be responsible

3

 

for underwriting discounts or
commissions or agent’s commissions. 
Such Transfer Restricted Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale, or at negotiated prices.  Such sales may be effected in transactions
(which may involve crosses or block transactions):

(i)                                  on
any national securities exchange or quotation service on which the Transfer
Restricted Securities may be listed or quoted at the time of sale;

(ii)                              in
the over-the-counter market;

(iii)                          in
transactions otherwise than on such exchanges or services or in the
over-the-counter market; or

(iv)                            through
the writing of options.

In
connection with sales of the Transfer Restricted Securities or otherwise, the
undersigned may enter into hedging transactions with broker-dealers, which may
in turn engage in short sales of the Transfer Restricted Securities and deliver
Transfer Restricted Securities to close out such short positions, or loan or
pledge Transfer Restricted Securities to broker-dealers that in turn may sell
such securities.  Notwithstanding the
forgoing, the undersigned understands that the Transfer Restricted Seucurities
may not be delivered to clos out any short position entered into prior to the
effective date of the Shelf Registration Statement.

State any exceptions here:                                                                                                  

                                                                                                                                                                

Note:
In no event will
such method(s) of distribution take the form of an underwritten offering of the
Transfer Restricted Securities without the prior agreement of the Issuer.

7.                                       Please complete
the following by checking the applicable box:

	
  (a)

  	
   

  	
  o Yes.

  	
   

  	
  o No.

  	
   

  	
  The Selling Securityholder
  received the Notes as compensation for the sale of securities or the delivery
  of investment services.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  o Yes.

  	
   

  	
  o No.

  	
   

  	
  The Selling Securityholder
  is a registered Broker-Dealer under the Exchange Act.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  o Yes.

  	
   

  	
  o No.

  	
   

  	
  The Selling Securityholder
  is an “affiliate” (as defined in the Exchange Act) of a registered Broker-Dealer
  under the Exchange Act.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  If the Selling
  Securityholder is such an “affiliate”:

  

 

4

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  o Yes.

  	
   

  	
  o No.

  	
   

  	
  The Selling Securityholder
  is purchasing the Notes in the ordinary course of business.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  o Yes.

  	
   

  	
  o No.

  	
   

  	
  The Selling Securityholder
  does not and, as of the time of purchase of the Notes, did not have any
  agreement or understanding, whether directly or indirectly, with any person
  or entity to distribute or resell the Notes.

  

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  o Yes.

  	
   

  	
  o No.

  	
   

  	
  The Selling Securityholder
  does not have and, as of the time of purchase of the Notes, did not have any
  open short position in the securities of the Company.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  If the Selling
  Securityholder does have such an open short position, indicate the size of
  that short position:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

The undersigned
acknowledges that it understands its obligation to comply with the provisions
of the Exchange Act and the rules and regulations promulgated thereunder
relating to stock manipulation, particularly Regulation M thereunder (or any
successor rules or regulations), in connection with any offering of Transfer
Restricted Securities pursuant to the Shelf Registration Statement.  The undersigned agrees that neither it nor
any person acting on its behalf will engage in any transaction in violation of
such provisions.

The Selling
Securityholder hereby acknowledges its obligations under the Registration
Rights Agreement to indemnify and hold harmless certain persons as set forth
therein and to deliver the Prospectus as required under applicable securities
laws.

Pursuant to the
Registration Rights Agreement, the Issuer has agreed under certain
circumstances to indemnify the Selling Securityholders against certain
liabilities.

In accordance with
the undersigned’s obligation under the Registration Rights Agreement to provide
such information as may be required by law for inclusion in the Shelf
Registration Statement, the undersigned agrees to promptly notify the Issuer of
any inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective.  All
notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing at the address set forth below.

By signing below,
the undersigned consents to the disclosure of the information contained herein
in its answers to items (1) through (7) above and the inclusion of such
information in the Shelf Registration Statement and the related Prospectus. The
undersigned understands that such information will be relied upon by the Issuer
in connection with the preparation or amendment of the Shelf Registration
Statement and the related Prospectus.

5

IN WITNESS
WHEREOF, the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

Dated: ______________

 

                                                                                                

Name of Beneficial Owner

 

By:                                                                                          

Name:

Title:

 

 

 

Please return the
completed and executed Notice and Questionnaire, by mail or facsimile, to:

Steve Kuan

Cooley Godward LLP

Five Palo Alto
Square

3000 El Camino
Real

Palo Alto, CA
94306-2155

Facsimile:  (650) 849-7400

 

with a copy to:

Nektar
Therapeutics

150 Industrial Road

San Carlos, California 94070

Attention:  Assistant Secretary

Facsimile: 
(650) 620-5360Exhibit 4.3

 

FORM OF SECURITY

 

[FACE OF SECURITY]

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) TO NEKTAR THERAPEUTICS
(OR ITS SUCCESSOR) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
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.(1)

 

THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE.  BY
ACQUISITION HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE
SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
SECURITY EXCEPT (A) TO NEKTAR THERAPEUTICS (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF,
(B) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), (C) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (D)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER; AND (2) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE (1)(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF THE
SECURITY EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH
SECURITY (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (1)(D) ABOVE), THE
HOLDER MUST MAKE THE REPRESENTATIONS AND WARRANTIES SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE).  IF THE PROPOSED TRANSFER IS PURSUANT TO
CLAUSE (1)(B) OR (1)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING 

 

(1) This legend should be
included on if the Security is issued in global form

 

 

MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.  THIS LEGEND WILL BE REMOVED UPON
THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO
CLAUSE (1)(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL
ISSUANCE OF THE SECURITY EVIDENCED HEREBY.

 

2

 

NEKTAR
THERAPEUTICS

 

3%
Convertible Subordinated Note due 2010

 

CUSIP NO. 640268 AC

 

	
  No.
  1

  	
  $

  	
   

  

 

NEKTAR THERAPEUTICS, a Delaware corporation (the
“Company,” which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Cede
& Co., or its registered assigns, the principal sum of U.S. Dollars
($                        )
on June 30, 2010.

 

Interest Payment Dates: June 30 and December 30,
commencing December 30, 2003

 

Regular Record Dates: June 15 and December 15

 

Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.

 

3

 

IN WITNESS
WHEREOF, the Company has caused this Security to be duly executed manually or
by facsimile by its duly authorized officers.

 

	
  Dated:  October 9, 2003

  	
   

  
	
   

  	
   

  
	
   

  	
  NEKTAR THERAPEUTICS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

Trustee’s
Certificate of Authentication

 

This is one of the 3% Convertible Subordinated Notes
due 2010 described in the within-named Indenture.

 

	
  J.P. MORGAN
  TRUST COMPANY,

  NATIONAL ASSOCIATION, as Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  
	
   

  
	
  Dated: October 9, 2003

  

 

4

 

[REVERSE OF SECURITY]

 

NEKTAR THERAPEUTICS

 

3% Convertible Subordinated Note due 2010

 

Capitalized terms used herein but not defined shall
have the meanings assigned to them in the Indenture referred to below unless
otherwise indicated.

 

Principal and Interest.

 

Nektar Therapeutics, a Delaware corporation (the
“Company”) promises to pay interest on the principal amount of this Security at
the rate of 3 percent per annum from October 9, 2003 until repayment at
Maturity, redemption or repurchase.  The
Company will pay interest on this Security semiannually in arrears on June 30
and December 30 of each year (each an “Interest Payment Date”), commencing
December 30, 2003.

 

Interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months.

 

A Holder of any Security at the close of business on a
Regular Record Date shall be entitled to receive interest on such Security on
the corresponding Interest Payment Date. 
A Holder of any Security which is converted after the close of business
on a Regular Record Date and prior to the corresponding Interest Payment Date
(other than any Security whose Maturity is prior to such Interest Payment Date)
shall be entitled to receive interest on the principal amount of such Security,
notwithstanding the conversion of such Security prior to such Interest Payment
Date.  However, any such Holder which
surrenders any such Security for conversion during the period between the close
of business on such Regular Record Date and ending with the opening of business
on the corresponding Interest Payment Date shall be required to pay the Company
an amount equal to the interest on the principal amount of such Security so
converted, which is payable by the Company to such Holder on such Interest
Payment Date, at the time such Holder surrenders such Security for
conversion.  Notwithstanding the
foregoing, any such Holder which surrenders for conversion any Security which
has been called for redemption by the Company in a notice of redemption given
by the Company pursuant to Section 10.5 of the Indenture shall be entitled
to receive (and retain) such interest and need not pay the Company an amount
equal to the interest on the principal amount of such Security so converted at
the time such Holder surrenders such Security for conversion.

 

To the maximum extent permitted by applicable law, in
the event that any amounts owing in respect of the principal of, the premium
(if any) or interest on the Securities is not paid in full on the due date
therefor, interest shall accrue on such unpaid amounts at the rate of 3% per
annum until such amounts are paid in full.

 

In accordance with the terms of the Resale
Registration Rights Agreement, dated October 9, 2003, between the Company
and the Initial Purchasers party thereto (the “Registration Rights Agreement”),
during the first 90 days following a Registration Default (as 

 

5

 

defined in the Registration Rights Agreement), the interest rate borne
by the Securities shall be increased by 0.25% on:

 

(a)   May 7, 2004, if the Shelf Registration
Statement is not declared effective by the Securities and Exchange Commission
prior to or on May 6, 2004;

 

(b)   the day after the fifth Business Day after
the Shelf Registration Statement, previously declared effective, ceases to be
effective or fails to be usable, if a post-effective amendment (or report filed
pursuant to the Exchange Act) that, upon effectiveness would cure the Shelf
Registration Statement is not filed with the Securities and Exchange Commission
during such five Business Day period; or

 

(c)   the day following the 45th, 60th
or 90th day, as the case may be, of any Suspension Period (as defined
in the Registration Rights Agreement), if such suspension has not been
terminated.

 

From and after the 91st day following such
Registration Default, the interest rate borne by the Securities shall be
increased by 0.50%.  In no event shall
the interest rate borne by the Securities be increased by more than 0.50%.

 

Any amount of additional interest will be payable in
cash semiannually, in arrears, on each Interest Payment Date and will cease to
accrue on the date the Registration Default is cured.

 

Method of Payment.

 

Interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

 

Principal of, and premium, if any, and interest on,
Global Securities will be payable to the Depositary in immediately available
funds.

 

Principal and premium, if any, on Physical Securities
will be payable at the office or agency of the Company maintained for such
purpose, initially the Corporate Trust Office of the Trustee.  Interest on Physical Securities will be
payable by (i) U.S. Dollar check drawn on a bank in The City of New York mailed
to the address of the Person entitled thereto as such address shall appear in
the Register, or (ii) upon application to the Registrar not later than the
relevant Record Date by a Holder of an aggregate principal amount in excess of
$5,000,000, wire transfer in immediately available funds.

 

Paying Agent and Registrar.

 

Initially, J.P. Morgan Trust Company, National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar.  The Company may change the
Paying Agent or Registrar without notice to any Holder.

 

6

 

Indenture.

 

This Security is one of a duly authorized series of
Securities issued under an Indenture, dated as of October 9, 2003 (the
“Indenture”), between the Company and J.P. Morgan Trust Company, National
Association, as trustee (the “Trustee”). 
The Securities issued under the Indenture may be issued in one or more
series and the Securities of each such series shall rank equally and pari passu
with the Securities of each other series. Notwithstanding any provision to the
contrary, any future series of Securities established in or pursuant to a Board
Resolution or a supplemental indenture will be on the same terms as the
Securities issued pursuant to the Indenture in all respects other than the date
of issuance.  All Securities of any one
series need not be issued at the same time and may be issued from time to time,
consistent with the terms of the Indenture, if so provided by or pursuant to
such Board Resolution, such Officers’ Certificate or in any such indenture
supplemental thereto.  The terms of the
Security include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended
(“TIA”).  This Security is subject to
all such terms, and Holders are referred to the Indenture and the TIA for a
statement of all such terms.  To the
extent permitted by applicable law, in the event of any inconsistency between
the terms of this Security and the terms of the Indenture, the terms of the
Indenture shall control.

 

Provisional Redemption.

 

The Securities may be redeemed at the election of the
Company, as a whole or from time to time in part or any date, at any time prior
to June 30, 2006 (a “Provisional Redemption”), at a Redemption Price, payable
in cash, equal to $1,000 per $1,000 principal amount of the Securities, on the
date of redemption (the “Provisional Redemption Date”) if (i) the Closing Price
of the Common Stock has exceeded 150% of the Conversion Price (as may be adjusted
from time to time) then in effect for at least 20 Trading Days in any
consecutive 30 Trading Day period ending on the Trading Day prior to the date
of mailing of the provisional notice of redemption upon not less than 20 nor
more than 60 days notice (the “Notice Date”), and (ii) either (a) a
registration statement covering resales of the Securities and the Common Stock
issuable upon conversion thereof is effective and available for use and is
expected to remain effective for the 30 days following the Provisional
Redemption Date or (b) the Securities and the Common Stock issuable upon
conversion thereof are no longer Transfer Restricted Securities (as defined in
the Registration Rights Agreement).

 

Upon any such Provisional Redemption, the Company
shall make an additional payment (the “Make-Whole Payment”) with respect to the
Securities called for redemption to Holders on the Notice Date in an amount
equal to $90 per $1,000 principal amount of the Securities, less the amount of
any interest actually paid on such Securities prior to the Provisional
Redemption Date.  The Company shall make
the Make-Whole Payment on all Securities called for Provisional Redemption,
including those Securities converted into Common Stock between the Notice Date
and the Provisional Redemption Date.

 

The Company may elect to pay the Make-Whole Payment or
any portion thereof (i) in cash or, (ii) subject to the fulfillment by the
Company of the conditions set forth in Section 10.1 of the Indenture, by
delivering the number of shares of Common Stock equal to (x) the Make-Whole
Payment (or any portion thereof that the Company elects to pay in shares of
Common 

 

7

 

Stock) divided by (y) 97% of the average of the Closing Prices per
share of Common Stock for the five consecutive Trading Days immediately
preceding and including the first Trading Day prior to the Provisional
Redemption Date.

 

Optional Redemption.

 

Except as provided above, this Security is not
redeemable prior to June 30, 2006.  This
Security may be redeemed in whole or in part, upon not less than 20 nor more
than 60 days’ notice, at any time on or after June 30, 2006, at the option of
the Company, at the Redemption Prices (expressed as percentages of the
principal amount) set forth below if redeemed during the 12-month period
beginning June 30 of the years indicated and ending June 29 of the following
years, plus any interest accrued but not paid prior to the Optional Redemption
Date.

 

	
  During the Twelve Months

  Commencing

  	
   

  	
  Redemption
  Prices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2006

  	
   

  	
  101.714

  	
  %

  
	
  June 30, 2007

  	
   

  	
  101.286

  	
  %

  
	
  June 30, 2008

  	
   

  	
  100.857

  	
  %

  
	
  June 30, 2009

  	
   

  	
  100.429

  	
  %

  

 

Securities in original denominations larger than
$1,000 may be redeemed in part.  If any
Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed to be the
portion selected for redemption (provided, however, that the Holder of such
Security so converted and deemed redeemed shall not be entitled to any
additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion of such
Security).  Securities which have been
converted during a selection of Securities to be redeemed may be treated by the
Trustee as Outstanding for the purpose of such selection.

 

On and after the Redemption Date, interest ceases to
accrue on Securities or portions of Securities called for redemption, unless
the Company defaults in the payment of the Redemption Price and accrued and
unpaid interest.

 

Notice of redemption will be given by the Company to
the Holders as provided in the Indenture.

 

Repurchase Right Upon a Change of Control.

 

If a Change of Control occurs, the Holder of
Securities, at the Holder’s option, shall have the right, in accordance with
the provisions of the Indenture, to require the Company to repurchase the
Securities (or any portion of the principal amount hereof that is at least
$1,000 or an integral multiple thereof, provided that the portion of the
principal amount of this Security to be Outstanding after such repurchase is at
least equal to $1,000) at the Repurchase Price in cash, plus any interest
accrued and unpaid to the Repurchase Date.

 

8

 

Subject to the conditions provided in the Indenture,
the Company may, at its option, elect to pay the Repurchase Price in Common
Stock or in securities of the acquiring party in a Change of Control for which
the Common Stock is exchanged in connection with such Change of Control, or a
combination thereof with cash, by delivering the number of shares of Common
Stock or Acquiror Stock equal to (i) the Repurchase Price (less any amounts
paid in cash) divided by (ii) 95% of the average of the Closing Prices per
share of Common Stock or Acquiror Stock, as applicable, for the five
consecutive Trading Days immediately preceding and including the third Trading
Day prior to the Repurchase Date.

 

No fractional shares of Common Stock or Acquiror Stock
will be issued upon repurchase of any Securities.  Instead of any fractional share of Common Stock or Acquiror Stock
which would otherwise be issued upon conversion of such Securities, the Company
shall pay a cash adjustment as provided in the Indenture.

 

A Company Notice will be given by the Company to the
Holders as provided in the Indenture. 
To exercise a repurchase right, a Holder must deliver to the Trustee a
written notice as provided in the Indenture.

 

Conversion Rights.

 

Subject to and upon compliance with the provisions of
the Indenture, the Holder of Securities is entitled, at such Holder’s option,
at any time before the close of business on June 30, 2010, to convert the
Holder’s Securities (or any portion of the principal amount hereof which is
$1,000 or an integral multiple thereof), at the principal amount thereof or of
such portion, into duly authorized, fully paid and nonassessable shares of
Common Stock of the Company at the Conversion Price in effect at the time of
conversion.

 

In the case of a Security (or a portion thereof)
called for redemption, such conversion right in respect of the Security (or
such portion thereof) so called, shall expire at the close of business on the
second Business Day preceding the Redemption Date, unless the Company defaults
in making the payment due upon redemption. 
In the case of a Change of Control for which the Holder exercises its
Repurchase Right with respect to a Security (or a portion thereof), such
conversion right in respect of the Security (or portion thereof) shall expire
at the close of business on the Business Day preceding the Repurchase Date.

 

The Conversion Price shall be initially equal to
$11.35 per share of Common Stock.  The Conversion
Price shall be adjusted under certain circumstances as provided in the
Indenture.

 

To exercise the conversion right, the Holder must
surrender the Security (or portion thereof) duly endorsed or assigned to the
Company or in blank, at the office of the Conversion Agent, accompanied by a
duly signed conversion notice to the Company. 
Any Security surrendered for conversion during the period from the close
of business on any Regular Record Date to the opening of business on the
corresponding Interest Payment Date (other than any Security whose Maturity is
prior to such Interest Payment Date), shall also be accompanied by payment in
New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of the Securities being surrendered for conversion.

 

9

 

No fractional shares of Common Stock will be issued
upon conversion of any Securities. 
Instead of any fractional share of Common Stock which would otherwise be
issued upon conversion of such Securities, the Company shall pay a cash
adjustment as provided in the Indenture.

 

Subordination.

 

The Indebtedness evidenced by this Security is, to the
extent and in the manner provided in the Indenture, subordinated and subject in
right of payment to the prior payment in full of all amounts then due on all
Senior Debt of the Company, and this Security is issued subject to such
provisions of the Indenture with respect thereto.  Each Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on such Holder’s behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and (c) appoints the
Trustee such Holder’s attorney-in-fact for any and all such purposes.

 

Security.

 

The Holder of this Note is entitled to the benefits of
a Pledge Agreement, dated as of October 9, 2003, among the Company, the Trustee
and the Pledged Securities Intermediary named therein, pursuant to which the
Company has placed in the Pledge Account cash or Pledged Securities sufficient
to provide for the payment of the first six scheduled interest payments due on
the Notes and to secure repayment of the principal, premium (if any) and
interest on the Notes in the event that the Notes become due and payable prior
to such time as the first six scheduled interest payments thereon shall have
been paid in full.

 

Denominations; Transfer; Exchange.

 

The Securities are issuable in registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000 in
excess thereof.  A Holder may register
the transfer or exchange of Securities in accordance with the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and
the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.

 

In the event of a redemption in part, the Company will
not be required (a) to register the transfer of, or exchange, Securities for a
period of 15 days immediately preceding the date notice is given identifying
the serial numbers of the Securities called for such redemption, or (b) to register
the transfer of, or exchange, any such Securities, or portion thereof, called
for redemption.

 

In the event of redemption, conversion or repurchase
of the Securities in part only, a new Security or Securities for the
unredeemed, unconverted or unrepurchased portion thereof will be issued in the
name of the Holder hereof.

 

Persons Deemed Owners.

 

The registered Holder of this Security shall be
treated as its owner for all purposes.

 

10

 

Unclaimed Money.

 

The Trustee and the Paying Agent shall pay to the
Company any money held by them for the payment of principal, premium, if any,
or interest that remains unclaimed for two years after the date upon which such
payment shall have become due.  After
payment to the Company, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.

 

Discharge Prior to Redemption or Maturity.

 

Subject to certain conditions contained in the
Indenture, the Company may discharge its obligations under the Securities and
the Indenture if (1) (a) all of the Outstanding Securities shall become due and
payable at their scheduled Maturity within one year or (b) all of the
Outstanding Securities are scheduled for redemption within one year, and (2)
the Company shall have deposited with the Trustee money and/or U.S. Government
Obligations sufficient to pay the principal of, and premium, if any, and
interest on, all of the Outstanding Securities on the date of Maturity or
redemption, as the case may be.

 

Amendment; Supplement; Waiver.

 

The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in aggregate principal amount of the Outstanding
Securities (or such lesser amount as shall have acted at a meeting pursuant to
the provisions of the Indenture).  The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time Outstanding, on
behalf of the Holders of all the Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences.  Any
such consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security or such other Security.

 

No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest (including Liquidated Damages, if any) on this
Security at the times, places and rate, and in the coin or currency, herein
prescribed or to convert this Security (or pay cash in lieu of conversion) as
provided in the Indenture.

 

Defaults and Remedies.

 

The Indenture provides that an Event of Default with
respect to the Securities occurs when any of the following occurs:

 

the Company defaults in the payment of the principal of or premium, if
any, on any of the Securities when it becomes due and payable at Maturity, upon

 

11

 

redemption or
exercise of a Repurchase Right or otherwise, whether or not such payment is
prohibited by the subordination provisions of Article 13 of the Indenture;

 

the Company defaults in the payment of interest on any of the
Securities when it becomes due and payable and such default continues for a
period of 30 days, whether or not such payment is prohibited by the
subordination provisions of Article 13 of the Indenture; provided that a
failure to make any of the first six scheduled interest payments on any of the
Securities within three Business Days of the applicable Interest Payment Date
will constitute an Event of Default with no additional grace or cure period;

 

the Company fails to perform or observe any other term, covenant or
agreement contained in the Securities or the Indenture and such default
continues for a period of 60 days after written notice of such failure is given
as specified in the Indenture;

 

(i) the Company fails to make any payment by the end of the applicable
grace period, if any, after the maturity of any Indebtedness for borrowed money
in an amount in excess of $5,000,000 (provided that such failure shall not
constitute an Event of Default if (1) the Company determines, in good faith,
that a lessor under a lease described in clause (3)(a) of the definition
of Indebtedness set forth in the Indenture breached a covenant under the lease
and the Company has given notice of the breach to the lessor and the Trustee
and (2) as a result of the breach, the Company withholds payment under the
lease) (a “Default Exception”), or (ii) there is an acceleration of any
Indebtedness for borrowed money in an amount in excess of $5,000,000 because of
a default with respect to such Indebtedness (other than a Default Exception)
without such Indebtedness having been discharged or such acceleration having
been cured, waived, rescinded or annulled, in the case of either
clause (i) or (ii) above, for a period of 30 days after written notice is
given to the Company as specified in the Indenture;

 

the Pledge Agreement, as such agreement may be amended, restated or
supplemented or otherwise modified from time to time, shall cease to be in full
force and effect or enforceable in accordance with its terms, other than in
accordance with its terms; and

 

there are certain events of bankruptcy, insolvency or reorganization of
the Company.

 

If an Event of Default shall occur and be continuing,
the principal of all the Securities may be declared due and payable in the
manner and with the effect provided in the Indenture.

 

Authentication.

 

This Security shall not be valid until the Trustee (or
authenticating agent) executes the certificate of authentication on the other
side of this Security.

 

12

 

Abbreviations.

 

Customary abbreviations may be used in the name of a
Holder 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 Gifts
to Minors Act).

 

Additional Rights of Holders of Restricted Securities.

 

In addition to the rights provided to Holders under
the Indenture, Holders of Restricted Securities shall have all the rights set
forth in the Registration Rights Agreement.

 

CUSIP Numbers.

 

Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on this Security and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on this Security or as contained in any
notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.

 

Governing Law.

 

The Indenture and this Security shall be governed by,
and construed in accordance with, the law of the State of New York.

 

Successor Corporation.

 

In the event a successor corporation assumes all the
obligations of the Company under this Security, pursuant to the terms hereof
and of the Indenture, the Company will be released from all such obligations.

 

13

 

ASSIGNMENT FORM

 

To assign this Security, fill in the form below and
have your signature guaranteed: (I) or (we) assign and transfer this Security
to:

 

 

	
   

  	
  (Insert assignee’s soc. sec. or tax I.D. no.)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

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

  	
   

  

 

and irrevocably appoint
                                                                                                                                                          

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

 

 

	
  Dated:

  	
   

  	
   

  	
  Your Name:

  	
   

  	
   

  
	
   

  	
   

  	
  (Print your name exactly as it appears on the

  face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on

  the face of this Security)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee*:

  	
   

  	
   

  
									

 

* Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable to the Trustee).

 

14

 

In connection
with any transfer of this Security occurring prior to the date which is two
years following the original issuance of this Security, the undersigned
represents and warrants that without utilizing any general solicitation or
general advertising that this Security is being transferred in compliance with
an exemption from registration under the Securities Act of 1933, as amended and
documents are being furnished which comply with the conditions of transfer set
forth in this Security and the Indenture.

 

The Trustee or other Registrar
shall not be obligated to register this Security in the name of any Person
other than the Holder hereof unless the conditions to any such transfer of
registration set forth herein and in Sections 2.7, 2.8 and 2.9 of the Indenture
shall have been satisfied.

 

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE: The signature to this assignment must correspond with the
  name as written upon the face of the within-mentioned instrument in every
  particular, without alteration or any change whatsoever.

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature must be guaranteed by a participant in a recognized
  signature guaranty medallion program or other signature guarantor acceptable
  to the Trustee.

  

 

15

 

CONVERSION NOTICE

 

TO:                            NEKTAR THERAPEUTICS

150 Industrial Road

San Carlos, California 94070

 

The undersigned registered owner of this Security
hereby irrevocably exercises the option to convert this Security, or the
portion hereof (which is $1,000 principal amount or an integral multiple
thereof) below designated, into shares of Common Stock in accordance with the
terms of the Indenture referred to in this Security, and directs that the
shares issuable and deliverable upon such conversion, together with any check
in payment for fractional shares and any Securities representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below.  If shares or any portion of this Security
not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.  Any amount required to be paid
to the undersigned on account of interest (including Liquidated Damages, if
any) accompanies this Security.

 

	
  Dated:

  	
   

  	
   

  	
  Your Name:

  	
   

  	
   

  
	
   

  	
   

  	
  (Print your name exactly as it appears on the

  face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on

  the face of this Security)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee*:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Principal amount to be converted (if less than all): $

  
								

 

* Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable to the Trustee).

 

16

 

Fill in for
registration of shares (if to be issued) and Securities (if to be delivered)
other than to and in the name of the registered holder:

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City, State and Zip Code)

  

 

17

 

NOTICE OF EXERCISE OF REPURCHASE RIGHT

 

TO:                            NEKTAR THERAPEUTICS

150 Industrial Road

San Carlos, California 94070

 

The undersigned registered owner of this Security
hereby irrevocably acknowledges receipt of a notice from Nektar Therapeutics
(the “Company”) as to the occurrence of a Change of Control with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Security, or the portion thereof (which is $1,000 principal
amount or an integral multiple thereof) below designated, in accordance with
the terms of the Indenture referred to in this Security, together with interest
(including Liquidated Damages, if any) accrued and unpaid to, but excluding,
such date, to the registered holder hereof, in cash or by delivery of shares of
Common Stock as specified in the Company’s notice.

 

	
  Dated:

  	
   

  	
   

  	
  Your Name:

  	
   

  	
   

  
	
   

  	
   

  	
  (Print your name exactly as it appears on the

  face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on

  the face of this Security)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee*:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Principal amount to be converted (if less than all): $

  
									

 

* Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable to the Trustee).

 

18

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