<SEC-DOCUMENT>0001193125-17-380075.txt : 20180213
<SEC-HEADER>0001193125-17-380075.hdr.sgml : 20180213
<ACCEPTANCE-DATETIME>20171227160255
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-17-380075
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20171227

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NEKTAR THERAPEUTICS
		CENTRAL INDEX KEY:			0000906709
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				943134940
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		455 MISSION BAY BOULEVARD SOUTH
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94158
		BUSINESS PHONE:		4154825300

	MAIL ADDRESS:	
		STREET 1:		455 MISSION BAY BOULEVARD SOUTH
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94158

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INHALE THERAPEUTIC SYSTEMS INC
		DATE OF NAME CHANGE:	19980723

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INHALE THERAPEUTIC SYSTEMS
		DATE OF NAME CHANGE:	19940303
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
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<IMG SRC="g493211g65l78.jpg" ALT="LOGO">
 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">Nektar Therapeutics </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">455 Mission Bay Boulevard South </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">San Francisco, California 94158-2117 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">December&nbsp;27, 2017 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>VIA EDGAR </U></B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Healthcare and Insurance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States Securities and
Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F
Street, N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attention: Ibolya
Ignat, Senior Staff Accountant </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Nektar Therapeutics </B></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the Quarterly Period Ended September&nbsp;30, 2017 </B></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Filed November&nbsp;8, 2017 </B></TD></TR></TABLE>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>File <FONT STYLE="white-space:nowrap">No.&nbsp;000-24006</FONT> </B></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms.&nbsp;Ignat: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We are in receipt of the letter from the staff (the &#147;<B>Staff</B>&#148;) of the Securities and Exchange Commission (the
&#147;<B>Commission</B>&#148;) dated December&nbsp;14, 2017, regarding the Quarterly Report on Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the quarterly period ended September&nbsp;30, 2017 (File
<FONT STYLE="white-space:nowrap">No.&nbsp;000-24006)</FONT> filed by Nektar Therapeutics, a Delaware corporation (the &#147;<B>Company</B>&#148; or &#147;<B>we</B>&#148;), on November&nbsp;8, 2017 (the &#147;<B>Form 10</B><B><FONT
STYLE="white-space:nowrap">-Q</FONT></B>&#148;). Set forth below is the Company&#146;s response to the Staff&#146;s comment set forth in the letter. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We respectfully request, pursuant to 17&nbsp;C.F.R.&nbsp;&#167;200.83, that the Commission accord confidential treatment to the portions of
this letter that are redacted and marked &#147;[***]&#148; in the EDGAR-filed copy of this response letter and not disclose such provisions to any person who is not an employee of the Commission unless otherwise required to do so by law.
Confidential treatment is requested to protect confidential financial or commercial information the publication of which would result in competitive disadvantages. Along with its redacted EDGAR-filed copy, the Company is concurrently delivering an
unredacted hard copy of its response to the Commission. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Staff Comment: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the Quarterly Period Ended September&nbsp;30, 2017 </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Note 6 &#150; License and Collaboration Agreements, page 15 </U></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">1.</TD>
<TD ALIGN="left" VALIGN="top"><I>As it relates to your August&nbsp;23, 2017 license agreement with Eli Lilly to <FONT STYLE="white-space:nowrap">co-develop</FONT> <FONT STYLE="white-space:nowrap">NKTR-358,</FONT> please provide us with your
accounting analysis under ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">605-25-25-5(a)</FONT></FONT></FONT> supporting your determination that the license granted to Eli Lilly has stand-alone
value and therefore represents a separate <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">unit-of-account.</FONT></FONT> Specifically address how you were able to separate the license from your Phase 1 clinical development
obligation.</I> </TD></TR></TABLE>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">1 </P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We respectfully advise the Staff that, in our consideration of whether the license has standalone value, we note that the license grant was
delivered to Eli Lilly (&#147;<B>Lilly</B>&#148;) upon the effective date, August&nbsp;23, 2017, of our license agreement with Lilly (the &#147;<B>License Agreement</B>&#148;). We note that ASC <FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">605-25-25-5(a)</FONT></FONT></FONT> states, &#147;The item or items have value on a standalone basis if they are sold separately by any vendor or the customer could resell the delivered
item(s) on a standalone basis. In the context of a customer&#146;s ability to resell the delivered item(s), this criterion does not require the existence of an observable market for the deliverable(s).&#148; We concluded that the license has
standalone value due to Lilly&#146;s sublicense rights and [***]. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">First, since <FONT STYLE="white-space:nowrap">NKTR-358</FONT> is a
proprietary compound, we concluded that the license grant is not sold separately by any vendor, so it does not meet the first criterion of establishing standalone value in ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap">605-25-25-5(a).</FONT></FONT></FONT> </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Next, we considered Lilly&#146;s ability to resell the license to
establish standalone value under the second criterion. We note that Lilly has the ability to sublicense <FONT STYLE="white-space:nowrap">NKTR-358</FONT> [***]. The License Agreement provides Lilly with a wide field of use for diseases or conditions
whose treatment requires an elevation of a certain type of immune cell (called <FONT STYLE="white-space:nowrap">&#147;T-regulatory</FONT> cells&#148;) to suppress an immune response, and based on our market research,
<FONT STYLE="white-space:nowrap">NKTR-358</FONT> could be effective for [***]. With this wide field of use and ability to sublicense the compound [***], it is possible, but not certain, whether Lilly has the ability to substantially recover the
$150&nbsp;million upfront payment, in order to conclude that the license has standalone value under the second criterion. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We also
respectfully advise the Staff that our consideration of whether the license has standalone value also included [***]. We respectfully advise the Staff that we generally use third parties to perform much of the development services that are described
in the License Agreement for our proprietary programs. Similarly, we use, or plan to use, third parties to perform a predominant majority of the development services to specifically fulfill our obligations under the License Agreement. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We also respectfully advise the Staff that Lilly has extensive experience in developing therapies for autoimmune indications, and the License
Agreement provides Lilly broad, exclusive rights to <FONT STYLE="white-space:nowrap">NKTR-358</FONT> to develop, make and have made, and commercialize the compound. [***]. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Therefore, in our considerations of [***], we note: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="white-space:nowrap">NKTR-358</FONT> is a defined compound, and no further changes to it will result from the Phase 1 clinical development. </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">[***]. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">[***]. </TD></TR></TABLE>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2 </P>

 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>*** Information omitted and provided under separate cover to the Staff pursuant to 17&nbsp;C.F.R.
&#167;200.83 </B></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Under the terms of the License Agreement, if Nektar does not complete its Phase 1 clinical development by a certain date, Lilly has the option to assume responsibility for completing these trials. We believe this
provides further evidence of Lilly&#146;s ability to oversee Phase 1 clinical development. </TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Based on the analysis above, we
concluded that the license grant has standalone value to Lilly at the execution of the License Agreement and therefore represents a single <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">unit-of-account.</FONT></FONT> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">*&nbsp;&nbsp;&nbsp;&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;* </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company hereby acknowledges that: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">the Company is responsible for the adequacy and accuracy of the disclosure in the filings; </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">If you have additional questions, please do not hesitate to contact the undersigned at (415) <FONT STYLE="white-space:nowrap">482-5570</FONT>
or Jillian B. Thomsen, Senior Vice President, Finance and Chief Accounting Officer, at (415) <FONT STYLE="white-space:nowrap">482-5555.</FONT> </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt">


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<TD WIDTH="100%"></TD></TR>


<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Sincerely,</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Gil M. Labrucherie</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Gil M. Labrucherie</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Senior Vice President and Chief Financial Officer</TD></TR>
</TABLE></DIV> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top">Angela Connell, Accounting Branch Chief, Division of Corporation Finance </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Jillian B. Thomsen, Senior Vice President, Finance and Chief Accounting Officer of Nektar Therapeutics </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Mark A. Wilson, Vice President and General Counsel of Nektar Therapeutics </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Sam Zucker, Sidley Austin LLP </TD></TR></TABLE>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">3 </P>

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
