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***Text Omitted and Filed Separately with the Securities and Exchange
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17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
EXHIBIT 10.31
SUPPLY, DEDICATED SUITE AND MANUFACTURING GUARANTEE AGREEMENT
by and between
Nektar Therapeutics
and
Amgen Inc. and Amgen Manufacturing, Limited
dated October 29, 2010

 

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Table of Contents

                  ARTICLE 1 DEFINITIONS     2     1.1    
“Affiliate”
    2     1.2    
“Amgen-Approved Manufacturing Documents”
    2     1.3    
“Amgen Product”
    2     1.4    
“Applicable Laws”
    2     1.5    
“Audit Findings Resolution Plan”
    2     1.6    
“Batch”
    2     1.7    
“Batch Record”
    2     1.8    
“Certificate of Analysis”
    2     1.9    
“Change Notification”
    3     1.10    
“Change of Control”
    3     1.11    
“Confidential Information”
    3     1.12    
“Critical Equipment”
    4     1.13    
“Deliver”
    4     1.14    
“Delivery Date”
    4     1.15    
“Disposition”
    4     1.16    
“Facility”
    4     1.17    
“FDA”
    4     1.18    
“Fixed Fee Component”
    4     1.19    
“Force Majeure Event”
    4     1.20    
“Governmental Entity”
    4     1.21    
“Indenture”
    4     1.22    
“ICH Q7”
    4     1.23    
“License Agreement”
    5     1.24    
“Licensed Product”
    5     1.25    
“Manufacturing”
    5     1.26    
“Manufacturing Documents”
    5     1.27    
“Manufacturing Fees”
    5     1.28    
“Manufacturing Line”
    5     1.29    
“Manufacturing Suite”
    5     1.30    
"[***]”
    5     1.31    
“Party”
    5     1.32    
"[***]”
    5     1.33    
“Patent Right”
    5     1.34    
“Person”
    5     1.35    
“Product”
    6     1.36    
“Proposed Change Costs”
    6     1.37    
“Proposed Improvement”
    6     1.38    
“Quality Agreement”
    6  

 

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                    1.39    
“Raw Material”
    6     1.40    
“Raw Materials Direct Costs”
    6     1.41    
“Raw Materials Minimum Inventory”
    6     1.42    
“Raw Materials Specifications”
    6     1.43    
“Reject”
    6     1.44    
“Release”
    6     1.45    
“[***]”
    7     1.46    
“[***]”
    7     1.47    
“Specifications”
    7     1.48    
“Standard of Care”
    7     1.49    
“Standard Operating Procedures”
    7     1.50    
“Supply Agreement”
    7     1.51    
“Territory”
    7     1.52    
“Third Party”
    7     1.53    
“Trigger Event”
    7     1.54    
“[***]”
    8   ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS     8     2.1    
Representations, Warranties and Covenants of Nektar
    8     2.2    
Representations and Warranties of Amgen
    11   ARTICLE 3 EXCLUSIVE USE MANUFACTURING SUITE AND MANUFACTURING GUARANTEE
    11     3.1    
Exclusive Suite/Guarantee Grants
    11     3.2    
Additional Guarantee Payment and Reduced Guarantee Payment
    12     3.3    
Manufacturing Fees and [***]
    14   ARTICLE 4 MANUFACTURE AND DELIVERY     14     4.1    
Manufacture
    14     4.2    
Supply Obligation
    16     4.3    
Annual Forecasts
    16     4.4    
[***]
    17     4.5    
Orders and Delivery
    17     4.6    
Ongoing Readiness for Manufacturing
    19     4.7    
Demonstration and Reduced Additional Guarantee Payment
    19     4.8    
Continuity of Manufacturing
    20     4.9    
Key Personnel
    21     4.10    
Notice of Trigger Event
    21     4.11    
Performance of Manufacturing and Facility Operations
    21   ARTICLE 5 MANUFACTURING FEES     23     5.1    
Manufacturing Fees
    23     5.2    
[***]
    24     5.3    
Exclusive Compensation
    24  

 

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                  ARTICLE 6 MATERIALS, WORK IN PROGRESS AND PRODUCT     24    
6.1    
Raw Materials
    24     6.2    
Raw Material Procurement
    24     6.3    
Required Inventory
    24     6.4    
Segregation of Amgen Materials
    25   ARTICLE 7 MANUFACTURING LINE     26     7.1    
Grant of Security Interest in the Manufacturing Line
    26     7.2    
Easement and Option to Purchase Manufacturing Line
    26     7.3    
Operation of Manufacturing Line Purchased by Amgen
    26     7.4    
Amgen Inc.’s Election to Operate the Manufacturing Line
    27   ARTICLE 8 QUALITY     28     8.1    
Quality Agreement
    28     8.2    
Rejection
    28   ARTICLE 9 INVOICING AND PAYMENT     29     9.1    
Invoicing
    29     9.2    
Payment
    30   ARTICLE 10 CONFIDENTIALITY     30     10.1    
Confidentiality
    30     10.2    
Authorized Disclosure
    30   ARTICLE 11 TERMINATION AND TERM     31     11.1    
Termination for Convenience
    31     11.2    
Nektar Default
    31     11.3    
Amgen Default
    32     11.4    
Insolvency
    32     11.5    
Term
    32   ARTICLE 12 MISCELLANEOUS PROVISIONS     33     12.1    
Debarred Persons
    33     12.2    
Right to Set-off
    33     12.3    
No Exclusivity or Minimum
    33     12.4    
Precedence
    33     12.5    
Recordkeeping and Audit
    34     12.6    
Assignment
    35     12.7    
Further Actions
    35     12.8    
No Trademark Rights
    36     12.9    
Disclosure of Supply Agreement and Public Announcements
    36     12.10    
Notices
    36     12.11    
Amendment
    37     12.12    
Waiver
    37     12.13    
Counterparts
    37     12.14    
Descriptive Headings
    37  

 

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                    12.15    
Governing Law
    37     12.16    
Severability
    37     12.17    
Entire Agreement of the Parties
    38     12.18    
Dispute Resolution
    38     12.19    
Remedies Cumulative
    39     12.20    
Independent Contractors
    39     12.21    
Force Majeure
    39     12.22    
Specific Performance
    39     12.23    
Equal Opportunity/Affirmative Action
    40     12.24    
Consolidation
    40  

 

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SUPPLY, DEDICATED SUITE AND MANUFACTURING GUARANTEE AGREEMENT
     THIS SUPPLY, DEDICATED SUITE AND MANUFACTURING GUARANTEE AGREEMENT is
entered into as of October 29, 2010 (“Effective Date") by and between on the one
hand Nektar Therapeutics (“Nektar”), a corporation organized under the laws of
Delaware, with its principal place of business located at 201 Industrial Road,
San Carlos, California 94070, and on the other hand Amgen Inc., a corporation
organized under the laws of Delaware, with its principal place of business
located at One Amgen Center Drive, Thousand Oaks, California 91320, and Amgen
Manufacturing, Limited, a corporation organized under the laws of Bermuda, with
its principal place of business located at State Road 31, Kilometer 24.6,
Juncos, Puerto Rico 00777-4060 (collectively Amgen Inc. and Amgen Manufacturing,
Limited, “Amgen”)
WITNESSETH:
     WHEREAS, Nektar and Amgen Inc. are parties to that certain agreement titled
Supply and License Agreement (dated July 25, 1995; Amgen reference 951863) as
amended by Amendment No. 1 (effective as of July 31, 1996), Amendment No. 2
(effective as of December 20, 1999), and Amendment No. 3 (entered into as of
August 28, 2003) (collectively, the “Original Supply and License Agreement”)
and, pursuant to the Original Supply and License Agreement, Nektar and its
affiliates licensed certain technology relating to the manufacture of [***]
polymers to Amgen Inc. and its affiliates so that Amgen Inc. or its affiliates
may manufacture themselves or have manufactured by third parties certain
compounds, and Nektar manufactured for and supplied to Amgen Inc. and its
affiliates certain products;
     WHEREAS, concurrent with entering into this Supply Agreement, Amgen Inc.
and Nektar have amended and restated the Original Supply and License Agreement
(through the License Agreement (defined below)) so as to provide for separate
agreements addressing, among other things, the license grants through the
License Agreement, on the one hand, and the supply obligations through this
Supply Agreement, on the other;
     WHEREAS, concurrent with entering into this Supply Agreement, Amgen has
submitted to Nektar a letter setting forth its approval of certain Manufacturing
Documents (defined below), which Manufacturing Documents constitute
Amgen-Approved Manufacturing Documents (the “First Amgen-Approved Manufacturing
Documents”); and

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     WHEREAS, Amgen desires to obtain, and Nektar is willing to guarantee to
Amgen in return for certain payments, long term, timely supply of certain [***]
polymers that meet Amgen’s quality standards, exclusive use of certain portions
of Nektar’s facility for the manufacture of such polymers for Amgen and its
affiliates and their respective licensees or assigns, and continuity of the
supply of such polymers all as set forth below.
AGREEMENT:
     NOW THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Supply Agreement, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 “Affiliate” shall have the meaning set forth in the Quality Agreement
(defined below).
1.2 “Amgen-Approved Manufacturing Documents” shall mean the then-current version
of each of the Manufacturing Documents that has been approved of in writing by
Amgen.
1.3 “Amgen Product” shall mean human therapeutics, diagnostics or prophylactics
manufactured by or on behalf of Amgen Inc. or one or more of its Affiliates
which utilize Licensed Product in their manufacture.
1.4 “Applicable Laws” shall mean all national, multinational, federal,
provincial, state and local laws, statutes, rules, ordinances, and regulations
that are applicable to each Party’s obligations or performance pursuant to this
Agreement including without limitation the applicable Regulatory Agency (as
defined in the Quality Agreement) guidelines. “Applicable Law", in the singular,
shall refer to one element of the Applicable Laws.
1.5 “Audit Findings Resolution Plan” shall mean the actions to be taken by
Nektar described on Exhibit 6 in response to the Amgen Audit Report of Nektar’s
Huntsville, Alabama facility dated April 30, 2010 and amended May 24, 2010.
1.6 “Batch” shall have the meaning set forth in the Quality Agreement.
1.7 “Batch Record” shall have the meaning set forth in the Quality Agreement.
1.8 “Certificate of Analysis” shall have the meaning set forth in the Quality
Agreement.

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1.9 “Change Notification” shall mean a notice from Amgen to Nektar indicating
(i) one or more modifications that Amgen directs, in its reasonable discretion,
to be made to the Amgen-Approved Manufacturing Documents, Specifications,
analytical testing validation requirements, or list of Critical Raw Materials
(as defined in the Quality Agreement) and (ii) to the extent applicable, the
duration of any suspension of Manufacturing of Product subject to one or more
Orders.
1.10 “Change of Control” shall mean, with respect to a Party, any of the
following transactions: (i) the sale or other transfer to, or acquisition by,
any Person of securities possessing more than fifty percent (50%) of the total
combined voting power of such Party’s outstanding securities; (ii) the sale or
other transfer of all or substantially all of the assets of such Party in one or
more related transactions to any Person who on the Effective Date hereof is not
an majority-owned affiliate of such Party, whether by sale, exchange, merger,
consolidation or reorganization; (iii) a merger or consolidation (or series of
related transactions culminating in a merger or consolidation) (a) in which such
Party is not the surviving entity, except for a transaction (x) the sole purpose
of which is to change its state of domicile or (y) in which the Person(s)
holding such Party’s outstanding securities prior to the consummation of the
transaction possess more than fifty percent (50%) of the total combined voting
power of the voting securities in the surviving entity, or (b) in which such
Party is the surviving entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of its outstanding securities
are transferred to a Person or Persons different from those who held such
securities immediately prior to such event; or (iv) the voluntary or involuntary
dissolution or liquidation of such Party.
1.11 “Confidential Information” shall mean all confidential and proprietary
information including without limitation all information, procedures,
developments, results, data, know-how, protocols, conclusions, technologies, and
inventions, disclosed hereunder by or on behalf of a Party to the other Party
related to the subject matter of this Supply Agreement, whether disclosed in
written (including electronic), visual or oral form; provided however, that
Confidential Information shall not include information that (a) is or becomes
available to the public, through no breach of this Supply Agreement by the Party
receiving such information hereunder (the “Receiving Party"), (b) is obtained on
a non-confidential basis from a Person other than the Party disclosing such
information hereunder (the “Disclosing Party"), provided that, such source is
not known by the Receiving Party to be bound by an obligation (contractual,
legal, fiduciary, or otherwise) of confidentiality to the Disclosing Party with
respect to such information, (c) was in the Receiving Party’s possession prior
to receipt from the Disclosing Party, as evidenced by the Receiving Party’s
written records, or (d) is independently discovered or developed by the
Receiving Party without reference to or the use of Confidential

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17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
Information of the Disclosing Party, as evidenced by the Receiving Party’s
written records.
1.12 “Critical Equipment” shall mean the equipment listed in Exhibit 8 attached
hereto.
1.13 “Deliver” (or Delivery or other variants thereof) shall mean, with respect
to a Batch that is Released (defined below) by Nektar, the shipment of such
Batch to Amgen Manufacturing, Limited or its designee pursuant to
Section 4.5(d), below.
1.14 “Delivery Date” shall mean, for each Batch for which Nektar has completed
Manufacturing and release testing and that is Released by Nektar, the date on
which such Batch is Delivered.
1.15 “Disposition” shall have the meaning set forth in the Quality Agreement.
1.16 “Facility” shall have the meaning set forth in the Quality Agreement.
1.17 “FDA” shall have the meaning set forth in the Quality Agreement.
1.18 “Fixed Fee Component” shall mean the amount of [***] of Product as adjusted
pursuant to Section 5.1.
1.19 “Force Majeure Event” shall mean an event or occurrence that prevents the
performance by a Party of any of its obligations hereunder if such event or
occurrence (i) occurs by reason of any act of God, flood, fire, explosion,
earthquake, strike, lockout, labor dispute, casualty, war, revolution, civil
commotion, acts of public enemies, blockage, or embargo, (ii) occurs without
such Party’s fault, (iii) could not have been prevented by reasonable
precautions or actions taken by such Party, including without limitation the use
of alternate sources, and (iv) is reasonably unforeseeable and beyond the
reasonable control of such Party.
1.20 “Governmental Entity” shall mean any court, tribunal, arbitrator,
authority, agency, commission, department, ministry, official or other
instrumentality of the United States or other country, or any supra-national
organization, or any foreign or domestic, state, county, city or other political
subdivision, including any Regulatory Agency (as defined in the Quality
Agreement).
1.21 “Indenture” shall mean that certain Indenture, dated as of September 28,
2005, by and between Nektar and J.P. Morgan Trust Company, National Association.
1.22 “ICH Q7” shall have the meaning set forth in the Quality Agreement.

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1.23 “License Agreement” shall mean that certain agreement titled Amended and
Restated License Agreement entered into as of October 29, 2010 by and between
Nektar and Amgen Inc., as such agreement may be amended from time to time
pursuant to its terms.
1.24 “Licensed Product” shall have the meaning set forth in the License
Agreement.
1.25 “Manufacturing” (or Manufacture or other variants thereof) shall have the
meaning set forth in the Quality Agreement.
1.26 “Manufacturing Documents” shall mean the Bill of Materials (as defined in
the Quality Agreement), Raw Materials Specifications, Standard Operating
Procedures and Master Batch Record (as defined in the Quality Agreement).
1.27 “Manufacturing Fees” shall mean, for each kilogram of Product that is
subject to an Order (defined in Section 4.5(a)), the dollar amount equal to the
following: [***].
1.28 “Manufacturing Line” shall mean the equipment used by Nektar to Manufacture
the Product at the Facility and, other than consumables, all other equipment,
tooling, and other items comprising or necessary for the operation of such
equipment for Manufacturing, including without limitation the items listed in
Exhibit 2, attached hereto.
1.29 “Manufacturing Suite” shall mean, collectively, the following portions of
the [***] located at 1112 Church Street, Huntsville, Alabama (the location of
such portions are depicted generally in Exhibit 3, attached hereto): (i) the
space identified as [***]; and (ii) the space identified as [***].
1.30 “[***]” shall mean [***].
1.31 “Party” shall mean, on the one hand, Amgen Inc. and Amgen Manufacturing
and, on the other hand, Nektar, as the context requires, and “Parties” shall
mean Amgen and Nektar.
1.32 “[***]” shall mean [***].
1.33 “Patent Right” shall mean patent applications, patents issuing thereon and
any extensions or restorations by existing or future extension or restoration
mechanisms, including Supplementary Protection Certificates or the equivalent
thereof, renewals, continuations, continuations-in-part, divisions,
patents-of-addition, re-examinations, and/or reissues of any patent, in any
country of the Territory.
1.34 “Person” shall have the meaning set forth in the Quality Agreement.

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1.35 “Product” shall have the meaning set forth in the Quality Agreement.
1.36 “Proposed Change Costs” shall mean the costs associated with [***] required
or necessary for Manufacturing pursuant to the Amgen-Approved Manufacturing
Documents in effect prior to the date of the Change Notification.
1.37 “Proposed Improvement” shall mean [***].
1.38 “Quality Agreement” shall mean the agreement attached hereto as Exhibit 1
as may be amended from time to time pursuant to Section 12.11, below.
1.39 “Raw Material” shall have the meaning set forth in the Quality Agreement.
1.40 “Raw Materials Direct Costs” shall mean, with respect to each kilogram of
Product requested in an Order that Nektar Manufactures, Releases and Delivers
hereunder, [***].
1.41 “Raw Materials Minimum Inventory” shall mean the quantity of each of the
Raw Materials listed in Exhibit 7, attached hereto, for each [***] of Product
requested in an Order.
1.42 “Raw Materials Specifications” shall have the meaning set forth in the
Quality Agreement.
1.43 “Reject” (or Rejected or other variants thereof) shall mean that, pursuant
to Section 8.2, Amgen has provided Nektar with a Rejection Notice and,
thereafter, with respect to each such Rejection Notice, any of the following
occur: (i) the basis of the Rejection Notice is failure of the Product to comply
with one or more of the Specifications as determined by Nektar’s or Amgen’s
performance of the applicable test method set forth in the Specifications;
(ii) within the applicable time period set forth in Section 8.2, Nektar does not
notify Amgen of Nektar’s good faith disagreement with the basis for the
Rejection Notice; (iii) pursuant to Section 8.2, Nektar timely notifies Amgen of
Nektar’s good faith disagreement with the basis for the Rejection Notice and the
Parties agree that Amgen was entitled to reject the Product pursuant to
Section 8.2; or (iv) pursuant to Section 8.2, Nektar timely notifies Amgen of
Nektar’s good faith disagreement with the basis for the Rejection Notice and the
Parties refer the matter to a Rejection Evaluator (defined below), and the
Rejection Evaluator determines that Amgen was entitled, pursuant to Section 8.2,
to reject the Product.
1.44 “Release” (or Released or other variants thereof) shall mean, with respect
to a Batch of Product, that such Batch has been Manufactured by Nektar pursuant
to the terms

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
of this Supply Agreement (including without limitation the Quality Agreement)
and the Disposition by Nektar results in a release of such Batch.
1.45 “[***]” shall mean [***].
1.46 “[***]” shall have the meaning set forth in the License Agreement.
1.47 “Specifications” shall have the meaning set forth in the Quality Agreement.
1.48 “Standard of Care” shall have the meaning set forth in the Quality
Agreement.
1.49 “Standard Operating Procedures” shall have the meaning set forth in the
Quality Agreement.
1.50 “Supply Agreement” shall mean this Supply, Dedicated Suite and
Manufacturing Guarantee Agreement, together with its exhibits, as such may be
amended from time to time pursuant to Section 12.11, below.
1.51 “Territory” shall mean worldwide.
1.52 “Third Party” shall have the meaning set forth in the Quality Agreement.
1.53 “Trigger Event” shall mean the occurrence of any one or more of the
following: (i) any Change of Control of Nektar without a signed written
commitment as specified in, and submitted to Amgen pursuant to, Section 12.6
hereof; (ii) Nektar’s becoming the subject of a voluntary or involuntary
bankruptcy proceeding under Title 11 of the United States Bankruptcy Code (the
“Code”) or under any other applicable U.S. Federal, state or foreign law
(collectively with the Code, a “Debtor Relief Law”), having a trustee or
liquidator appointed over its assets (or Nektar’s consenting to such an
appointment), and/or having a receiver appointed to more than an insignificant
portion of its assets (or Nektar’s consenting to such an appointment) and/or
winding up or liquidating, or having wound up or liquidated, its business, or in
each case the occurrence of an event similar to any of the foregoing under
Applicable Law, including any Debtor Relief Law; (iii) upon the occurrence of
Nektar ceasing to own exclusively or otherwise lawfully control (i.e., sole
right to access (other than customary easements), use (including exclusive use
of the Manufacturing Suite and Manufacturing Line), lease and transfer) the
Facility; (iv) in any [***], upon the occurrence of (A) Nektar failing, refusing
or being unable to Manufacture, Release and Deliver on or before the Delivery
Schedule Date or within [***] after the applicable In-Progress Delivery
Schedule Date more than [***] of Product that are subject to one or more Orders
or (B) more than [***] of Product that are subject to one or more Orders are
Rejected (each occurrence under the preceding subpart (iv)(A) or (iv)(B) of this
Section 1.53 a “Supply Default”); (v) Nektar’s failure (a) to pay any

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principal or interest, regardless of amount, due in respect of any indebtedness,
when and as the same shall become due and payable beyond any applicable grace or
cure period, or (b) to observe or perform any other term, covenant, condition or
agreement contained in any agreement or instrument evidencing or governing any
such indebtedness if the effect of any failure referred to in this clause (b) is
to cause, or to permit the holder or holders of such indebtedness or a trustee
or other representative on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, such indebtedness to become due
prior to its stated maturity; provided that it shall not constitute a Trigger
Event unless the aggregate amount of all such indebtedness referred to in
clauses (a) and (b) exceeds [***] at such time); (vi) the occurrence of an Event
of Default under the Indenture (as “Event of Default” is defined in Section 4.1
of the Indenture); (vii) Nektar’s failing, refusing or being unable to submit
one or more of the [***] set forth, and pursuant to the schedule, in Exhibit 6,
and any such failure, refusal or inability is not cured by Nektar within [***]
after receipt of notice from Amgen; (viii) Nektar’s failing, refusing or being
unable to submit to Amgen documents specified in, or otherwise comply with the
requirements set forth in Section 4.8(a) and any such failure, refusal or
inability is not cured by Nektar within [***] after receipt of notice from
Amgen; or (ix) Nektar’s failing, refusing or being unable to submit to Amgen
documents specified in, or otherwise comply with the requirements set forth in,
Section 4.8(b) or Section 4.11, and any such failure, refusal or inability is
not cured by Nektar within [***] after receipt of notice from Amgen.
1.54 “[***]” shall mean [***].
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Representations, Warranties and Covenants of Nektar. Nektar represents,
warrants and covenants to Amgen as follows:
     (a) Corporate Power. Nektar is duly organized and validly existing under
the laws of Delaware and has full corporate power and authority to enter into
this Supply Agreement and to carry out the provisions hereof.
     (b) Due Authorization. Nektar is duly authorized to execute and deliver
this Supply Agreement and to perform its obligations hereunder. The Person
executing this Supply Agreement on Nektar’s behalf has been duly authorized to
do so on behalf of Nektar by all requisite corporate action.
     (c) Binding Agreement. This Supply Agreement is a legal and valid
obligation binding upon Nektar and enforceable in accordance with its terms. The
execution, delivery and performance of this Supply Agreement by Nektar does not
conflict with any

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
agreement, instrument or understanding, oral or written, to which it or one or
more of the Affiliates of Nektar is a party or by which it or one or more of the
Affiliates of Nektar may be bound, nor violate any material law or regulation of
any court, governmental body or administrative or other agency having
jurisdiction over it or one or more of its Affiliates.
(d) Solvency and Performance. Nektar is financially solvent, able to pay its
debts as they mature, and possesses sufficient working capital to complete its
obligations hereunder and is aware of no circumstance that would be reasonably
likely to prevent it from or interfere with it performing under this Supply
Agreement.
(e) Expertise and Equipped. Nektar possesses a high level of expertise in the
business, administration, management, supervision, and Manufacturing required or
necessary to undertake and perform its obligations hereunder and is fully and
properly licensed, permitted, registered, qualified, experienced, equipped
(including without limitation equipped with labor, facilities, machinery,
equipment, and materials), resourced, organized, and financed, and has all
intellectual property rights necessary, to perform its obligations hereunder, as
such obligations may change from time-to-time pursuant to the terms of this
Supply Agreement. Notwithstanding Section 4.1(c) and except with respect to
[***] set forth in the Specification on Appendix G to the Quality Agreement,
with respect to the First Amgen-Approved Manufacturing Documents, on or before
the Effective Date, Nektar has done all that is necessary or required to comply
with the First Amgen-Approved Manufacturing Documents and there are no Proposed
Improvements or Proposed Change Costs associated with such First Amgen-Approved
Manufacturing Documents.
(f) Facility. The Facility, including without limitation the Manufacturing Line
and Manufacturing Suite, and all equipment necessary for the Manufacture,
Release and Delivery of Product, as such Manufacture, Release and Delivery may
change from time-to-time pursuant to the terms of this Supply Agreement, is, and
will remain, in good repair and fully and properly licensed, permitted,
registered, qualified and, to the extent validated (which, as of the Effective
Date, only the analytical methods are validated), validated for the Manufacture
of Product.
(g) Use of Manufacturing Suite. The Manufacturing Suite is not being used for
any purpose other than the Manufacture of Product.
(h) Grant of Rights. Neither Nektar nor any of its Affiliates has granted, nor
will grant during the Term, any right to any Third Party which would conflict
with the rights granted to Amgen hereunder.

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Commission. Confidential Treatment Requested Under
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     (i) Intellectual Property. Other than [***], Nektar has no knowledge of any
intellectual property rights that would conflict with (i) Nektar’s performance
hereunder including performance pursuant to changes made pursuant to Section 4.1
or (ii) Amgen’s exercise of any of the rights granted hereunder.
     (j) [***].
     (k) No Debarment. Nektar is not currently using, and will not during the
Term knowingly use, in any capacity, in connection with the performance of
Manufacturing or any other of its obligations hereunder, the services of any
Person debarred or subject to debarment under 21 U.S.C. § 335(a) or otherwise
disqualified or suspended from performing the Manufacturing or otherwise subject
to any restrictions or sanctions by the FDA or any other Regulatory Agency with
respect to the performance of the Manufacturing (a “Debarred Person”).
     (l) Product Delivery. On the Delivery Date applicable to a Batch, or
portion thereof, of Product Delivered hereunder, such Product will comply with
all terms of this Supply Agreement including without limitation the requirements
of the Quality Agreement, the Specifications, the Certificate of Analysis, and
the Master Batch Record.
     (m) Raw Materials Procurement. Neither Nektar nor any of its Affiliates has
entered into or made, or will enter into or make, any arrangement or agreement
with any Third Party that restricts or prohibits Amgen or one or more of its
Affiliates from obtaining Raw Materials directly or indirectly from Third
Parties.
     (n) Compliance with Supply Agreement. All of the Product Delivered
hereunder shall, upon Delivery, have been Manufactured, Released and shipped in
conformance with all material terms of this Supply Agreement including without
limitation the requirements of the Quality Agreement, the Specifications, the
Certificate of Analysis, the Master Batch Record, ICH Q7 and Applicable Laws and
Nektar will maintain suitable records to verify such compliance.
     (o) Title. Other than as set forth in Section 6.4, title to all Product
sold hereunder shall pass to Amgen free and clear of any security interest,
lien, or other encumbrance.
     (p) Validity. Nektar is not aware of any action, suit or inquiry or
investigation instituted by any Third Party including without limitation any
U.S. federal or state Governmental Entity which questions or threatens the
validity of this Supply Agreement or which could prevent or delay Nektar’s
performance under this Supply Agreement.

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
2.2 Representations and Warranties of Amgen. Amgen Inc. and Amgen Manufacturing,
Limited represent and warrant to Nektar as follows:
     (a) Corporate Power. Amgen Inc. is duly organized and validly existing
under the laws of Delaware, and Amgen Manufacturing, Limited is duly organized
and validly existing under the laws of Bermuda. Each of Amgen Inc. and Amgen
Manufacturing, Limited has full corporate power and authority to enter into this
Supply Agreement and carry out the provisions hereof.
     (b) Due Authorization. Amgen is duly authorized to execute and deliver this
Supply Agreement and to perform its obligations hereunder. The Persons executing
this Supply Agreement on Amgen’s behalf have been duly authorized to do so by
all requisite corporate action.
     (c) Binding Agreement. This Supply Agreement is a legal and valid
obligation binding upon Amgen, and enforceable against Amgen in accordance with
its terms. The execution, delivery and performance of this Supply Agreement by
Amgen does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it may be bound, nor violate any
material law or regulation of any court, governmental body or administrative or
other agency having jurisdiction over it.
     (d) Validity. Amgen is not aware of any action, suit or inquiry or
investigation instituted by any Third Party including without limitation any
U.S. federal or state Governmental Entity which questions or threatens the
validity of this Supply Agreement.
ARTICLE 3
EXCLUSIVE USE MANUFACTURING SUITE AND MANUFACTURING
GUARANTEE
3.1 Exclusive Suite/Guarantee Grants. For the Term of this Supply Agreement,
Nektar (i) grants the Purchase Option, Easement (defined in Section 7.2) and
license set forth in Section 7.2 hereof, (ii) reserves and makes available the
Manufacturing Suite and Manufacturing Line exclusively for the Manufacturing of
Product hereunder for Amgen or its designee, (iii) guarantees its Manufacture,
Release and Delivery of the Previously Ordered Product pursuant to the terms of
the Original Supply and License Agreement, and (iv) guarantees its Manufacture,
Release and Delivery of Product in a quantity in the aggregate of up to [***]
(this [***] does not include, and is in addition to, the Previously Ordered
Product and does not include Product that is Manufactured, Released and
Delivered by Nektar but Rejected) of the Product pursuant to the terms of this
Supply Agreement (collectively, the “Exclusive Suite/Guarantee Grants"). In
consideration for the Exclusive Suite/Guarantee Grants, Amgen shall pay to
Nektar fifty million dollars

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
     (US$50,000,000) (the “Exclusive Suite/Guarantee Payment"), payable by Amgen
to Nektar within thirty (30) days after the Effective Date.
3.2 Additional Guarantee Payment and Reduced Guarantee Payment.
     (a) Additional Guarantee Payment. In addition to any Manufacturing Fees and
[***] (defined in Section 5.2) that accrue and are payable by Amgen hereunder,
if from time-to-time during the Term Amgen submits one or more Orders for
Product in excess of the Previously Ordered Product plus [***] (an “Excess
Order”), except as provided otherwise in this Section 3.2, Amgen shall pay to
Nektar the applicable additional payment set forth in Table 3.2 (each an
“Additional Guarantee Payment”) in consideration for Nektar guaranteeing, and
Nektar does hereby so guarantee, the Manufacture, Release and Delivery of
Product, pursuant to the terms of this Supply Agreement, of up to the upper
limit quantity specified in Table 3.2 associated with such Additional Guarantee
Payment (each an “Upper Limit Quantity”). The quantity ranges in Table 3.2,
below, commence with amounts ordered in addition to the [***] described in
Section 3.1 (e.g., [***] represents the first kilogram ordered in excess of the
[***] described in Section 3.1 and in excess of the Previously Ordered Product,
and so on).
Table 3.2

          Guaranteed Quantity Range     Lower Limit       Additional Guarantee
Quantity   Upper Limit Quantity   Payment
[***]
  [***]   [***]
[***]
  [***]   [***]
[***]
  [***]   [***]
[***]
  [***]   [***]

Each Upper Limit Quantity in Table 3.2 does not include, and is in addition to,
the quantity of the Previously Ordered Product and does not include Product that
is Manufactured, Released and Delivered by Nektar but Rejected. Any [***] paid
by Amgen pursuant to Section 5.2 hereof shall count toward, and reduce
dollar-for-dollar, the amount of any Additional Guarantee Payment that Amgen is
obligated to pay pursuant to this Section 3.2(a) or any Reduced Guarantee
Payment that Amgen is obligated to pay pursuant to Section 3.2(b). To the extent
that Amgen is obligated to pay Nektar one or more Additional Guarantee Payments
pursuant to the terms of this Section 3.2(a), each such Additional Guarantee
Payment shall be payable by Amgen to

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
Nektar within [***] after the date that either (i) Nektar Delivers to Amgen or
its designee the total quantity of Product ordered under the Excess Order that
is Manufactured, Released and Delivered by Nektar pursuant to the terms of this
Supply Agreement and that is not Rejected or (ii) Amgen or its designated Third
Party manufacturer manufactures Product (other than Product that is Previously
Ordered Product) in the Manufacturing Suite and the Disposition of such Product
results in a release of such Product by Amgen or its designated Third Party
manufacturer (“Amgen Manufactured Product”), and the aggregate of the quantity
of such Amgen Manufactured Product and Product (excluding the Previously Ordered
Product) that was Manufactured, Released and Delivered by Nektar and not
Rejected exceeds a Lower Limit Quantity. Notwithstanding the foregoing, under
certain circumstances set forth in Section 3.2(b), the Additional Guarantee
Payments may be subject to a reduction to the Reduced Additional Guarantee
Payment. For the avoidance of doubt, the Reduced Additional Guarantee Payment is
in lieu of, and not in addition to, the Additional Guarantee Payments,
Manufacturing Fees, and [***].
     (b) Reduced Additional Guarantee Payment. If (i) the basis for a Trigger
Event is the occurrence of a Supply Default, (ii) Nektar fails to timely perform
a Trigger Event Readiness Demonstration, or (iii) pursuant to Section 4.7(a),
Nektar timely performs the Trigger Event Readiness Demonstration and Amgen is
not reasonably satisfied that Nektar is able and willing to operate and maintain
the Facility and Manufacturing Line, then, if Amgen pursuant to Section 7.4
elects to itself or through a Third Party manufacture, release and deliver
Product at the Facility, then, in lieu of the Additional Guarantee Payments set
forth in Table 3.2, the Manufacturing Fees and the [***], Amgen shall pay Nektar
[***] of Amgen Manufactured Product (the “Reduced Additional Guarantee
Payment”). Additionally, if after a Trigger Event Nektar is entitled hereunder
to demonstrate and actually does so demonstrate to Amgen pursuant to Section
4.7(a) that Nektar is able and willing to operate and maintain the Facility and
Manufacturing Line as required or necessary to perform and meet its obligations
hereunder and Amgen does not elect to itself or through a Third Party
manufacture, release and deliver Product at the Facility and, thereafter, there
is a Supply Default, then there shall be no additional Trigger Event Readiness
Demonstration and, if Amgen pursuant to Section 7.4 elects to itself or through
a Third Party manufacture, release and deliver Product at the Facility, the
quantity of Product that Amgen or its Third Party manufactures at the Facility
shall be deemed Amgen Manufactured Product and, in lieu of the Additional
Guarantee Payments set forth in Table 3.2, the Manufacturing Fees and the [***],
Amgen shall pay Nektar the Reduced Additional Guarantee Payment. The Reduced
Additional Guarantee Payment is in consideration for Nektar guaranteeing, and
Nektar does hereby so guarantee, up to the applicable Upper Limit Quantity that
it will maintain the Facility (including without limitation the Manufacturing
Suite and, unless Amgen exercises the Purchase Option, the Manufacturing Line),
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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
Amgen and its designees as necessary or required, in order for Amgen itself or
through a Third Party to manufacture, release and deliver Product as if such
Product were Manufactured, Released and Delivered by Nektar hereunder. To the
extent that Amgen is obligated to pay Nektar any Reduced Additional Guarantee
Payment pursuant to the terms of this Section 3.2, the Reduced Additional
Guarantee Payment shall be payable by Amgen to Nektar only after the date that
the quantity of the Amgen Manufactured Product plus the Product Manufactured,
Released and Delivered hereunder by Nektar (excluding the quantity of the
Previously Ordered Product and any Product that is Rejected) exceeds [***].
3.3 Manufacturing Fees and [***]. Except as set forth in Section 3.2 with
respect to any [***] paid by Amgen, the Exclusive Suite/Guarantee Payment and
any applicable Additional Guarantee Payments or Reduced Additional Guarantee
Payment are in addition to any Manufacturing Fees and [***] that may accrue
hereunder.
ARTICLE 4
MANUFACTURE AND DELIVERY
4.1 Manufacture.
     (a)  Nektar shall Manufacture the Product, and prior to shipment to Amgen,
store at the Facility, Release and Deliver the Product, as specified in Orders,
all in compliance with the terms of this Supply Agreement including without
limitation the terms of the Quality Agreement. Nektar shall meet the Standard of
Care in the performance of its obligations under this Supply Agreement. Nektar
shall provide all that is required or necessary to perform its obligations under
this Supply Agreement including without limitation providing all permits,
licenses, authorizations, registrations, labor, supervision, facilities,
machinery, equipment, materials (including without limitation Raw Materials),
supplies, intellectual property rights, maintenance, calibration, validation and
resources. Nektar has submitted to Amgen, and Amgen has approved in writing
concurrently with entering into this Supply Agreement, copies of the
Manufacturing Documents.
     (b)  Subject to the provisions of this Section 4.1, including without
limitation the provisions governing Agreed Improvements and Agreed Change Costs,
Amgen shall have the right, in its reasonable discretion, to make changes to any
of the Amgen-Approved Manufacturing Documents and Specifications. Amgen shall
submit to Nektar a Change Notification with respect to [***] that, on the
Effective Date, is set forth in the Specification on Appendix G to the Quality
Agreement. No later than [***] after Nektar’s receipt of each Change
Notification or such longer period as specified, or agreed to (such agreement
not to be unreasonably withheld or delayed), in writing by Amgen, Nektar shall
revise pursuant to the Change Notification the documents that are the subject

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
to the Change Notification and submit such revised documents to Amgen for review
and approval. Concurrently and in addition, Nektar shall notify Amgen (each a
“Response Notice”) of (i) any Proposed Improvements (including the schedule for
undertaking and completing any Proposed Improvements which schedule may take
into consideration Nektar’s other manufacturing activities at the Facility to
the extent that implementation of the Proposed Improvements would result in
[***] interruption of or interference with such other activities) and Proposed
Change Costs and (ii) any and all intellectual property rights of Third Parties
of which Nektar has knowledge that might be relevant to the Change Notification.
Unless Amgen specifies or agrees in writing to a longer period, within [***]
after Amgen’s receipt of each timely submitted Response Notice (the “Response
Notice Review Period”), in good faith, the Parties shall discuss the Proposed
Improvements and Proposed Change Costs and attempt to reach agreement on the
scope and schedule of the Proposed Improvements and the Proposed Change Costs to
be reimbursed to Nektar by Amgen (the aspects of the Proposed Improvements and
Proposed Change Costs, and any modifications thereto, agreed in writing by the
Parties shall be referred to as, respectively, the “Agreed Improvements” and
“Agreed Change Costs”). With respect to each Response Notice submitted pursuant
to this Section 4.1(b) on which the Parties do not reach agreement as to the
scope of the Proposed Improvements or the Proposed Changes Costs to be
reimbursed to Nektar by Amgen before the end of the Response Notice Review
Period, a Party may escalate the review of such Response Notice and the
associated Change Notification pursuant to the escalation process set forth in
Section 12.18 and, if the Parties do not reach agreement as part of such
escalation, then the Parties shall refer the matter to an independent Third
Party with expertise in manufacturing facility operation and mutually agreed
upon by the Parties, such agreement not to be unreasonably withheld or delayed
(“Manufacturing Change Evaluator”). Within [***] after referral to the
Manufacturing Change Evaluator, Amgen shall submit to the Manufacturing Change
Evaluator the Change Notification and Response Notice, and Amgen shall cause the
Manufacturing Change Evaluator to determine the scope of the Proposed
Improvements and the Proposed Change Costs to be reimbursed to Nektar by Amgen.
Unless Amgen withdraws or modifies the Change Notification that is the subject
of the evaluation of the Manufacturing Change Evaluator, the determination of
the Manufacturing Change Evaluator shall be binding on the Parties. The
determination of the Manufacturing Change Evaluator shall be deemed Confidential
Information hereunder. The fees and expenses of the Manufacturing Change
Evaluator shall be borne by [***]. Amgen may at any time, by notice to Nektar,
withdraw or modify any Change Notification, and if Amgen withdraws a Change
Notification that is subject to review by a Manufacturing Change Evaluator
before such evaluator makes a determination, then Amgen shall pay the fees and
expenses of such Manufacturing Change Evaluator. With respect to changes to the
Manufacturing Documents and the implementation thereof and changes to the
Specifications, Amgen shall only be obligated

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
to reimburse Nektar for the Agreed Change Costs and, to the extent consented to
in writing and in advance by Amgen, such consent not to be unreasonably
withheld, the actual costs incurred by Nektar to secure intellectual property
rights from Third Parties.
     (c)  After approval by Amgen and, as applicable and pursuant to
Section 4.1(b), after establishing the Agreed Improvements and Agreed Change
Costs, Nektar shall do all that is necessary or required to comply with the
Amgen-Approved Manufacturing Documents. Duplicate originals of the most current
Amgen-Approved Manufacturing Documents shall be maintained by each Party and
shall be automatically incorporated into this Supply Agreement by reference. In
Manufacturing the Product, Nektar shall comply in all respects with the most
current Amgen-Approved Manufacturing Documents along with all other terms and
conditions of this Supply Agreement.
     (d)  After Nektar’s receipt of each Change Notification related to the
Specifications and after establishing, as applicable and pursuant to
Section 4.1(b), the Agreed Change Costs and Agreed Improvements, each such
changed Specification shall be automatically incorporated into this Supply
Agreement by reference.
4.2 Supply Obligation. Nektar shall be in default of this Supply Agreement if,
during the Term, (a) Nektar fails, refuses or is unable to Manufacture or
Release Product pursuant to the terms of this Supply Agreement, or (b) Nektar
fails, refuses or is unable to Deliver Product pursuant to the terms of this
Supply Agreement.
4.3 Annual Forecasts. [***], Amgen will submit to Nektar a non-binding, twelve
(12) month forecast of the quantities of Product Amgen may require Nektar to
Manufacture, Release and Deliver during the next calendar year (each an “Annual
Forecast”). Each Annual Forecast is based on Amgen’s good faith estimates at the
time submitted of its requirements for Product Manufactured by Nektar and is
provided for informational purposes only, is nonbinding, and shall not be a
commitment from nor restriction on Amgen with respect to any minimum, maximum,
or specific quantity of Product ordered hereunder. No later than [***] of the
Term, Nektar shall notify Amgen of the estimated Raw Materials Direct Costs for
the quantities of Product that are listed in the Annual Forecast for such
calendar year; provided however if for such calendar year Amgen has not
submitted an Annual Forecast or the submitted Annual Forecast is for [***], then
Nektar shall base its estimated Raw Materials Direct Costs on an aggregate of
[***] of Product to be Delivered during such calendar year. Nektar’s
notification of the estimated Raw Materials Direct Costs shall include (a) if
applicable, the reasons for any increase of greater than [***] in the Raw
Materials Direct Costs stated in such notice as compared to the estimated Raw
Materials Direct Costs stated in the notice for the immediately preceding
calendar year and (b) a written statement signed by an officer of Nektar
certifying that no Trigger Event has occurred since the Effective Date or, in
the

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
alternative in the event that a Trigger Event has occurred, that Nektar has,
pursuant to Section 4.10, notified Amgen of the occurrence of any and all
Trigger Events and no other Trigger Events have occurred since the Effective
Date.
4.4 [***].
4.5 Orders and Delivery.
     (a) Orders. Amgen shall request that Nektar Manufacture Product by
submitting to Nektar a document indicating the quantity of Product to be
Manufactured and the date(s) of Delivery (each an “Order”). All Orders issued
hereunder shall be binding and subject to the terms and conditions of this
Supply Agreement. Amgen shall submit Orders to the following email address (or
at such other email address as may from time to time be furnished in advance by
notice by Nektar to Amgen, but in no event shall there be at any one time more
than one email address): [***]. Nektar shall Deliver the total quantity of
Product requested in an Order within the following time after Amgen submits such
Order pursuant to this Section 4.5(a) (“Delivery Schedule Date”): the sum of (i)
[***] (“Lead Time”) provided however, that if at the time such Order is
submitted, there are days remaining in the Delivery Schedule Date for a
previously placed Order, the Lead Time shall be increased by that number of
remaining days, plus (ii) [***] of Product in excess of [***] of Product. In
addition to the foregoing, Nektar shall Deliver [***] of Product requested in an
Order on or before the expiration of the Lead Time for such Order and, after the
expiration of such Lead Time until the entire quantity of Product requested in
such Order has been Delivered by Nektar, Nektar shall Deliver [***] (each such
date for Delivery, an “In-Progress Delivery Schedule Date”). The following is
provided for purposes of example:
     [***]
     [***]
Notwithstanding the foregoing, the Lead Time shall be reduced to [***] if (a) on
the date that Amgen submits an Order, Nektar has in inventory the Raw Materials
Minimum Inventory or (b) Nektar is obligated pursuant to Section 6.3 to obtain
and maintain the Raw Materials Minimum Inventory as Required Inventory (defined
below). Furthermore, notwithstanding the foregoing, (A) if there is a failure of
a Critical Equipment that causes a delay in Manufacturing of Product subject to
one or more Orders and such failure is not a result of Nektar’s failure to
maintain such Critical Equipment in accordance with standard industry practice
or Nektar’s procedures or practices or such failure is not a result of Nektar’s
abuse or misuse of such Critical Equipment, then the Lead Time for such Orders
may be extended by [***] (which [***] shall include without limitation Nektar
concurrently remediating failures of multiple pieces of Critical Equipment); (B)
if

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
during Manufacturing of Product subject to an Order there is a Significant
Deviation (as defined in the Quality Agreement), pursuant to the Quality
Agreement Nektar submits to Amgen a Pre-Delivery Deviation Notification, and
Amgen approves of such Pre-Delivery Deviation Notification, then the Lead Time
for such Order may be extended by [***]; and (C) to the extent that a Change
Notification is applicable to an Order and the schedule for the Agreed
Improvements related to such Change Notification or, if there is no related
Agreed Improvements, then such Change Notification specifies a suspension in
Manufacturing of Product subject to that Order, then the Lead Time for such
Order may be extended by [***].
     (b) Acknowledgement. [***] after Amgen’s submittal of each Order, Nektar
shall notify Amgen in writing of its receipt of each such Order to the following
address (or at such other address as may from time to time be furnished by
notice by Amgen to Nektar) (each an “Order Acknowledgement”): [***]. No Order
Acknowledgement shall, nor shall it be construed to, alter or modify such Order.
Nektar’s failure or refusal to submit an Order Acknowledgement shall in no way
alter or relieve Nektar from its obligations to Manufacture, Release and Deliver
Product pursuant to such Order.
     (c) Previously Ordered Product. Amgen ordered [***] of Product from Nektar
pursuant to Change Purchase Order 4500008429 (issued by Amgen on October 9,
2009) (the “Previously Ordered Product”) and Nektar has acknowledged such order
and is manufacturing the Previously Ordered Product. Notwithstanding the terms
of this Supply Agreement, Nektar shall manufacture and deliver the Previously
Ordered Product, and Amgen shall accept or reject the Previously Ordered Product
and compensate Nektar for such manufacture and delivery, pursuant to the terms
of the Change Purchase Order 4500008429 and the Original Supply and License
Agreement without reference to, or application of, this Supply Agreement or the
Quality Agreement.
     (d) Release and Delivery. Nektar shall ship to Amgen or its designee [***]
(as defined in Incoterms 2000) each Batch of Product that is ordered by Amgen
and Released by Nektar. Unless notified otherwise by Amgen, Nektar will schedule
the freight to be shipped collect via [***] using International Priority Service
for purposes of Delivering the Product to Amgen or its designee. Nektar shall
ship the Product properly packaged and labeled and in compliance with Applicable
Laws.
     (e) Title and Risk of Loss. Title and risk of loss to the Product shall
remain with Nektar until the Product has been Delivered to Amgen pursuant to
Section 4.5(d), after which title to and risk of loss of the Product shall pass
to Amgen.
     (f) Conflicting Terms. In ordering and Delivering the Product, Amgen and
Nektar may use their standard forms, but nothing in such forms shall be
construed to

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
amend, supplement or modify the terms or conditions of this Supply Agreement
which Supply Agreement shall govern all Orders and Deliveries.
4.6 Ongoing Readiness for Manufacturing. At all times during the Term, Nektar
shall operate and maintain the Facility and Manufacturing Line as required or
necessary to perform and meet its obligations hereunder (including without
limitation its obligation to Manufacture, Release and Deliver Product before the
Delivery Schedule Date and each In-Progress Delivery Schedule Date) and so as to
ensure full compliance with Applicable Laws and this Supply Agreement. Nektar
shall not remove any equipment, tooling or other item in or comprising the
Manufacturing Line without Amgen’s prior written approval, which Amgen may grant
or withhold in its sole discretion. Nektar shall promptly notify Amgen if and
when Nektar becomes aware of circumstances that may affect Nektar’s ability to
perform and meet its obligations hereunder and any such notice shall identify in
sufficient detail the nature and impact of the circumstances and Nektar’s plan
of action to remedy such. In addition to and without limiting the generality of
the foregoing, and subject to Section 4.1 for Proposed Improvements, in the
event that any equipment, tooling or other item comprising the Manufacturing
Line needs to be replaced for maintenance purposes or to otherwise bring the
Manufacturing Line into a condition required or necessary for Manufacturing
pursuant to the then-current Amgen-Approved Manufacturing Documents, the
Specifications or this Supply Agreement, Nektar shall promptly provide Amgen
with prior written notice therefor, and upon Amgen’s prior written approval
(such approval not to be unreasonably withheld, delayed, or conditioned), and
subject to Section 2.1(f) and any similar obligations with respect to the
Manufacturing Line and Facility, Nektar shall replace such equipment, tooling or
other item with the same or similar equipment, tooling or other item that
achieves the same functionality and performance as the replaced item.
4.7 Demonstration and Reduced Additional Guarantee Payment.
     (a) Trigger Event Readiness Demonstration. Unless specified otherwise in
writing by Amgen or unless Amgen has pursuant to Section 7.4 elected to itself
or through a Third Party manufacture Product at the Facility, within [***] after
each Trigger Event, and [***] after Amgen’s written request, Nektar shall
demonstrate [***] that Nektar is able and willing to operate and maintain the
Facility and Manufacturing Line as required or necessary to perform and meet its
obligations hereunder (including without limitation its obligation to
Manufacture, Release and Deliver Product pursuant to the terms of this Supply
Agreement) (each a “Trigger Event Readiness Demonstration”). Each Trigger Event
Readiness Demonstration shall include the following: (i) the Manufacture and
Release by Nektar of [***] of Product (“Demonstration Batches”) and (ii) at
Amgen’s election, (A) the completion of an audit by Amgen or its designee of the
Facility and Manufacturing operations and systems to determine whether Nektar is
in

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
compliance with the requirements of ICH Q7 (Nektar shall cooperate with Amgen or
its designee, and Amgen or its designee shall perform each such audit during the
time allotted in this Section for the Trigger Event Readiness Demonstration) or
(B) Nektar’s written submittal demonstrating compliance with the requirements of
ICH Q7. At Amgen’s sole option, (y) Amgen may submit an Order for some or all of
the Product that Nektar Released as part of a Trigger Event Readiness
Demonstration and such Order and the Delivery of Product pursuant thereto shall
be subject to the terms of this Supply Agreement, including without limitation
Section 8.2 and Section 9.2, or (z) Amgen shall pay Nektar the Manufacturing
Fees for the Demonstration Batches and Nektar shall dispose of the Demonstration
Batches.
     (b) Exclusion of Certain Trigger Event. Notwithstanding anything to the
contrary in this Section 4.7, if a Trigger Event arises out of circumstances
described in subsection (i) of Section 1.53 and, pursuant to Section 7.4, Amgen
elects to itself or through a Third Party manufacture, release and deliver
Product at the Facility, any and all quantities of Amgen Manufactured Product
shall not count toward the lower or upper limit quantities specified in Table
3.2.
     (c) Compensation in Specified Circumstance. If following a Trigger Event,
pursuant to Section 4.7(a), Nektar timely performs the Trigger Event Readiness
Demonstration and Amgen [***] that Nektar is able and willing to operate and
maintain the Facility and Manufacturing Line and thereafter Amgen pursuant to
Section 7.4 elects to itself or through a Third Party manufacture, release and
deliver Product at the Facility, except as provided otherwise in this Supply
Agreement (for example and without limitation, in the event of an additional
Trigger Event and Nektar’s failure to timely perform a Trigger Event Readiness
Demonstration), then [***].
4.8 Continuity of Manufacturing.
     (a) Cooperation Nektar shall fully cooperate with Amgen and use [***] to
supply all assistance reasonably requested by Amgen in carrying out the
intentions of this Supply Agreement including without limitation releasing
Product manufactured by Amgen Inc. or its Third Party after the Operation
Election Date (defined below) and providing Amgen with access to personnel,
documents and records as may be reasonably requested or, pursuant to this Supply
Agreement, required to be provided by Nektar.
     (b) Document Submittal Without limiting the general nature of
Section 4.8(a), no later than [***] during the Term, Nektar shall submit to
Amgen the following: (i) the training program (including without limitation the
outline and content for the program) and training records for personnel who
Manufacture the Product; (ii) the then current material safety data sheet for
each Raw Material; (iii) the then-current job hazard

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
assessments associated with Manufacturing; (iv) documents and records of the
installation qualification and operational qualification of the Manufacturing
Line and other equipment and physical systems necessary or required for the
Manufacturing; (v)documents and records of the performance qualification of the
Manufacturing Line and other equipment and physical systems necessary or
required for the Manufacturing; and (vi) other than the Controlled Documents,
the documents used during, or referred to as part of, Manufacturing by personnel
who Manufacture the Product. Additionally, within [***] after the Effective
Date, Nektar shall submit to Amgen the documents set forth in Subsection
4.8(b)(iii) and Subsection 4.8(b)(v), above.
4.9 Key Personnel. Nektar shall maintain qualified personnel in the job
positions described on Exhibit 5 hereto, the maintenance of qualified personnel
in such positions being instrumental to Nektar’s performance of its obligations
hereunder (personnel filling such job positions shall be referred to as “Key
Personnel”). Nektar shall cause the Key Personnel to oversee the Manufacturing,
Release by Nektar and Delivery of the Product. In the event that Nektar
replaces, transfers, or terminates any Key Personnel or if any Key Personnel
resigns, Nektar will [***]. No voluntary transfer of Key Personnel by Nektar
shall occur at a time or in a manner that would [***] the Manufacturing, Release
by Nektar or Delivery of the Product. [***]
4.10 Notice of Trigger Event. Nektar shall immediately notify Amgen upon the
occurrence of a Trigger Event. Such notice shall include, at a minimum, a
description at a reasonable level of detail of the nature of the Trigger Event.
4.11 Performance of Manufacturing and Facility Operations.
     (a) Test Batches. If between the Effective Date and midnight on
December 31, 2010, Amgen notifies Nektar to Manufacture up to [***] of Product
(“Test Batches”), then within [***] after receipt of such notice (which [***]
period shall exclude any days after the date of such notice on which the
Facility was shut down for a maintenance-related reason provided that Nektar
notified Amgen in advance of receipt of such notice from Amgen of the dates of
such shut down), unless a later date is specified therein, Nektar shall commence
Manufacturing of the Test Batches and notify Amgen of the schedule for
Manufacturing (including in that notice the information set forth in
Section 4.11(b)) (“Test Batches Manufacturing Schedule”) and, thereafter,
Manufacture the Test Batches pursuant to the Test Batches Manufacturing
Schedule. The quantity of Product resulting from the Manufacturing of the Test
Batches shall not be included in, or count toward, the calculation of the lower
limit quantities or upper limit quantities set forth in Section 3.2. At Amgen’s
request, Nektar shall provide to Amgen samples of Product, appropriately
packaged and labeled, resulting from the Manufacturing of the Test Batches.
[***] at Amgen’s sole option, Amgen may submit an

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
Order for some or all of the Product that Nektar Released as part of
Manufacturing the Test Batches and such Order and the Delivery of Product
pursuant thereto shall be subject to the terms of this Supply Agreement
including without limitation Section 3.2,Section 5.1, Section 8.2, and
Section 9.2. At Amgen’s request, Nektar shall, pursuant to the Standard
Operating Procedures, dispose of that portion of the Product resulting from the
Manufacture of the Test Batches that is not subject to an Order.
     (b) Notice of Manufacturing Schedule. With respect to each Order, [***],
Nektar shall notify Amgen of the following: (i) the number of Batches it
anticipates Manufacturing to fulfill the Order; and (ii) for each Batch, the
activities and schedule of activities supporting Manufacturing, Release and
Delivery including without limitation the schedule for receiving, dispensing,
and testing Raw Materials, Batch process sequencing, conducting in-process and
release testing, and packaging and storing of each Batch.
     (c) Amgen Representatives. In addition to the Person in Plant (defined in
the Quality Agreement), Amgen shall have the right during Manufacturing of each
Batch (including without limitation the Test Batches) to have at any time up to
[***] of its representatives (which representatives may be Third Parties)
(collectively or singularly, the “Amgen Representatives”) present at the
Facility to observe the Manufacturing and inspect the Facility Infrastructure.
Nektar shall, and shall cause its representatives who are performing, or who may
perform, any portions of Manufacturing to cooperate with the Amgen
Representatives including without limitation providing explanations of the
activities they are performing and providing timely and full responses to
questions asked, or information requested, by the Amgen Representatives. Nektar
shall provide Amgen with (and allow Amgen to copy and retain) documentation,
data, and records pertaining to the Manufacturing. Nektar shall provide the
Amgen Representatives with sufficient and reasonable office space, use of
network connections, telephones, copiers, and other office equipment. The Amgen
Representatives shall comply with reasonable security and safety procedures
provided to Amgen by Nektar in writing no less than [***] in advance of the
Amgen Representatives arriving at the Facility. At the request of Nektar, prior
to being allowed access to the Nektar Facility, Amgen shall cause each Amgen
Representative who is not an employee of Amgen to execute a confidentiality
agreement reasonably acceptable to Nektar obligating such Amgen Representative
to maintain the confidentiality of Nektar confidential information that may be
disclosed to such Amgen Representative.
     (d) Facility Infrastructure. Upon Amgen’s request, Nektar shall, at
reasonable times, meet and discuss with Amgen the electrical power, water,
cooling, heating, ventilation, specialty gases and all other common utilities
and infrastructure at or supporting the Facility that could reasonably impact
the quality of the Product

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
Manufactured at the Facility, the environment, or the health or safety of
personnel who Manufacture the Product (collectively, “Facility Infrastructure”)
and, during each such meeting (or if it is unreasonable to do so during the
meeting, no later than [***] following the meeting), provide additional
information (including without limitation capacities, drawings, designs,
controls, and specifications) and, to Amgen’s reasonable satisfaction, respond
to Amgen’s questions regarding the Facility Infrastructure.
ARTICLE 5
MANUFACTURING FEES
5.1 Manufacturing Fees.
. In addition to payments made pursuant to Section 3.1 and Section 3.2 hereof,
in consideration for the quantity of Product that Nektar Manufactures, Releases
and Delivers pursuant to the terms of this Supply Agreement and the applicable
Order and that is not Rejected, Amgen shall pay to Nektar the Manufacturing Fees
applicable to such quantity of Product. Notwithstanding anything to the contrary
contained in this Supply Agreement, in no event shall Nektar be entitled to
receive any Manufacturing Fees for charges, costs or expenses to the extent
arising out of or resulting from (i) any costs or expenses incurred by Nektar or
its Affiliates or payable by Amgen to remedy any error, omission or mistake of
Nektar, its Affiliates or their respective subcontractors or personnel or breach
of this Supply Agreement or any Order by Nektar, its Affiliates or their
respective subcontractors or personnel, or (ii) any incremental or additional
costs or expenses incurred by Nektar or its Affiliates or payable by Amgen to
remedy any error, omission or mistake of Nektar, its Affiliates or their
respective subcontractors or personnel or breach of this Supply Agreement or any
Order by Nektar, its Affiliates or their respective subcontractors or personnel.
     (a) Fixed Fee Component Adjustment. The Fixed Fee Component of the
Manufacturing Fees shall be [***]
          1. [***]
          2. [***]
          3. [***]
          4. [***]
          5. [***]

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
5.2 [***]. If during the period from [***] through [***] Amgen submits Orders
for Product that specify that Product [***] is to be Delivered during [***],
then, during [***], Nektar shall [***] that is Manufactured, Released and
Delivered by Nektar and not Rejected (“[***]”). For the avoidance of doubt, the
Previously Ordered Product shall not count toward the [***].
5.3 Exclusive Compensation. Other than as set forth in, and pursuant to the
conditions of, Section 3.1, Section 3.2, Section 4.1, Section 5.1, and Section
5.2, Nektar shall not be entitled to any other compensation for performance
hereunder including without limitation compensation for any Batch of Product
that is Manufactured but not Released or Delivered by Nektar and any costs or
expenses incurred by Nektar arising out of any obligations of Nektar set forth
in the Quality Agreement.
ARTICLE 6
MATERIALS, WORK IN PROGRESS AND PRODUCT
6.1 Raw Materials. In addition to the requirements set forth in Section 6 of the
Quality Agreement, Nektar shall permit, and shall use commercially reasonable
efforts to cause its suppliers of Raw Materials to permit, Amgen to conduct
audits of the facilities and quality systems of the suppliers of Raw Materials.
Nektar shall promptly notify Amgen in the event that Nektar defaults, or is
alleged to have defaulted, under an agreement with one or more of its suppliers
of Raw Materials or a supplier of other goods or services required for the
Manufacture of the Product (including without limitation suppliers of utilities
to the Facility), and, without limiting any other rights or remedies available
to Amgen, Amgen shall have the right, but not the obligation, to cure such
default.
6.2 Raw Material Procurement. In the event Amgen elects to manufacture or have
manufactured by a Third Party any portion of its needs or requirement for
Product or Licensed Product, Amgen shall not be restricted from procuring Raw
Materials from Third Parties, and Nektar agrees, upon request by Amgen, to
supply Amgen with all requested Raw Materials required for manufacture of the
Product or Licensed Product at [***] to the extent that such Raw Materials are
available from Nektar’s suppliers to fulfill any such requests by Amgen. Nektar
will [***] to obtain or maintain the ability to resell Raw Materials to Amgen
pursuant to this Section 6.2.
6.3 Required Inventory. From time-to-time during the Term, Amgen may notify
(each a “Required Inventory Notice”) Nektar to, and if so notified and within
[***] after notification Nektar shall, obtain and maintain at the Facility
certain quantities and types of Raw Materials (“Required Inventory”). Within
[***] after receipt of each Required Inventory Notice, Nektar shall submit to
Amgen Nektar’s good faith estimate of the cost of obtaining and maintaining at
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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
the Required Inventory Notice (“Estimated Costs of Maintaining Required
Inventory”). Within [***] after Amgen’s receipt of the Estimated Costs of
Maintaining Required Inventory, Amgen and Nektar shall negotiate in good faith
the amount to be paid by Amgen to Nektar in return for Nektar maintaining the
Required Inventory, and Amgen shall only be obligated to pay Nektar in return
for maintaining the Required Inventory amounts agreed to by Amgen in writing,
and, if the Parties are unable to reach agreement within such [***], then the
Parties shall refer the matter to an independent Third Party with expertise in
sourcing and storing raw materials and mutually agreed upon by the Parties, such
agreement not to be unreasonably withheld or delayed (“Raw Materials
Evaluator”). Within [***] after referral to the Raw Materials Evaluator, Nektar
shall submit to the Raw Materials Evaluator the basis for the Estimated Costs of
Maintaining Required Inventory and Amgen shall submit the basis for its
objection to the Estimated Costs of Maintaining Required Inventory, and the Raw
Materials Evaluator shall then determine an estimated cost of obtaining and
maintaining at the Facility the Required Inventory and such determination shall
be binding on the Parties. The determination of the Raw Materials Evaluator
shall be deemed Confidential Information hereunder. The fees and expenses of the
Raw Materials Evaluator shall be borne by [***]. Nektar shall store and maintain
(including without limitation rotation of inventory) the Required Inventory so
that it is appropriately available for use in the Manufacturing of Product.
Nektar shall have the right to use in Manufacturing the Required Inventory
provided that Nektar restock such Raw Materials so as to always maintain the
Required Inventory in the quantities specified in each Required Inventory
Notice. Upon and pursuant to Amgen’s written request, at Amgen’s cost including
the Raw Materials Direct Costs, Nektar shall ship to Amgen or its designee Raw
Materials maintained in the Required Inventory and, within [***] thereafter,
Nektar shall replenish the Required Inventory. Upon request of Amgen at any
time, Nektar will promptly notify Amgen of the quantity of each Raw Material
held by Nektar for Amgen at the Facility.
6.4 Segregation of Amgen Materials. Nektar shall keep located at the Facility,
identified for Amgen, and segregated from other raw materials, works in
progress, or finished products the Raw Materials, work in progress in the
Manufacturing and, prior to Delivery to Amgen, Product (collectively, “Amgen
Materials”). Nektar hereby grants to Amgen an immediate, present, irrevocable
and paid up right and easement to enter the Facility and take possession and
control of the Amgen Materials. [***]. In the event, and to the extent, that
Amgen takes possession and control of these segregated Raw Materials, works in
progress, or Product, Amgen shall [***], for such segregated Raw Materials and
for the Raw Materials used in the Manufacturing of the works in progress.

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
ARTICLE 7
MANUFACTURING LINE
7.1 Grant of Security Interest in the Manufacturing Line. Nektar hereby grants
to Amgen Inc., its successors and assigns a valid first lien on and security
interest in the Manufacturing Line. Nektar agrees to execute such further
instruments and documents of security in form and substance reasonably
satisfactory to Amgen Inc. as to the security interest herein granted by Nektar
in favor of Amgen Inc. including without limitation a financing statement under
the Uniform Commercial Code covering the Manufacturing Line.
7.2 Easement and Option to Purchase Manufacturing Line. In consideration of the
Exclusive Suite/Guarantee Payment set forth in Section 3.1, above, Nektar hereby
grants to Amgen Inc. the following: (i) an immediate, present, irrevocable and
fully paid up option which Amgen Inc. may exercise in its sole discretion to
purchase the Manufacturing Line (“Purchase Option”), and (ii) an easement in the
form attached hereto as Exhibit 4 (the “Easement”), which Easement provides
Amgen Inc., among other things, with an immediate right to enter and access the
portion of the Facility where the Manufacturing Suite is located, and an
immediate, present, irrevocable and fully paid up right and license to use and
operate at will the Manufacturing Line and Manufacturing Suite, regardless of
whether Amgen Inc. exercises the Purchase Option. Amgen Inc.’s right to use the
Manufacturing Suite and operate the Manufacturing Line include without
limitation use of power, water, cooling, heating, ventilation,
telecommunications and all other common utilities and services and access to all
other areas of, and equipment at, the Facility that are reasonably necessary or
required for the purpose of manufacturing, releasing and delivering the Product.
[***] In the event that Amgen Inc. exercises the Purchase Option, [***] within
[***] after such exercise, [***].
7.3 Operation of Manufacturing Line Purchased by Amgen. In the event that Amgen
Inc. exercises the Purchase Option, Amgen Inc. may elect, in its sole
discretion, to (i) operate the Manufacturing Line itself; (ii) sublicense,
pursuant to the License Agreement, to any Third Party the right to Manufacture
Product or Licensed Products and permit such Third Party to operate the
Manufacturing Line without any restriction whatsoever, whether set forth in this
Supply Agreement or otherwise, including without limitation in Section 3.1 or
Section 5.3(c) of the License Agreement; or (iii) permit Nektar to continue to
operate the Manufacturing Line under the terms and conditions of this Supply
Agreement (and, in the case of this subsection (iii), Nektar will be entitled to
receive compensation pursuant to Section 3.1, the Additional Guarantee Payments
pursuant to Section 3.2 without application of the Reduced Additional Guarantee
Payment, Agreed Change Costs pursuant to Section 4.1, Manufacturing Fees
pursuant to Section 5.1, and the [***] pursuant to Section 5.2).

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
7.4 Amgen Inc.’s Election to Operate the Manufacturing Line. Amgen Inc. shall
notify Nektar of its election to itself, or through a Third Party, manufacture,
release, and deliver Product at the Facility pursuant to the rights set forth in
this Agreement (the date of such notice, the “Operation Election Date”).
Following the Operation Election Date, Amgen Inc. (or its designated Third
Party) will use the Manufacturing Suite and Manufacturing Line solely for and in
support of the manufacture, release and delivery of the Product and Amgen shall
be entitled, but not obligated, to terminate the Product supply portion of this
Supply Agreement without liability, fee, expense, cost reimbursement, penalty or
other amounts of any type or kind to Amgen; provided however, that Amgen Inc.
will still be responsible for payment of the following: (i) the Option Price if
Amgen exercises the Purchase Option; (ii) as applicable, costs as set forth in
Section 6.4; (iii) any accrued payments that are due and payable to Nektar
hereunder as of the Operation Election Date (including, as applicable, payments
provided for in Section 3.2, Section 3.3, Section 4.1, Section 5.1 and
Section 5.2); and (iv) as applicable, Additional Guarantee Payment(s) or Reduced
Guarantee Payment(s) pursuant to Section 3.2.
     (a)  [***] after the Operation Election Date, without limiting the Purchase
Option, Easement, and license set forth in Section 7.2 and operation and access
rights set forth in Section 7.3, Nektar shall notify Amgen of the areas within
the Facility for use by Amgen Inc. (or its designated Third Party) for the
following: (i) the shipping and receiving dock area of the Facility;
(ii) storage of consumables, critical spares, quarantined and released Raw
Materials and packaging for use in the manufacture of Product; (iii) storage of
work in progress and quarantined and released Product; (iv) areas for testing,
dispensing, packaging and storing retained or other samples; (v) storage of
solid and liquid waste, including hazardous waste, generated by Amgen Inc. (or
its designated Third Party) through the manufacture of Product; (vi) break
rooms, lavatories, and parking areas for use by Amgen Inc. (or its designated
Third Party) employees while at the Facility; and (vii) directions for accessing
the Manufacturing Suite from the exterior of the Facility.
     (b)  After the Operation Election Date, (i) Amgen Inc. will, and will cause
its employees and staff of its designated Third Party manufacturer when present
at the Facility to, comply with written instructions of Nektar of which
(A) Amgen Inc. has been notified in advance and (B) are reasonably necessary for
Nektar to operate the Facility in a reasonably orderly manner and in compliance
with Applicable Laws; and (ii) Amgen Inc. shall, and as applicable it shall
cause its Third Party manufacturer to, comply with all national, state and local
laws, statutes, rules, ordinances, and regulations applicable to Amgen Inc.’s
(or its Third Party manufacturer’s) performance of manufacturing, release and
delivery of the Product at the Facility.

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
ARTICLE 8
QUALITY
8.1 Quality Agreement. The Quality Agreement attached hereto as Exhibit 1 shall
apply hereto and is incorporated herein by reference. On or before August 23,
2010, Nektar submitted a draft Nektar Policy for Quality Risk Management to
Amgen and, thereafter, Amgen provided input and accepted as adequate the Nektar
Policy for Quality Risk Management. Nektar shall implement the Nektar Global
Policy — Quality Assurance, Quality Risk Management, 980 14522 Rev.00, effective
October 5, 2010 within [***] after the Effective Date, but in no event later
than [***]. Nektar shall, [***], do all that is necessary or required to perform
the activities and meet the deliverables set forth in the Audit Resolutions
Finding Plan. Nektar shall do all that is necessary or required to implement
request for change number RFC-2010 (approved by Amgen on October 14, 2010) on or
before November 15, 2010. [***] Nektar shall, [***], do all that is necessary or
required to perform the activities, cooperate and communicate with Amgen, and
provide to Amgen the deliverables, set forth in Exhibit 6 pursuant to the
schedule set forth therein.
8.2 Rejection. Amgen shall have [***] following the Delivery Date of each Batch
(or portion thereof) of Product to reject such Product based on the following:
[***]. Any such rejection will be given by written notice to Nektar specifying
the manner in which all or part of such Batch of Product fails to meet the
foregoing requirements or warranty(ies) (“Rejection Notice”). Within [***] after
receipt of a Rejection Notice, if the basis for the Rejection Notice is anything
other than analytical results obtained from methods set forth in the
Specifications and if Nektar in good faith disagrees with the basis for the
Rejection Notice, Nektar shall notify Amgen of the basis for its position and
the Parties shall, within [***] of Amgen’s receipt of such notice from Nektar,
attempt to reach agreement on whether pursuant to this Section 8.2 Amgen was
entitled to reject the Product. If the Parties are unable to reach agreement
within such [***], then the Parties shall refer the matter to an independent
Third Party with expertise in manufacturing pursuant to ICH Q7 and mutually
agreed upon by the Parties, such agreement not to be unreasonably withheld or
delayed (“Rejection Evaluator”). Within [***] after referral to the Rejection
Evaluator, Nektar shall submit to the Rejection Evaluator the applicable
Amgen-Approved Manufacturing Documents and the applicable Certificate(s) of
Analysis and Batch Record and Amgen shall submit to the Rejection Evaluator the
applicable Rejection Notice and Section 2.1(l), Section 2.1(n), and
Section 2.1(o) of this Supply Agreement (the “Evaluation Documents”). Amgen
shall cause the Rejection Evaluator to determine, based on the Evaluation
Documents and the Rejection Evaluator’s expertise in manufacturing pursuant to
ICH Q7, whether pursuant to this Section 8.2 Amgen was entitled to reject the
Product and such determination shall be binding on the Parties. The
determination of the Rejection Evaluator shall be deemed Confidential
Information hereunder. The fees and expenses of the Rejection Evaluator

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
shall be borne by the Party against whom the Rejection Evaluator’s determination
is made. For each Batch (or portion thereof) of the Product that is Rejected,
Amgen shall, at Nektar’s direction (not to be unreasonably withheld or delayed)
and expense, either destroy or return to Nektar such Product. Notwithstanding
that certain rights and remedies are set forth in this Supply Agreement with
respect to a Supply Default, at Amgen’s written request, Nektar shall
Manufacture, Release and Deliver, at Nektar’s own cost and expense provided that
Amgen has paid for the non-conforming Batch of Product, a Batch of Product (each
a “Replacement Batch”) for each Batch of Product that was the subject of such
Rejection Notice, and each Replacement Batch shall be subject to the rejection
process set forth in this Section 8.2. The Delivery Schedule Date and
In-Progress Delivery Schedule Date for each Replacement Batch shall be
determined pursuant to Section 4.5(a). For the avoidance of doubt, if a
Replacement Batch is Rejected, then in addition to other remedies, at Amgen’s
sole option and direction, Nektar shall either (a) Manufacture a new Batch of
Product at Nektar’s own cost and expense provided that Amgen has paid for the
non-conforming Batch of Product or (b) refund to Amgen all sums paid by Amgen to
Nektar in connection with the non-conforming Batch of Product. [***]
ARTICLE 9
INVOICING AND PAYMENT
9.1 Invoicing. Nektar shall, no later than [***] after the Delivery Date for
each Batch of Product that is Manufactured, Released and Delivered by Nektar and
not Rejected, submit to Amgen a written invoice for the Manufacturing Fees and,
if applicable, [***] associated with such Product. Nektar shall submit such
invoice for payment to the following address:
     [***]
Amgen may change, by written notice to Nektar, the address or method for
submitting invoices hereunder. Each invoice shall identify each Batch of Product
that is the subject of the invoice, the total Manufacturing Fees, [***], if any,
and the following:

  (i)   The Amgen contract number for this Supply Agreement;     (ii)   Order
number;     (iii)   Description of those portions of the Order completed; and  
  (iv)   If applicable, a detailed, line-itemed list of all of the costs
included in the Raw Materials Direct Costs.

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

In the event that Amgen reasonably requests additional information for any
amounts stated in an invoice, Nektar shall submit to Amgen the additional
information requested within [***] after receipt of each such request. Within
[***] after receipt of an invoice, Amgen shall notify Nektar of any amounts
disputed by Amgen that are stated in an invoice and the basis for such dispute,
such invoice shall be deemed withdrawn by Nektar, and, upon receipt of such
notification, Nektar shall submit a revised invoice stating only undisputed
amounts (each, a “Correct Invoice”). Upon resolution of disputed amounts, Nektar
shall submit an invoice pursuant to this Article 9 for that portion of the
disputed amounts, if any, that the Parties mutually agree are due and no longer
in dispute.
9.2 Payment. In the case of an invoice that is undisputed by Amgen, Amgen will
pay Nektar the amount of the invoice within [***] after receipt of such invoice.
In the case of an invoice that was disputed by Amgen, following receipt of a
Correct Invoice, Amgen will pay Nektar the amounts stated in such Correct
Invoice within [***] after receipt of such. Any amounts stated in an undisputed
invoice or a Correct Invoice that remain unpaid after such sixty (60) days shall
accrue interest until paid at [***]. Payment by Amgen does not constitute
acceptance of Nektar’s performance hereunder or an admission of liability.
ARTICLE 10
CONFIDENTIALITY
10.1 Confidentiality. Except to the extent expressly authorized by this Supply
Agreement or otherwise agreed in writing by the Parties, the Parties agree that,
for the term of this Supply Agreement and for [***] thereafter, the Receiving
Party shall keep confidential and shall not publish or otherwise disclose and
shall not use for any purpose other than as provided for in this Supply
Agreement any Confidential Information of the Disclosing Party.
10.2 Authorized Disclosure.
     (a)  Notwithstanding anything to the contrary contained in this Supply
Agreement, a Receiving Party may disclose Confidential Information of the
Disclosing Party to the extent required, as advised by counsel, (i) in response
to a valid order of a court or other governmental body or as required by or to
comply with Applicable Laws, (ii) with respect to Amgen or its Affiliates,
filing or prosecuting Patent Rights for Amgen Products, or (iii) prosecuting or
defending litigation against Third Parties; provided however, that the Receiving
Party shall advise the Disclosing Party in advance of such disclosure to the
extent practicable and permissible by such order or Applicable Laws, shall
reasonably cooperate with the Disclosing Party, if requested, in seeking an

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
appropriate protective order or other remedy, and shall otherwise continue to
perform its obligations of confidentiality set forth in this Supply Agreement.
     (b)  Notwithstanding anything to the contrary contained in this Supply
Agreement, Amgen or its Affiliates may disclose Confidential Information of
Nektar to the extent such disclosure is reasonably necessary, as advised by
counsel, under the following circumstances:

  (i)   regulatory filings for the Product, Licensed Product, or Amgen Products;
or     (ii)   conducting pre-clinical or clinical trials of Amgen Products.

In the event Amgen or one of its Affiliates intends to disclose Confidential
Information of Nektar pursuant to this Section 10.2(b), Amgen will, except where
impracticable, give reasonable advance notice to Nektar of such disclosure and
use reasonable efforts to secure confidential treatment of such Confidential
Information.
     (c)  Notwithstanding anything to the contrary contained in this Supply
Agreement, Amgen or its Affiliates may disclose Confidential Information of
Nektar to the extent such disclosure is reasonably necessary to [***]. Amgen
shall, except where impracticable, give reasonable advance notice of such
disclosures to Nektar and shall use reasonable efforts to secure confidential
treatment of such Confidential Information.
     (d)  Notwithstanding anything to the contrary contained in this Supply
Agreement, Confidential Information of Nektar received by Amgen hereunder may be
disclosed by Amgen to [***].
ARTICLE 11
TERMINATION AND TERM
     11.1 Termination for Convenience. Amgen, upon notice to Nektar, may
terminate for convenience, without cause, this Supply Agreement in its entirety.
Such termination shall not relieve Amgen of its obligations hereunder to pay
Nektar the Exclusive Suite/Guarantee Payment, undisputed amounts on account of
Manufacturing Fees and, if applicable, [***], Additional Guarantee Payments, and
Reduced Additional Guarantee Payments that are due and owing on the date of such
termination. After receipt by Nektar of Amgen’s notice of termination pursuant
to this Section 11.1, other than fulfilling Orders at that time pending, Nektar
shall have no obligation to supply Product to Amgen under this Supply Agreement
and shall be released from supply guarantees set forth in this Supply Agreement.
     11.2 Nektar Default. In the event Nektar shall default in the performance
of any material obligation hereunder, Amgen shall give Nektar notice of the
default (“Notice of

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
Default") specifying the nature of the default and requesting that Nektar cure
such default within [***]; provided however, except as expressly set forth in
the definition of Trigger Event, there shall be no cure period for any such
default in performance that constitutes a Trigger Event. If Nektar shall dispute
the existence, extent or nature of the default set forth in the Notice of
Default, the Parties shall use good faith efforts to resolve the dispute. Nektar
defaults shall include without limitation Nektar’s failure, refusal or inability
to (i) supply Product in quantities requested hereunder or (ii) Manufacture,
Release, or Deliver Product in accordance with the terms of this Supply
Agreement including without limitation the Orders, the Quality Agreement, ICH
Q7, or the Specifications.
     11.3 Amgen Default. In the event Amgen shall default in the performance of
any material obligation hereunder, Nektar shall give Amgen a Notice of Default
specifying the nature of the default and requesting that Amgen cure such default
within [***]. If Amgen shall dispute the existence, extent or nature of the
default set forth in the Notice of Default, the Parties shall use good faith
efforts to resolve the dispute. In the event Amgen shall fail to cure such
default within [***] of receipt of the Notice of Default, Nektar shall be
entitled to pursue legal remedy for such default; provided however, that Nektar
shall not have the right to terminate this Supply Agreement based on a default
by Amgen.
     11.4 Insolvency. Either Amgen or Nektar may, in addition to any other
remedies available to it by law or in equity, terminate this Supply Agreement,
in whole or in part, by written notice to the other Party (the “Insolvent
Party”) in the event the Insolvent Party shall have become insolvent or
bankrupt, or shall have made an assignment for the benefit of its creditors, or
there shall have been appointed a trustee or receiver of the Insolvent Party or
for all or a substantial part of its property, or any case or proceeding shall
have been commenced or other action taken by or against the Insolvent Party in
bankruptcy or seeking reorganization, liquidation, dissolution, winding-up
arrangement, composition or readjustment of its debts or any other relief under
any bankruptcy, insolvency, reorganization or other similar act or law of any
jurisdiction now or hereafter in effect, or there shall have been issued a
warrant of attachment, execution, distraint or similar process against any
substantial part of the property of the Insolvent Party, and any such event
shall have continued for [***] undismissed, unbonded and undischarged.
     11.5 Term. Unless earlier terminated pursuant to its terms, this Supply
Agreement shall terminate on the tenth anniversary of the Effective Date (the
“Term”); provided, however, that this Supply Agreement shall remain in effect
with respect to any then-pending Order(s) issued under this Supply Agreement
until completion of performance thereunder unless terminated by Amgen for cause
as provided in Section 11.2 or Section 11.4 and instructed by Amgen that such
then-pending Order(s) are also

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
terminated. Expiration of the Term shall not limit any warranty or other
obligations of a Party which either by their express terms or by their nature
would survive the expiration of the Term.
ARTICLE 12
MISCELLANEOUS PROVISIONS
     12.1 Debarred Persons. Nektar will not use any Debarred Person in
performing its obligations under this Supply Agreement. Nektar will promptly
notify Amgen in writing if any Person who is performing the Manufacturing is or
becomes a Debarred Person or if any action, suit, claim, investigation, or other
legal or administrative proceeding is pending or, to the best of Nektar’s
knowledge, threatened, that would make any Person performing the Manufacturing a
Debarred Person or would preclude Nektar from performing its obligations under
this Supply Agreement.
     12.2 Right to Set-off. Each Party has the right, in addition to any other
right or remedy it might have under this Supply Agreement, to set-off against or
withhold amounts otherwise due and payable to the other Party under this Supply
Agreement: (i) the full or partial amount of all damages, losses, costs, and
expenses incurred by such Party resulting from the other Party’s breach of or
other failure to perform under this Supply Agreement; and (ii) the full or
partial amount of any other amounts due and payable to such Party by the other
Party including without limitation those amounts arising under this Supply
Agreement. The foregoing right of set-off shall not prevent a Party from
pursuing a legal remedy or judicial determination that such right of set-off was
not properly exercised.
     12.3 No Exclusivity or Minimum. Nothing contained herein shall (i) obligate
Amgen to any exclusive relationship with Nektar, (ii) restrict or preclude Amgen
from contracting with any competitor of Nektar, or (iii) obligate Amgen to
purchase any minimum amount of Product from Nektar. Nothing contained herein
shall (i) with the exception of exclusive use of the Manufacturing Suite and
Manufacturing Line as set forth in Section 3.1, obligate Nektar to any exclusive
relationship with Amgen or (ii) restrict or preclude Nektar from contracting
with any competitor of Amgen.
     12.4 Precedence. In the event of a conflict between (i) the terms and
conditions set forth in this Supply Agreement or any Order and (ii) the terms
and conditions set forth in any document (including without limitation Nektar’s
acknowledgments of Orders or Nektar’s invoices) issued in connection with this
Supply Agreement or any Order, the terms and conditions set forth in this Supply
Agreement and, as applicable, an Order shall control. In the event of a conflict
between the terms and conditions of this Supply Agreement and the terms and
conditions of an Order, the terms and conditions of this Supply Agreement

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
shall control. In the event of a conflict between the terms and conditions of
this Supply Agreement and any exhibit or attachment to this Supply Agreement
(including without limitation the Quality Agreement), the terms and conditions
of this Supply Agreement shall control.
12.5 Recordkeeping and Audit.
     (a) Nektar Obligations. Nektar shall maintain complete, accurate and
correct books, records and accounts relating to the performance of
Manufacturing, Releasing and Delivering including without limitation those
relating to the Raw Materials Direct Costs and performance obligations set forth
in the Quality Agreement. All books, records and accounts relating to financial
matters must be in a format consistent with GAAP. Nektar shall maintain such
books, records and accounts for a period of [***] after the expiration or
termination of this Supply Agreement. Without limiting and in addition to the
terms of the Quality Agreement regarding documentation and recordkeeping, upon
Amgen’s reasonable request, Nektar shall make available to Amgen and its
representatives such books, records and accounts for copy, review and audit at
such reasonable times and locations reasonably designated by Nektar during the
Term and [***] thereafter. Notwithstanding anything to the contrary contained
herein, all costs associated with such maintenance of Nektar’s books, records
and accounts shall be at Nektar’s sole expense and shall not be reimbursable by
Amgen hereunder. Should Nektar fail to maintain such books, records or accounts
as required hereunder, Nektar shall provide its good faith assistance to, and
reimburse Amgen for its reasonable costs to, recreate such books, records and
accounts. In the event that as part of an audit Amgen or its representatives
determine that, given the terms of this Supply Agreement, Amgen overpaid Nektar,
then, unless the subject of a good faith dispute (in which case Nektar shall
notify Amgen of, and the basis for, such good faith dispute and such dispute
shall be subject to Section 12.18), Nektar shall repay to Amgen the overpaid
amount within [***] after Amgen’s written demand therefor. However, Nektar shall
have the right to respond to Amgen’s audit findings within [***] following
notice of such findings. In the event that as part of an audit Amgen or its
representatives determine that, given the terms of this Supply Agreement, Amgen
underpaid Nektar, Amgen shall promptly notify Nektar of such underpayment and
pay to Nektar the amount of the underpayment within [***] after the date of such
notification. Amgen’s performance of an audit and Nektar’s repayment of any
overpaid amounts shall not limit any of Amgen’s rights or remedies with respect
to such overpaid amounts or Nektar’s performance of its obligations under this
Supply Agreement, all of which rights and remedies are reserved by Amgen. The
audit rights specified in this section are in addition to any other audit rights
provided for in this Supply Agreement (including without limitation those
provided for in the Quality Agreement).

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
     (b) Amgen Obligations. Only after the Operation Election Date and only with
respect to the quantity of the Amgen Manufactured Product, Amgen shall maintain,
or cause to be maintained, complete and accurate records of the quantity of the
Amgen Manufactured Product (collectively, the “Amgen Records”). Amgen shall
maintain the Amgen Records for a period of no less than [***] after the
expiration or termination of this Supply Agreement. Amgen shall make the Amgen
Records available to Nektar for copy, review and audit at such reasonable times
and locations reasonably designated by Amgen during the Term and [***]
thereafter. Notwithstanding anything to the contrary contained herein, all costs
associated with such maintenance of the Amgen Records shall be at Amgen’s sole
expense and shall not be reimbursable by Nektar hereunder. Should Amgen fail to
maintain the Amgen Records as required hereunder, Amgen shall provide its good
faith assistance to, and reimburse Nektar for its reasonable costs to, recreate
such books, records and accounts. In the event that as part of an audit Nektar
determines that given the terms of Section 3.2 Amgen underpaid Nektar, unless
the subject of a good faith dispute (in which case Amgen shall notify Nektar of,
and the basis for, such good faith dispute and such dispute shall be subject to
Section 12.18), then Amgen shall pay to Nektar the underpaid amount upon
Nektar’s written demand therefor within [***] after Nektar’s written demand
therefor.
12.6 Assignment. Neither this Supply Agreement nor any interest hereunder shall
be assignable by Nektar or Amgen without the prior written consent of the other
Party; provided however, that this Supply Agreement may be assigned by either
Nektar or Amgen (the “Assigning Party”) in connection with a transaction that is
a Change of Control provided that within [***] after the closing of each such
transaction the successor or surviving Person delivers to the other Party a
written commitment signed by the successor or surviving Person stating that it
shall comply with all of the terms, conditions and performance obligations under
this Supply Agreement. This Supply Agreement shall be binding upon the
successors and permitted assigns of each Party and the name of a Party appearing
herein shall be deemed to include the names of such Party’s successors and
permitted assigns to the extent necessary to carry out the intent of this Supply
Agreement. Any assignment not in accordance with this Section 12.6 shall be
void.
12.7 Further Actions. Each Party agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary or
appropriate or reasonably requested by the other Party in order to carry out the
purposes and intent of this Supply Agreement and to evidence, perfect or
otherwise confirm its rights hereunder. Amgen will have the right to exercise
its rights and perform its obligations hereunder through its Affiliates;
provided that Amgen will be responsible for its Affiliates’ performance
hereunder.

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
12.8 No Trademark Rights. Except as expressly otherwise authorized herein, no
right, express or implied, is granted by this Supply Agreement to use in any
manner the name “Amgen” or “Nektar” or any other trademark, service mark or
trade name of the other Party or any of its respective Affiliates in connection
with the performance of this Supply Agreement.
12.9 Disclosure of Supply Agreement and Public Announcements. The Parties agree
that the contents of this Supply Agreement shall be considered Confidential
Information of the Parties. Notwithstanding the foregoing and Section 10.1,
above, each Party shall have the right to disclose in confidence the material
terms of this Supply Agreement to Third Parties retained by such Party to
perform legal, accounting or similar advisory services who have a need to know
such terms in order to provide such advisory services provided that such Third
Parties are subject to written obligations of confidentiality at least as
stringent as those contained in this Supply Agreement. Nektar shall not make any
public announcement about the Supply Agreement, or any part thereof, or its
business relationship with Amgen or one or more of its Affiliates (collectively,
“Announcement”) unless prior written consent is obtained from Amgen, [***];
provided however, if and to the extent, based on consultation with outside legal
counsel, Nektar is obligated pursuant to Applicable Law or the rules of a
securities exchange on which Nektar is listed (“Applicable Securities Rules”) to
make an Announcement or disclose any of the terms of this Supply Agreement (each
a “Mandatory Disclosure”), then, as much in advance of each such Mandatory
Disclosure as practicable, Nektar shall (i) notify Amgen of the proposed content
of the Mandatory Disclosure, (ii) give Amgen reasonable opportunity to review
and comment on the proposed content of the Mandatory Disclosure, and (iii) in
good faith, consider and revise the content of the Mandatory Disclosure based on
comments received from Amgen and submit the revised Mandatory Disclosure to
Amgen for review and consent, such consent not to be unreasonably withhold,
delay or conditioned. Nektar shall include in each Mandatory Disclosure only the
information required to be disclosed by Applicable Law or Applicable Securities
Rules, and, to the extent possible, Nektar shall seek confidential treatment of
each Mandatory Disclosure.
12.10 Notices. All notices and other communications by a Party to the other
Party hereunder shall be in writing and shall be deemed given if delivered
personally or by facsimile transmission (receipt confirmed by the other Party),
mailed by registered or certified mail (return receipt requested) postage
prepaid, or sent by courier service, at the following addresses for such other
Party (or at such other address for a Party as shall be specified by like
notice):
     If to Amgen, addressed to:
          [***]

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
     With a copy to:
          [***]
     If to Nektar, addressed to:
          [***]
12.11 Amendment. No amendment, modification or supplement of any provision of
this Supply Agreement shall be valid or effective unless made in writing and
signed by a duly authorized representative of Nektar, Amgen Inc. and Amgen
Manufacturing, Limited.
12.12 Waiver. No provision of this Supply Agreement shall be waived by any act,
omission or knowledge of a Party or its Affiliates, agents or employees except
by an instrument in writing expressly waiving such provision and signed by a
duly authorized officer of the waiving Party.
12.13 Counterparts. This Supply Agreement may be executed in any number of
counterparts, each of which need not contain the signature of more than one
Party but all such counterparts taken together shall constitute one and the same
agreement. An executed signature page of this Supply Agreement delivered by
facsimile transmission or by electronic mail in “portable document format”
(“.pdf”) shall be as effective as an original executed signature page.
12.14 Descriptive Headings. The descriptive headings of this Supply Agreement
are for convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Supply Agreement.
12.15 Governing Law. This Supply Agreement shall be governed by and interpreted
in accordance with the substantive laws of the State of California and the
Parties hereby submit to the jurisdiction of the California courts, both state
and federal.
12.16 Severability. Whenever possible, each provision of this Supply Agreement
will be interpreted in such manner as to be effective and valid under Applicable
Laws, but if any provision of this Supply Agreement is held to be prohibited by
or invalid under Applicable Laws, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Supply Agreement. In the event that any one or more of the provisions
contained in this Supply Agreement is held invalid, illegal or unenforceable,
the Parties shall negotiate in good faith with a view to the substitution
therefor of a suitable and equitable provision in order to carry out, so far as
may be valid and enforceable, the original intent and purpose of such invalid

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
provision. To the fullest extent permitted by Applicable Law, the Parties waive
any provision of Applicable Law that would render any provision in this Supply
Agreement invalid, illegal or unenforceable in any respect. The provisions of
this Supply Agreement shall be liberally construed in order to carry out the
intentions of the Parties hereto as nearly as may be possible.
12.17 Entire Agreement of the Parties. This Supply Agreement constitutes and
contains the complete, final and exclusive understanding and agreement of the
Parties and cancels and supersedes any and all prior negotiations,
correspondence, understanding and agreements, whether oral or written, between
the Parties respecting the subject matter thereof.
12.18 Dispute Resolution. As set forth in Exhibit 9, the Parties have designated
representatives from each major functional area related to the Manufacture,
Release and Delivery of Product and supplier relationship management (each a
“Representative”). Each Representative shall be selected based on their
expertise and experience in the functional area of expertise identified in
Exhibit 9 that they represent. The initial Representatives are listed in Exhibit
9. A Party may change, at any time and from time to time, any or all of its
Representatives upon prior written notice to the other Party. No Representative,
including without limitation by their actions, decisions, or meeting minutes,
shall have the authority to amend or modify the terms and provisions of this
Supply Agreement. Any and all amendments or modifications of this Supply
Agreement may be made only as set forth in Section 12.11. The Parties recognize
that a bona fide dispute as to certain matters related to Manufacturing,
Releasing and Delivering the Product or a Party’s rights or remedies under this
Supply Agreement may arise from time to time. In the event of the occurrence of
such a dispute, Representatives from each Party in each area of expertise
relevant to such dispute shall undertake good faith efforts to resolve any such
dispute in good faith. In the event the Representatives shall be unable to
resolve any such dispute, a Representative may, but shall not be obligated to,
have such dispute referred to each Party’s Representative who is the executive
sponsor and, after such referral, the executive sponsors shall undertake good
faith efforts to resolve any such dispute in good faith. In the event the
dispute is not resolved by the executive sponsors, then by written notice to the
other Party, a Party may, but shall not be obligated to, have such dispute
referred to Amgen’s Senior Vice President of Manufacturing and, if the dispute
is related to business (as opposed to technical) terms of this Supply Agreement,
Amgen’s Vice President, Global Strategic Sourcing & Chief Procurement Officer,
and Nektar’s President for attempted resolution by good faith negotiations
within [***], or such other period as may be agreed to by the Parties, after
such written notice is received. On a dispute-by-dispute basis, each executive
sponsor, Amgen’s Senior Vice President of Manufacturing, Amgen’s Vice President,
Global Strategic Sourcing & Chief Procurement Officer, and Nektar’s President
shall be entitled to designate another within

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***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
their company to fulfill their obligations under this Section. Notwithstanding
the dispute resolution escalation path set forth in this Section 12.18, each
Party shall have the right to pursue any and all remedies available at law or in
equity.
12.19 Remedies Cumulative. The remedies afforded to each Party under this Supply
Agreement are not exclusive and are in addition to any other rights and remedies
available to each Party under this Supply Agreement or otherwise and any other
rights and remedies now or hereafter provided by law or at equity.
12.20 Independent Contractors. The relationship between Amgen and Nektar created
by this Supply Agreement is one of independent contractors and neither Nektar
nor Amgen shall have the power or authority to bind or obligate the other except
as expressly set forth in this Supply Agreement.
12.21 Force Majeure. A Party (the “Affected Party”) shall not be liable to the
other Party for losses or damages under this Supply Agreement, and the other
Party shall not have the right to terminate this Supply Agreement for any
default or delay in performance under this Supply Agreement by the Affected
Party, that is directly attributable to a Force Majeure Event provided that the
Affected Party shall (i) have given prompt notice by the most expedient method
possible (to be promptly confirmed in writing) to the other Party of the
occurrence of the Force Majeure Event describing at a reasonable level of detail
the circumstances causing the default or delay in performance, (ii) commence,
and continue to take, reasonable and diligent actions to recommence performance
of such obligations or cure such default whenever and to whatever extent
possible following the Force Majeure Event, and (iii) only be excused from such
liability, and the other Party shall only be so restricted from terminating this
Supply Agreement for such failure to perform, for so long as such Force Majeure
Event requires prior to recommencement of performance. In the event of a Force
Majeure Event, to the extent that resources available to Nektar are limited,
Nektar shall preferentially allocate such limited resources to Amgen.
12.22 Specific Performance. Each Party hereby acknowledges and agrees that there
can be no adequate or meaningful remedy at law to compensate Amgen for Nektar’s
breach of its obligations hereunder; that any such breach will result in
irreparable harm to Amgen that would be difficult to measure and calculate; and,
therefore, that upon any such breach of Nektar’s obligations, Amgen shall be
entitled to specific performance by Nektar without the necessity of proving
actual damages or of posting a bond, and, although Amgen shall not be obligated
to seek specific performance by Nektar, if Amgen seeks and is not granted
specific performance, Amgen will be entitled to full remedies available at law
or in equity, which remedies may include without limitation direct, indirect,
special, incidental, exemplary, consequential, lost profits and punitive
damages.

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Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
12.23 Equal Opportunity/Affirmative Action. Nektar agrees that it shall perform
its obligations under this Supply Agreement in full compliance the Equal
Opportunity Clauses set forth in 41 C.F.R. §§ 60-1.4(a), 60-250.5(a) and
60-741.5(a) and the employee notice and related obligations found at 29 C.F.R.
Part 471, Appendix A to Subpart A, Title VII of the Civil Rights Act of 1964;
Sections (1) and (3) of Executive Order No. 11625 relating to the promotion of
Minority Business Enterprises; Americans with Disabilities Act; Age
Discrimination in Employment Act; Fair Labor Standards Act; Family Medical Leave
Act; and all corresponding implementing rules and regulations, all of which,
including without limitation the contract clauses required and regulations
promulgated thereunder, are incorporated herein by reference.
12.24 Consolidation. To the extent feasible, for each notice, request, Order,
consent or agreement specified or provided for hereunder, such notice, request,
Order, consent or agreement may be issued or made by either Amgen Inc. or Amgen
Manufacturing, Limited, and each such notice, request, Order, consent or
agreement shall be binding on both Amgen Inc. and Amgen Manufacturing, Limited.
To the extent that Amgen is obligated to make one or more payments to Nektar
hereunder, a payment by Amgen Inc. or Amgen Manufacturing, Limited shall satisfy
such payment obligation.
[Signature Page Follows]

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EXECUTION COPY
***Text Omitted and Filed Separately with the Securities and Exchange
Commission. Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2
IN WITNESS WHEREOF, the Parties hereto have executed this Supply, Dedicated
Suite and Manufacturing Guarantee Agreement.

                  AMGEN INC.   NEKTAR THERAPEUTICS    
 
               
Signature:
  [***]
 
  Signature:   [***]
 
   
 
                Printed Name: [***]   Printed Name: [***]    
 
                Title: [***]   Title: [***]    
 
                AMGEN MANUFACTURING, LIMITED            
 
               
Signature:
  [***]
 
           
 
                Printed Name: [***]            
 
                Title: [***]            

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