Exhibit 10.34





Exhibit 10.34




FOIA CONFIDENTIAL TREATMENT REQUESTED




EXCLUSIVE RESEARCH, DEVELOPMENT,




LICENSE AND MANUFACTURING

AND SUPPLY AGREEMENT




BY AND AMONG




NEKTAR THERAPEUTICS AL, CORPORATION




AND




BAXTER HEALTHCARE SA




AND




BAXTER HEALTHCARE CORPORATION




DATED SEPTEMBER 26, 2005



 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	1. DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2. RESEARCH AND DEVELOPMENT ACTIVITIES
	 	 	16	 
	 
	 	 	 	 
	2.1 OVERVIEW
	 	 	16	 
	 
	 	 	 	 
	2.2 NEKTAR AL PAYMENTS
	 	 	17	 
	 
	 	 	 	 
	2.3 MARKETING AUTHORIZATION
	 	 	18	 
	 
	 	 	 	 
	2.4 MATERIALS
	 	 	18	 
	 
	 	 	 	 
	2.5 HANDLING
	 	 	20	 
	 
	 	 	 	 
	2.6 SELECTION OF POTENTIAL PRODUCTS AND [***]
	 	 	20	 
	 
	 	 	 	 
	2.7 DISCLAIMER OF WARRANTY WITH RESPECT TO BAXTER MATERIALS
	 	 	20	 
	 
	 	 	 	 
	3. GOVERNANCE
	 	 	21	 
	 
	 	 	 	 
	3.1 JOINT STEERING COMMITTEE
	 	 	21	 
	 
	 	 	 	 
	3.2 RESEARCH COMMITTEE
	 	 	23	 
	 
	 	 	 	 
	3.3 DEVELOPMENT AND PRODUCTION COMMITTEE
	 	 	25	 
	 
	 	 	 	 
	3.4 AMENDMENT; WAIVER
	 	 	25	 






 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
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	 	 	Page	 
	 
	 	 	 	 
	4. LICENSES TO NEKTAR AL LICENSED TECHNOLOGY AND BAXTER TECHNOLOGY
	 	 	26	 
	 
	 	 	 	 
	4.1 LICENSE TO BAXTER
	 	 	26	 
	 
	 	 	 	 
	4.2 TERMS OF SUBLICENSE
	 	 	26	 
	 
	 	 	 	 
	4.3 NEKTAR AL RESEARCH RIGHTS AND LIMITATIONS
	 	 	27	 
	 
	 	 	 	 
	4.4 NO IMPLIED RIGHTS OR LICENSES
	 	 	28	 
	 
	 	 	 	 
	4.5 LICENSE TO NEKTAR AL
	 	 	28	 
	 
	 	 	 	 
	4.6 MUTUAL COVENANT
	 	 	28	 
	 
	 	 	 	 
	5. MANUFACTURE AND SUPPLY OF SELECTED REAGENTS
	 	 	29	 
	 
	 	 	 	 
	5.1 [***]
	 	 	29	 
	 
	 	 	 	 
	5.2 SUPPLY PRIOR TO PIVOTAL TRIAL/SUPPLY AGREEMENT
	 	 	29	 
	 
	 	 	 	 
	5.3 PIVOTAL TRIAL AND COMMERCIAL PRODUCT SUPPLY AGREEMENT
	 	 	30	 
	 
	 	 	 	 
	6. SPECIFICATIONS AND MANUFACTURING WARRANTY FOR SELECTED REAGENTS
	 	 	31	 
	 
	 	 	 	 
	6.1 SPECIFICATIONS 
	 	 	31	 
	 
	 	 	 	 
	6.2 COMPLIANCE AUDITS 
	 	 	31	 
	 
	 	 	 	 
	6.3 WARRANTY 
	 	 	31	 
	 
	 	 	 	 
	6.4 DISCLAIMER OF WARRANTY 
	 	 	32	 






 





	 	 	 
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	 	 	Page	 
	 
	 	 	 	 
	7. EXCLUSIVITY; [***] 
	 	 	33	 
	 
	 	 	 	 
	7.1 NEKTAR AL 
	 	 	33	 
	 
	 	 	 	 
	7.2 BAXTER 
	 	 	33	 
	 
	 	 	 	 
	8. QUALITY AND COMPLAINTS 
	 	 	34	 
	 
	 	 	 	 
	8.1 ANALYSIS 
	 	 	34	 
	 
	 	 	 	 
	8.2 ACCEPTANCE AND REJECTION 
	 	 	35	 
	 
	 	 	 	 
	8.3 REPLACEMENT OF NONCONFORMING REAGENT 
	 	 	36	 
	 
	 	 	 	 
	8.4 LIABILITY TO BAXTER FOR NONCONFORMING REAGENT 
	 	 	36	 
	 
	 	 	 	 
	8.5 [INTENTIONALLY OMITTED] 
	 	 	37	 
	 
	 	 	 	 
	8.6 FEES FOR MANUFACTURING AND SUPPLY OF SELECTED REAGENTS PRIOR TO PIVOTAL TRIAL
	 	 	37	 
	 
	 	 	 	 
	9. MILESTONES; ROYALTY PAYMENTS; ROYALTY REPORTS 
	 	 	39	 
	 
	 	 	 	 
	9.1 MILESTONE PAYMENTS 
	 	 	39	 
	 
	 	 	 	 
	9.2 ROYALTIES 
	 	 	42	 
	 
	 	 	 	 
	9.3 SEPARATE COMPONENTS 
	 	 	45	 
	 
	 	 	 	 
	9.4 COMMERCIAL DILIGENCE 
	 	 	45	 
	 
	 	 	 	 
	9.5 REPORTS, EXCHANGE RATES 
	 	 	46	 
	 
	 	 	 	 
	9.6 THIRD PARTY ROYALTIES, ETC 
	 	 	47	 






 





	 	 	 
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	 	 	Page	 
	 
	 	 	 	 
	10. RECORDS; AUDITS; SHIPMENT TERMS; PAYMENT TERMS 
	 	 	47	 
	 
	 	 	 	 
	10.1 RECORDS 
	 	 	47	 
	 
	 	 	 	 
	10.2 AUDITS 
	 	 	48	 
	 
	 	 	 	 
	10.3 INVOICING; PAYMENT TERMS 
	 	 	49	 
	 
	 	 	 	 
	10.4 PAYMENT METHOD 
	 	 	49	 
	 
	 	 	 	 
	10.5 TAXES 
	 	 	49	 
	 
	 	 	 	 
	11. CONFIDENTIALITY 
	 	 	50	 
	 
	 	 	 	 
	11.1 TERMINATION OF NON-DISCLOSURE AGREEMENT 
	 	 	50	 
	 
	 	 	 	 
	11.2 IN GENERAL 
	 	 	50	 
	 
	 	 	 	 
	11.3 ADDITIONAL PROTECTIONS 
	 	 	52	 
	 
	 	 	 	 
	11.4 PERMITTED DISCLOSURES 
	 	 	52	 
	 
	 	 	 	 
	11.5 IRREPARABLE INJURY 
	 	 	53	 
	 
	 	 	 	 
	12. REGULATORY MATTERS 
	 	 	53	 
	 
	 	 	 	 
	12.1 COMPLAINTS/ADVERSE EVENTS 
	 	 	53	 
	 
	 	 	 	 
	12.2 SPECIFIC REQUIREMENTS 
	 	 	53	 
	 
	 	 	 	 
	13. REPRESENTATIONS & WARRANTIES; COVENANTS 
	 	 	54	 
	 
	 	 	 	 
	13.1 REPRESENTATIONS AND WARRANTIES 
	 	 	54	 
	 
	 	 	 	 
	13.2 COMPLIANCE WITH LAWS 
	 	 	54	 






 





	 	 	 
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	 	 	Page	 
	 
	 	 	 	 
	14. LIMITATION OF LIABILITY; EXCLUSION OF DAMAGES 
	 	 	55	 
	 
	 	 	 	 
	14.1 LIMITATION OF LIABILITY 
	 	 	55	 
	 
	 	 	 	 
	14.2 REMEDIES 
	 	 	55	 
	 
	 	 	 	 
	14.3 APPLICABILITY, EXCLUSIVITY OF REMEDIES 
	 	 	56	 
	 
	 	 	 	 
	15. INDEMNIFICATION; INSURANCE 
	 	 	56	 
	 
	 	 	 	 
	15.1 INDEMNITY 
	 	 	56	 
	 
	 	 	 	 
	15.2 INSURANCE 
	 	 	57	 
	 
	 	 	 	 
	15.3 PROCEDURES 
	 	 	57	 
	 
	 	 	 	 
	16. INVENTIONS, KNOW-HOW AND PATENTS 
	 	 	59	 
	 
	 	 	 	 
	16.1 EXISTING INTELLECTUAL PROPERTY 
	 	 	59	 
	 
	 	 	 	 
	16.2 DISCLOSURE 
	 	 	59	 
	 
	 	 	 	 
	16.3 OWNERSHIP OF INVENTIONS 
	 	 	59	 
	 
	 	 	 	 
	16.4 NEKTAR AL CORE TECHNOLOGY INVENTIONS 
	 	 	60	 
	 
	 	 	 	 
	16.5 BAXTER CORE TECHNOLOGY INVENTIONS 
	 	 	61	 
	 
	 	 	 	 
	16.6 INDIVIDUAL PATENT FILINGS 
	 	 	61	 
	 
	 	 	 	 
	16.7 JOINT PATENT FILINGS 
	 	 	62	 
	 
	 	 	 	 
	16.8 DISPOSITION OF INVENTIONS 
	 	 	62	 
	 
	 	 	 	 
	16.9 FURTHER ACTIONS 
	 	 	63	 
	 
	 	 	 	 
	16.10 PATENT MARKING AND POTENTIAL PRODUCT AND
COMMERCIAL PRODUCT MARKING 
	 	 	63	 
	 
	 	 	 	 
	16.11 SUPPLEMENTAL PATENT PROTECTION 
	 	 	63	 






 





	 	 	 
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	 	 	Page	 
	 
	 	 	 	 
	17. INFRINGEMENT 
	 	 	64	 
	 
	 	 	 	 
	17.1 INFRINGEMENT OF THIRD PARTY RIGHTS 
	 	 	64	 
	 
	 	 	 	 
	17.2 INFRINGEMENT BY THIRD PARTIES 
	 	 	65	 
	 
	 	 	 	 
	18. [INTENTIONALLY OMITTED] 
	 	 	67	 
	 
	 	 	 	 
	19. TERM AND TERMINATION 
	 	 	67	 
	 
	 	 	 	 
	19.1 EXPIRATION 
	 	 	67	 
	 
	 	 	 	 
	19.2 DISCRETIONARY TERMINATION 
	 	 	67	 
	 
	 	 	 	 
	19.3 TERMINATION FOR CAUSE 
	 	 	68	 
	 
	 	 	 	 
	19.4 TERMINATION FOR INSOLVENCY 
	 	 	68	 
	 
	 	 	 	 
	19.5 TERMINATION/[***] FOR LACK OF
DILIGENCE 
	 	 	68	 
	 
	 	 	 	 
	19.6 TERMINATION ON CHALLENGE 
	 	 	71	 
	 
	 	 	 	 
	19.7 EFFECT OF TERMINATION 
	 	 	71	 






 





	 	 	 
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	 	 	Page	 
	 
	 	 	 	 
	20. ASSIGNMENT 
	 	 	74	 
	 
	 	 	 	 
	21. NOTICES 
	 	 	74	 
	 
	 	 	 	 
	22. MISCELLANEOUS 
	 	 	76	 
	 
	 	 	 	 
	22.1 FORCE MAJEURE 
	 	 	76	 
	 
	 	 	 	 
	22.2 SEVERABILITY 
	 	 	77	 
	 
	 	 	 	 
	22.3 VARIATION 
	 	 	77	 
	 
	 	 	 	 
	22.4 FORBEARANCE AND WAIVER 
	 	 	77	 
	 
	 	 	 	 
	22.5 COUNTERPARTS; FACSIMILE 
	 	 	77	 
	 
	 	 	 	 
	22.6 NO PARTNERSHIP 
	 	 	78	 
	 
	 	 	 	 
	22.7 CONSTRUCTION 
	 	 	78	 
	 
	 	 	 	 
	22.8 ENTIRE AGREEMENT 
	 	 	78	 
	 
	 	 	 	 
	22.9 GOVERNING LAW 
	 	 	79	 
	 
	 	 	 	 
	22.10 PUBLICITY 
	 	 	79	 








 





	 	 	 
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the Securities and Exchange Commission. Confidential treatment has
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-viii-









 







TABLE OF CONTENTS




(continued)




	 
	SCHEDULE I — RESEARCH PLAN

	 

	SCHEDULE II — MILESTONES

	 

	SCHEDULE III — QUALITY AGREEMENT

	 

	SCHEDULE IV  — BAXTER DE ELOPMENT DILIGENCE TIMELINES

	 

	SCHEDULE V  — TERMS AND CONDITIONS OF SUPPLY AGREEMENT

	 

	SCHEDULE VI — MANUFACTURING COST

	 

	SCHEDULE VII — PERMITTED ACTIVITIES

	 

	EXHIBIT 1 — BAXTER RESEARCH PLAN








 





	 	 	 
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EXCLUSIVE RESEARCH, DEVELOPMENT, AND LICENSE

AGREEMENT




This Agreement (this “AGREEMENT”) is made and entered into as of September 26, 2005 (the “EFFECTIVE
DATE”) by and among Nektar Therapeutics AL, Corporation, an Alabama corporation, having its
principal place of business at 490 Discovery Drive, Huntsville, AL 35806 (“NEKTAR AL”), Baxter
Healthcare SA (“BHSA”), a corporation organized and existing under the laws of Switzerland, and
Baxter Healthcare Corporation (“BHC”), a Delaware corporation, having its principal place of
business at One Baxter Parkway, Deerfield, Illinois 60015 (BHSA and BHC collectively referred to as
“BAXTER”). NEKTAR AL and BAXTER may be referred to herein individually as a “PARTY” and
collectively as the “PARTIES.”



RECITALS




WHEREAS, BAXTER is in the business of developing, making, marketing and selling biopharmaceutical
products for the treatment of bleeding disorders;



WHEREAS, NEKTAR AL has proprietary technology useful for attaching poly(ethylene) glycol-based
molecules to pharmaceutical compounds, and is engaged in the business of performing research in
relation to REAGENTS and CONJUGATES and manufacturing bulk quantities of REAGENTS used in the
manufacture of pharmaceutical products;



WHEREAS, BAXTER has developed proprietary technology concerning FACTOR VIII and [***], including
the [***] for improving the half-life of FACTOR VIII, and desires to continue such development by
entering into an exclusive research and development agreement with NEKTAR AL for the purpose of
determining whether NEKTAR AL’s proprietary technology can improve the same, and NEKTAR AL desires
to exclusively partner with BAXTER to perform such continued development for extending the
half-life of FACTOR VIII using its proprietary technology directly with FACTOR VIII or [***];


 





	 	 	 
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the Securities and Exchange Commission. Confidential treatment has
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1









 





WHEREAS, BAXTER desires to provide NEKTAR AL with recombinant FACTOR VIII and [***] to use in
developing SELECTED REAGENTS and CONJUGATES, and NEKTAR AL desires to, as provided for in this
AGREEMENT, provide BAXTER with CONJUGATES and SELECTED REAGENTS for BAXTER’s evaluation and
potential pre-clinical, clinical and/or commercial development;



WHEREAS, BAXTER shall bear all costs associated with the research and development of NEKTAR AL’s
CONJUGATES and REAGENTS into POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS, and shall have ultimate
control over all product development decisions;



WHEREAS, NEKTAR AL desires to manufacture and supply BAXTER with all of its SELECTED REAGENT
requirements (including pre-clinical, clinical trial, POTENTIAL PRODUCT and COMMERCIAL PRODUCT
requirements) and BAXTER desires to satisfy all of its SELECTED REAGENT requirements from NEKTAR
AL; and



WHEREAS, BAXTER shall have an exclusive license to any POTENTIAL PRODUCTS or COMMERCIAL PRODUCTS
developed in the course of this AGREEMENT.



NOW, THEREFORE, in consideration of the foregoing and the covenants and promises contained in this
AGREEMENT and in accordance with and subject to the terms and conditions specified below, the
PARTIES agree as follows:



AGREEMENT 1.

Definitions





	 	1.1	 	“AFFILIATE” means, with respect to any person or entity, any other person or
entity that directly or indirectly controls, is controlled by, or is under common
control with, such person or entity. For purposes of this definition only, “control,”
“controlled by” and “under common control with” shall mean the possession of the power
to direct or
cause the direction of the management and policies of an entity, whether through
the ownership of voting stock or partnership interest, by contract or otherwise. In
the case of a corporation, the direct or indirect ownership of fifty percent (50%)
or more of its outstanding voting shares or the ability otherwise to elect a
majority of the board of directors or other managing authority of the entity shall
in any event be deemed to confer control, it being understood that the direct or
indirect ownership of a lesser percentage of such shares shall not necessarily
preclude the existence of control.





 





	 	 	 
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the Securities and Exchange Commission. Confidential treatment has
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2









 





	 	1.2	 	“BAXTER CORE TECHNOLOGY” means:







	 	(i)	 	[***];

	 
	 	(ii)	 	a composition of a [***] as disclosed in any of the examples of
the [***] on the EFFECTIVE DATE, or [***] shall not fall within the BAXTER CORE
TECHNOLOGY and shall instead be considered JOINTLY OWNED TECHNOLOGY;

	 
	 	(iii)	 	a method of: (a) [***]; provided that in each case none of
such methods employs a NEKTAR PROPRIETARY METHOD on the EFFECTIVE DATE.

	 
	 	(iv)	 	methods of [***];

	 
	 	(v)	 	methods of [***];

	 
	 	(vi)	 	methods of [***];

	 
	 	(vii)	 	[***];

	 
	 	(viii)	 	methods of [***];

	 
	 	(ix)	 	the methods [***];

	 
	 	(x)	 	[***].





 





	 	 	 
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the Securities and Exchange Commission. Confidential treatment has
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3









 











	 	1.3	 	“BAXTER CORE TECHNOLOGY INVENTIONS” has the meaning set forth in Section 16.5.

	 
	 	1.4	 	“BAXTER INDEMNITEE” has the meaning set forth in Section 15.1.1.







	 	1.5	 	“BAXTER KNOW-HOW” means all KNOW-HOW [***]. For the avoidance of doubt, [***]
are excluded from the definition of BAXTER KNOW-HOW.

	 
	 	1.6	 	“BAXTER MATERIALS” has the meaning set forth in Section 2.4.2.







	 	1.7	 	“BAXTER PATENT RIGHTS” means all claims in those PATENTS and PATENT
APPLICATIONS (i) [***] and (ii) that [***].







	 	1.8	 	“BAXTER PROPRIETARY CONJUGATE” means a CONJUGATE, the composition of matter,
manufacture, use, offer for sale, sale or import of which is covered by a claim of the
[***].







	 	1.9	 	[***] means BAXTER’s provisional patent applications [***] (the
“PROVISIONALS”), and any U.S. or other patent applications claiming priority therefrom,
including any continuation, divisional, reissue, reexamination or substitution (and in
each case any foreign counterpart thereto), and any extension, renewal or supplemental
protection certificate; provided that the only additional information that may be added
after the EFFECTIVE DATE to the disclosure of the PROVISIONALS (“ADDITIONAL
INFORMATION”) in the preparation of a U.S. or other patent application claiming
priority from the PROVISIONALS shall be [***]. For avoidance of doubt, BAXTER agrees
that (a) [***].





 





	 	 	 
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the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	1.10	 	“BLA” means a Biologics License Application filed with the FDA pursuant to 21
C.F.R. § 601.2 et seq., or any foreign equivalent filed with the regulatory
authorities in a country or territory to obtain MARKETING AUTHORIZATION for a
COMMERCIAL PRODUCT in such country or territory.

	 
	 	1.11	 	“CLAIMS” has the meaning set forth in Section 15.1.1.

	 
	 	1.12	 	“COMMERCIAL DILIGENCE THRESHOLD” has the meaning set forth in Section 9.4.







	 	1.13	 	“COMMERCIAL PRODUCT” means any POTENTIAL PRODUCT that has received MARKETING
AUTHORIZATION which BAXTER, its AFFILIATES and/or SUBLICENSEES market and/or sell for
administration to or use by humans or animals.

	 
	 	1.14	 	“CONFIDENTIAL INFORMATION” has the meaning set forth in Section 11.2.







	 	1.15	 	“CONJUGATE(S)” means any chemical entity obtained by the PEGYLATION of a
REAGENT to a therapeutic agent (including a THERAPEUTIC AGENT).







	 	1.16	 	“CONTRACT MANUFACTURER” means a THIRD PARTY who (a) manufactures POTENTIAL
PRODUCT or COMMERCIAL PRODUCT on behalf of BAXTER as permitted herein, or (b)
manufactures SELECTED REAGENT as permitted under and pursuant to Schedule V.







	 	1.17	 	“CONTROL(LED)” means the ability to grant a license or sublicense as provided
for herein without violating the terms of any agreement or other arrangement with any
THIRD PARTY and, with respect to KNOW-HOW, also means that which is not known to the
other PARTY prior to disclosure thereto (whether under this AGREEMENT or the
NON-DISCLOSURE AGREEMENT), nor freely available from the public domain or THIRD
PARTIES.





 





	 	 	 
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the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	1.18	 	“DEVELOPMENT AND PRODUCTION COMMITTEE” means the committee described in Section
3.3.







	 	1.19	 	“DISCLOSING PARTY” means the PARTY disclosing CONFIDENTIAL INFORMATION to the
other PARTY hereunder.







	 	1.20	 	“DOLLAR(S)” means United States dollars.







	 	1.21	 	“EMEA” means the European Medicines Evaluation Agency, and any successor agency
thereto having the administrative authority to regulate the marketing of human
pharmaceutical products, biological therapeutic products and delivery systems in the
European Union.







	 	1.22	 	“ESTIMATED COST” has the meaning set forth in Schedule VI.







	 	1.23	 	[***] means a compound that is a [***]. For clarity, [***].







	 	1.24	 	“FACTOR VIII” means a compound that is a Factor VIII molecule [***]. For
clarity, [***].







	 	1.25	 	“FDA” means the United States Food and Drug Administration or any successor
entity that may be established hereafter which has substantially the same authority or
responsibility currently vested in the United States Food and Drug Administration.







	 	1.26	 	“FIELD” means [***], either for use alone for the treatment of [***], in the
treatment of Hemophilia A, or PEGYLATED FACTOR VIII or [***] for the treatment of
Hemophilia A.







	 	1.27	 	“FIRST COMMERCIAL SALE” means, with respect to a COMMERCIAL PRODUCT, the first
sale by BAXTER or its AFFILIATES or SUBLICENSEES to a THIRD PARTY following receipt of
MARKETING AUTHORIZATION for such
COMMERCIAL PRODUCT in the country of sale.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


6









 











	 	1.28	 	“FTE” means the equivalent of an employee working [***] labor hours per year.







	 	1.29	 	“FTE RATE” has the meaning set forth in Section 2.2. 1.30 “GAAP” has the
meaning set forth in Schedule VI.







	 	1.31	 	“INITIAL ROYALTY TERM” has the meaning set forth in Section 9.2.







	 	1.32	 	“INVENTIONS” means any and all ideas, concepts, methods, procedures, processes,
improvements, inventions and discoveries, whether or not patentable, that are conceived
or first reduced to practice during and in the course of the performance of activities
conducted in connection with this AGREEMENT, including the development or manufacture
of a POTENTIAL PRODUCT or a COMMERCIAL PRODUCT.

	 
	 	1.33	 	“JOINT INVENTION” has the meaning set forth in Section 16.3.







	 	1.34	 	“JOINT PATENT APPLICATIONS” and “JOINT PATENT” have the meanings set forth in
Section 16.7.

	 
	 	1.35	 	“JOINT STEERING COMMITTEE” means the committee described in Section 3.1.







	 	1.36	 	“JOINTLY OWNED TECHNOLOGY” means an INVENTION covering the composition of
[***].







	 	1.37	 	“KNOW-HOW” means all technical, scientific and other know-how, data, materials,
information, trade secrets, ideas, formulae, inventions, discoveries, processes,
machines, compositions of matter, improvements, protocols, techniques, works of
authorship, and results of experimentation and testing (whether or not patentable) in
written, electronic, oral or any other form that is not known to the other PARTY prior
to disclosure thereto (whether under this AGREEMENT or the NON-DISCLOSURE
AGREEMENT), nor freely available from the public domain or from THIRD PARTIES.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


7









 






	 	1.38	 	“LAW(S)” means any local, state or federal rule, regulation, statute or law in
any jurisdiction relevant to the activities undertaken pursuant to this AGREEMENT or
applicable to either of the PARTIES with respect to any matters set forth herein.







	 	1.39	 	“MAJOR MARKETS” has the meaning set forth in Section 9.2.1.

	 
	 	1.40	 	“MANUFACTURING COST” has the meaning set forth in Schedule VI.







	 	1.41	 	“MARKETING AUTHORIZATION” means the requisite governmental approval for the
marketing and sale of a COMMERCIAL PRODUCT in a given country.

	 
	 	1.42	 	“MILESTONE” means the milestone payments set forth in Schedule II.

	 
	 	1.43	 	“NEKTAR AL CORE TECHNOLOGY” means:







	 	(i)	 	[***];

	 
	 	(ii)	 	methods of [***];

	 
	 	(iii)	 	methods of [***];

	 
	 	(iv)	 	methods of [***];

	 
	 	(v)	 	methods of [***];

	 
	 	(vi)	 	[***];

	 
	 	(vii)	 	methods of [***].





 





	 	 	 
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the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


8









 






	 	1.44	 	“NEKTAR AL CORE TECHNOLOGY INVENTIONS” has the meaning set forth in
Section 16.4.

	 
	 	1.45	 	“NEKTAR AL INDEMNITEE” has the meaning set forth in Section 15.1.2.

	 
	 	1.46	 	“NEKTAR AL KNOW-HOW” means all KNOW-HOW [***].







	 	1.47	 	“NEKTAR AL LICENSED TECHNOLOGY” means, collectively, the NEKTAR AL PATENT
RIGHTS and NEKTAR AL KNOW-HOW.

	 
	 	1.48	 	“NEKTAR AL MATERIALS” has the meaning set forth in Section 2.4.1.







	 	1.49	 	“NEKTAR AL PATENT RIGHTS” means all of the claims in those PATENTS and PATENT
APPLICATIONS CONTROLLED by NEKTAR AL which (i) pertain to [***].

	 
	 	1.50	 	“NEKTAR PROPRIETARY METHODS” means (i) [***].







	 	1.51	 	“NEKTAR PROPRIETARY REAGENT” means a REAGENT, the composition of matter,
manufacture, use, offer for sale, sale or import of which is covered by [***].







	 	1.52	 	“NET SALES” means the amount invoiced by BAXTER, its AFFILIATES or SUBLICENSEES
for the sale to THIRD PARTIES of COMMERCIAL PRODUCT commencing with the FIRST
COMMERCIAL SALE. [***]:







	 	(i)	 	[***];

	 
	 	(ii)	 	[***];

	 
	 	(iii)	 	[***];

	 
	 	(iv)	 	[***];

	 
	 	(v)	 	[***].





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


9









 











In addition to the foregoing [***], BAXTER may [***] of the aggregate gross amount
invoiced on account of sales of a COMMERCIAL PRODUCT by BAXTER, its AFFILIATES or
SUBLICENSEES to THIRD PARTIES in the relevant country during the relevant calendar
quarter in respect of which royalties are being calculated or (b) [***] during the
relevant calendar quarter in respect of which royalties are being calculated.




[***]. In addition, BAXTER’S NET SALES hereunder are subject to the following:




	 	(A)	 	[***];

	 
	 	(B)	 	[***];

	 
	 	(C)	 	[***].







	 	1.53	 	“NONCONFORMING REAGENTS” has the meaning set forth in Section 6.3.

	 
	 	1.54	 	“NON-DISCLOSURE AGREEMENT” means that agreement entered into between the
PARTIES on [***], providing for confidential treatment of the PARTIES’ information.







	 	1.55	 	“PATENT” means any claim in a patent including any extension, substitution,
registration, confirmation, reissue, supplemental protection certificate,
re-examination or renewal of such patent, to the extent valid and enforceable rights
are granted by a governmental authority thereunder (and in each case any foreign
counterpart thereto).







	 	1.56	 	“PATENT APPLICATION” means any claim in an application for letters patent,
including a provisional application, converted provisional application, continuation
application, a continued prosecution application, a continuation-in-part application, a
divisional application, a re-examination application, and a reissue application (and
in each case any foreign counterpart thereto).





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


10









 






	 	1.57	 	“PEG” means poly(ethylene) glycol.







	 	1.58	 	“PEGYLATION,” with correlative meanings “PEGYLATED” or to “PEGYLATE”, means
covalent chemical bonding of any REAGENT (including a SELECTED REAGENT and including
covalent chemical bonding through linking groups), with or to another material or
materials. Such materials include, without limitation, proteins, peptides, polymers,
oligomers, oligonucleotides, other biomolecules, small molecules, therapeutic agents
(including a THERAPEUTIC AGENT), diagnostic agents, imaging agents and detectable
labels. Additional materials that may be PEGYLATED include, without limitation,
polymers, liposomes, films, chemical separation and purification surfaces, solid
supports, metal/metal oxide surfaces and other surfaces such as, by way of example but
not limitation, those on implanted devices, and equipment, where a REAGENT is
covalently chemically bonded to one or more reactive molecules on the surface of such
device or equipment. “PEGYLATION” shall include the synthesis, derivatization,
characterization, and modification of PEG for such purposes, together with the
synthesis, derivatization, characterization, and modification of the raw materials and
intermediates for the manufacture of REAGENTS (including SELECTED REAGENTS) or products
(including POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS) incorporating such REAGENT by
means of covalent chemical bonding, and all methods of making and using each and all of
the foregoing.







	 	1.59	 	“PHASE 1 CLINICAL TRIAL” means the first lawful study in humans, conducted in
accordance with 21 C.F.R. §312.21(a) (or the equivalent LAWS and regulations in
jurisdictions outside the United States).





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	1.60	 	“PHASE 2 CLINICAL TRIAL” means a controlled clinical trial, conducted in
accordance with 21 C.F.R. §312.21(b) (or the equivalent LAWS and regulations in
jurisdictions outside the United States).







	 	1.61	 	“PIVOTAL TRIAL,” also known as a Phase 3 clinical trial, means a controlled or
uncontrolled clinical trial, conducted in accordance with § 21 C.F.R. 312.21(c) (or the
equivalent LAWS and regulations in jurisdictions outside the United States).







	 	1.62	 	“POTENTIAL PRODUCT” means (i) any chemical entity resulting from attachment of
any THERAPEUTIC AGENT to a SELECTED REAGENT by means of PEGYLATION that is selected by
the RESEARCH COMMITTEE or (ii) any product using PEGYLATION to extend or otherwise
improve the half-life of [***] FACTOR VIII, whether by using PEGYLATION technology
directly with [***] FACTOR VIII, or by means of the PEGYLATION of [***].







	 	1.63	 	“PURCHASE PRICE” has the meaning set forth in Section 8.6.1

	 
	 	1.64	 	“QUALITY AGREEMENT(S)” shall include:







	 	(i)	 	the quality agreement governing the manufacture and supply of
[***], which shall be negotiated by the PARTIES [***]; and







	 	(ii)	 	the quality agreement governing the manufacture and supply of
[***], which shall be negotiated by the PARTIES [***].







The QUALITY AGREEMENT(S) shall be in substantially the same form as Schedule III
hereto. For purposes hereof, [***].




	 	1.65	 	“REAGENT” means a PEG derivative used in the manufacture of a pharmaceutical
or diagnostic product or medical device, including a SELECTED REAGENT.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	1.66	 	“RECIPIENT” means the PARTY receiving CONFIDENTIAL INFORMATION hereunder.

	 
	 	1.67	 	“RESEARCH COMMITTEE” means the committee described in Section 3.2.







	 	1.68	 	“RESEARCH PLAN” means the PARTIES’ respective activities and responsibilities
as set forth in the RESEARCH PLAN attached hereto as Schedule I, as amended and
revised by the RESEARCH COMMITTEE from time to time.






	 	1.69	 	 “RESPONSIBLE PARTY” has the meaning set forth in Section 16.7.







	 	1.70	 	 “ROYALTY RATE” means the following:










	 	(i)	 	[***] NET SALES of all COMMERCIAL PRODUCTS sold in a calendar
year;







	 	(ii)	 	[***] NET SALES of all COMMERCIAL PRODUCTS sold in such
calendar year; and







	 	(iii)	 	[***] NET SALES of all COMMERCIAL PRODUCTS sold in such
calendar year [***].







By way of example but not limitation, if NET SALES of all COMMERCIAL PRODUCTS sold
in a calendar year are [***] then BAXTER shall pay to NEKTAR AL a royalty of [***]
on the [***] of such NET SALES, [***] on the portion of such NET SALES between
[***] and [***] and [***] on the portion of such NET SALES [***]. For clarity, the
ROYALTY RATE shall be applied to the aggregate annual worldwide NET SALES of all
COMMERCIAL PRODUCTS, and [***]. By way of example but not limitation, if during any
one calendar year, there are two (2) COMMERCIAL PRODUCTS being sold by or on behalf
of BAXTER or its AFFILIATES or SUBLICENSEES, and NET SALES of one COMMERCIAL
PRODUCT sold in such calendar year are [***], and NET SALES of the other
COMMERCIAL PRODUCT sold in the same calendar year are [***] then, for the purposes
hereof, the aggregate annual NET SALES of all COMMERCIAL PRODUCTS will be deemed to
be [***] for such calendar year, and BAXTER shall pay to NEKTAR AL a royalty of
[***] on the [***] of such NET SALES, [***] on the portion of such NET SALES
between [***] and [***], and [***] on the portion of such NET SALES in excess of
[***], for total payments by BAXTER of [***].


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


13









 






	 	1.71	 	“SCIENTIFIC ADVISORS” has the meaning set forth in Section 3.1.







	 	1.72	 	“SCIENTIFIC AND TECHNICAL ADVISORY BOARD” means the board described in Section
3.1.







	 	1.73	 	“SELECTED REAGENT” means a REAGENT that is attached to a THERAPEUTIC AGENT by
means of PEGYLATION in a POTENTIAL PRODUCT or COMMERCIAL PRODUCT, as selected by the
RESEARCH COMMITTEE.

	 
	 	1.74	 	“SOLE INVENTION” has the meaning set forth in Section 16.3.







	 	1.75	 	“SPECIFICATIONS” means the specifications for a SELECTED REAGENT to be used in
a POTENTIAL PRODUCT or COMMERCIAL PRODUCT determined based upon definitive testing
criteria that are agreed in writing by the DEVELOPMENT AND PRODUCTION COMMITTEE and
which will be set forth in the applicable QUALITY AGREEMENT.







	 	1.76	 	“SUBLICENSEE” means any person or entity, including AFFILIATES, to which BAXTER
grants a sublicense (i) to research and/or develop POTENTIAL PRODUCTS or COMMERCIAL
PRODUCTS or (ii) to make, have made, use, sell, have sold, offer for sale and/or import
POTENTIAL PRODUCTS or COMMERCIAL PRODUCTS (which for the purposes hereof will include
the right to
distribute, market or promote).





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


14









 











	 	1.77	 	“SUPPLY AGREEMENT” means the supply agreement to be entered into by the PARTIES
in accordance with Section 5.3.

	 
	 	1.78	 	“TERM” has the meaning set forth in Section 19.1.

	 
	 	1.79	 	“TERRITORY” means the world.







	 	1.80	 	“THERAPEUTIC AGENT” means [***] FACTOR VIII [***] of each of the foregoing. For
clarity, THERAPEUTIC AGENT does not include [***].







	 	1.81	 	“THIRD PARTY” means any entity other than NEKTAR AL, BAXTER, a SUBLICENSEE of
BAXTER or their respective AFFILIATES, whether such THIRD PARTY is a person, company,
corporation, limited liability company, partnership or other such legal entity, or a
division or operating or business unit of such legal entity.







	 	1.82	 	“VALID PATENT CLAIM” means a claim of an issued and unexpired PATENT within the
[***] covering the manufacture, use, sale, offer for sale or import of a SELECTED
REAGENT or a COMMERCIAL PRODUCT, which PATENT is owned or CONTROLLED by NEKTAR AL or
jointly by the PARTIES and has not (a) expired or been canceled, (b) been declared
invalid by an unreversed and unappealable decision of a court or other appropriate body
of competent jurisdiction, (c) been admitted to be invalid or unenforceable through
reissue, disclaimer, or otherwise or (d) been abandoned.







	 	1.83	 	[***] means the [***].





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


15









 






	2.	 	RESEARCH AND DEVELOPMENT ACTIVITIES







	 	2.1	 	OVERVIEW. The PARTIES’ research and development responsibilities are
set forth in the RESEARCH PLAN, which shall be an evolving document that is updated and
revised from time to time in writing by the RESEARCH COMMITTEE.







As decided by the RESEARCH COMMITTEE provided for in Section 3.2, and provided that
BAXTER provides NEKTAR AL with [***] in a timely manner in accordance with the time
frames set forth in the RESEARCH PLAN as provided for herein, NEKTAR AL shall, in a
timely manner in accordance with the time frames set forth in the RESEARCH PLAN,
provide BAXTER with [***] in its research and development activities to extend the
half-life of FACTOR VIII using PEGYLATION directly with FACTOR VIII [***]. BAXTER
shall, in a timely manner in accordance with the time frames set forth in the
RESEARCH PLAN, provide NEKTAR AL with [***] to use in developing REAGENTS and
CONJUGATES.




NEKTAR AL shall use commercially reasonable efforts to collaborate and cooperate
with BAXTER in researching and developing CONJUGATES and REAGENTS (including
SELECTED REAGENTS) to be utilized in developing POTENTIAL PRODUCTS pursuant to the
RESEARCH PLAN, as amended from time to time. [***] After the RESEARCH COMMITTEE
selects one or more CONJUGATES to develop into POTENTIAL PRODUCTS, the REAGENT that
is used to make each such CONJUGATE shall be deemed a SELECTED REAGENT hereunder,
and [***].




[***], in accordance with the RESEARCH PLAN, and for all costs and expenses
associated therewith (subject to the approval requirements set forth herein).




For clarity, [***]. During such clinical trials, or in the event of the
cancellation or failure of any such clinical trials, [***], in accordance with
Section 3.2.


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	2.2	 	NEKTAR AL PAYMENTS. In addition to the MILESTONES and royalties to be
paid by BAXTER to NEKTAR AL hereunder, BAXTER shall pay NEKTAR AL for all [***]
directly incurred and solely associated with the development and manufacture of such
CONJUGATES and REAGENTS (including SELECTED REAGENTS). NEKTAR AL’s [***], subject to
the following increases: NEKTAR AL shall adjust the [***] for each calendar year
commencing with the year 2006 to reflect any year-to-year increase in the Consumer
Price Index (CPI) (based on a cumulative index of CPI numbers starting on the EFFECTIVE
DATE to the date of the calculation of such [***]).







[***], which materials shall be equipment purchased by NEKTAR AL that is required
for the performance of its activities under the RESEARCH PLAN. The cost of such
additional materials shall not exceed [***]. BAXTER shall respond to such a request
by NEKTAR AL promptly, and in no event later than thirty (30) days after its receipt
of such request.




NEKTAR AL shall not bill BAXTER, and BAXTER shall not be required to pay NEKTAR AL,
for the first [***] expended by NEKTAR AL in performing activities under the
RESEARCH PLAN.




NEKTAR AL shall invoice such [***] to BAXTER on a [***], pursuant to Section 10.2.
For clarity, BAXTER shall pay for [***], which shall be calculated by multiplying
(i) [***] pursuant to this AGREEMENT by (ii) the quotient of (a) the [***] divided
by (b) [***]. BAXTER shall pay the amounts set forth in each such invoice within
[***] after the date thereof.




For clarity, BAXTER shall pay NEKTAR AL as provided for under this Section 2.2 for
so long as NEKTAR AL is performing activities under the RESEARCH PLAN; provided,
however, that on a POTENTIAL PRODUCT-by-POTENTIAL PRODUCT
basis, [***] and, thereafter, the costs and expenses to be paid by [***].


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	2.3	 	MARKETING AUTHORIZATION. As between the PARTIES, BAXTER shall be
responsible for all development activities under the RESEARCH PLAN, all manufacturing
activities associated with the manufacture of POTENTIAL PRODUCTS and COMMERCIAL
PRODUCTS, all activities associated with the [***], and for the [***] for COMMERCIAL
PRODUCTS. [***].







	 	2.4	 	MATERIALS.







	 	2.4.1	 	NEKTAR AL MATERIALS. Any samples of SELECTED REAGENTS
or CONJUGATES that are provided by NEKTAR AL to BAXTER in the course of the
RESEARCH PLAN (collectively, the “NEKTAR AL MATERIALS”) are owned exclusively
by NEKTAR AL and provided solely for the performance of the RESEARCH PLAN, or
to otherwise extend the half-life of a THERAPEUTIC AGENT, and for no other
purpose. Without limitation, BAXTER will not:







	 	(i)	 	[***];

	 
	 	(ii)	 	[***];

	 
	 	(iii)	 	[***];

	 
	 	(iv)	 	[***];







	 	(v)	 	[***],





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


18









 






except in each case, to extend the half-life of a THERAPEUTIC AGENT or otherwise in
conjunction with the RESEARCH PLAN. For clarity, BAXTER understands and agrees that
any activities (and the results thereof) that are carried out
by or on behalf of BAXTER outside of the RESEARCH PLAN, which utilize any NEKTAR AL
MATERIALS or CONFIDENTIAL INFORMATION of NEKTAR AL (including those activities to
extend the half-life of a THERAPEUTIC AGENT utilizing any NEKTAR AL MATERIALS or
any CONFIDENTIAL INFORMATION OF NEKTAR AL), are subject to and governed by the
terms and conditions of this AGREEMENT. For avoidance of doubt, [***].




	 	2.4.2	 	BAXTER MATERIALS. Any samples of [***] FACTOR VIII
[***] provided by BAXTER to NEKTAR AL (collectively, the “BAXTER MATERIALS”)
are owned exclusively by BAXTER and provided solely for the development of
CONJUGATES and REAGENTS to extend the half-life of a THERAPEUTIC AGENT in
conjunction with the RESEARCH PLAN, and for no other purpose. Without
limitation, NEKTAR AL will not:







	 	(i)	 	[***];

	 
	 	(ii)	 	[***];

	 
	 	(iii)	 	[***];

	 
	 	(iv)	 	[***]; or







	 	(v)	 	[***],







except in each case, to extend the half-life of a THERAPEUTIC AGENT in conjunction
with the RESEARCH PLAN.


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


19









 






	 	2.5	 	HANDLING. The PARTIES understand and agree the BAXTER MATERIALS and
NEKTAR AL MATERIALS may have unpredictable and unknown biological and/or chemical
properties and that they are to be handled and used with caution. The
PARTIES will handle and use such materials and conduct their respective activities
under the RESEARCH PLAN in compliance with all applicable LAWS. Each PARTY will
maintain reasonable security measures, no less strict than it maintains to protect
its own valuable tangible property, to protect the other PARTY’S materials against
loss, theft or destruction. Other than in connection with the performance of its
obligations under this AGREEMENT, neither PARTY will sell, lease, license, copy,
transfer, disclose or otherwise provide access to the other PARTY’s materials to
any person, entity or location without the prior written consent of the other
PARTY, such consent not to be unreasonably withheld or delayed. This provision
shall not prevent BAXTER from sublicensing (to the extent provided for in Article
4) or outsourcing some or all if its research or development activities. In such
case, BAXTER shall require any SUBLICENSEE or THIRD PARTY performing such
obligations to be bound by similar security, handling, confidentiality and
assignment of INVENTIONS obligations as are set forth in this AGREEMENT, including
without limitation, under Sections 2.4.1, 2.5 and 4.4 and Articles 11 and 16.







	 	2.6	 	SELECTION OF POTENTIAL PRODUCTS AND [***]. The RESEARCH COMMITTEE shall
select POTENTIAL PRODUCT(S) from the CONJUGATES and SELECTED REAGENTS provided by
NEKTAR AL and, following such selection, [***].







	 	2.7	 	DISCLAIMER OF WARRANTY WITH RESPECT TO BAXTER MATERIALS. BAXTER HEREBY
ACKNOWLEDGES THE EXPERIMENTAL NATURE OF THE RESEARCH AND THAT NEKTAR AL CANNOT
GUARANTEE OR PROVIDE ANY WARRANTIES REGARDING THE QUANTITY OF BAXTER MATERIALS
REQUIRED TO CONDUCT THE RESEARCH OR TO BE CONSUMED IN THE PERFORMANCE OF THE RESEARCH.
EXCEPT IN THE CASE OF NEKTAR AL’S NEGLIGENCE OR WILLFUL MISCONDUCT,
NEKTAR AL SHALL NOT BE LIABLE FOR ANY DAMAGES OR LOSSES SUFFERED BY BAXTER ARISING
FROM THE USE, CONSUMPTION OR LOSS OF BAXTER MATERIALS IN THE PERFORMANCE OF THE
RESEARCH PURSUANT TO THIS AGREEMENT.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	3.	 	GOVERNANCE







	 	3.1	 	JOINT STEERING COMMITTEE. To facilitate communication between the
PARTIES, implement the RESEARCH PLAN and oversee development of POTENTIAL PRODUCTS and
COMMERCIAL PRODUCTS (all during the TERM), the PARTIES shall appoint a JOINT STEERING
COMMITTEE consisting of [***] representatives from each of NEKTAR AL and BAXTER. The
initial representatives are:







	 	 	 	BAXTER: [***]

	 
	 	 	 	NEKTAR AL: [***]







and the initial meeting of the JOINT STEERING COMMITTEE shall take place no later
than [***] after the EFFECTIVE DATE. Each PARTY may replace its representatives on
the JOINT STEERING COMMITTEE by prior written notice to the other PARTY. The JOINT
STEERING COMMITTEE shall supervise the activities of the RESEARCH COMMITTEE and the
DEVELOPMENT AND PRODUCTION COMMITTEE; resolve issues referred by members of the
RESEARCH COMMITTEE and the DEVELOPMENT AND PRODUCTION COMMITTEE; make strategic
decisions related to research and development activities in connection with
POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS; review the progress of research and
development activities in connection with POTENTIAL PRODUCTS and COMMERCIAL
PRODUCTS with

respect to BAXTER’s progress in pre-clinical studies, clinical trials, and meeting
the Development Diligence Timeline set forth in Schedule IV; and review progress in
seeking MARKETING AUTHORIZATIONS. The JOINT STEERING COMMITTEE shall also be
responsible for sharing certain data and information relating to the PARTIES’
respective research and development, manufacturing and commercialization activities
in connection with the POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS, which data and
information shall include, without limitation, the following: (i) any delays in
meeting the Development Diligence milestone dates set forth in Schedule IV; (ii)
any failure in any pre-clinical or clinical trials; (iii) any termination of active
development of any POTENTIAL PRODUCT or SELECTED REAGENT; (iv) commencing any
clinical trial and completing any clinical trial; and (v) summary data
demonstrating whether the milestone success criteria set forth in Schedule II
(including endpoints) have been met. [***].




 





	 	 	 
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the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


21









 







The JOINT STEERING COMMITTEE shall meet at such times and places, in person or by
telephone conferencing, web-conferencing, video conferencing or other electronic
communication, as it shall determine to carry out its responsibilities. The JOINT
STEERING COMMITTEE shall operate [***]. If a dispute arises regarding matters within
the scope of responsibilities of the JOINT STEERING COMMITTEE (other than disputes
referred to the JOINT STEERING COMMITTEE by the RESEARCH COMMITTEE for resolution in
accordance with Section 3.2), and the JOINT STEERING COMMITTEE fails to reach a
consensus on its resolution [***], then the dispute shall be referred to the senior
management representatives of each PARTY. For purposes of the JOINT STEERING
COMMITTEE, BAXTER’S senior management representative shall be its [***].




The PARTIES to the JOINT STEERING COMMITTEE shall create a SCIENTIFIC AND TECHNICAL
ADVISORY BOARD for the purpose of reviewing results and
decisions occurring from the development of a POTENTIAL PRODUCT. The SCIENTIFIC AND
TECHNICAL ADVISORY BOARD shall consist of [***]. The SCIENTIFIC AND TECHNICAL
ADVISORY BOARD should bring their expertise to support matters referred to it by
the RESEARCH COMMITTEE or the DEVELOPMENT AND PRODUCTION COMMITTEE. Any
representative on the RESEARCH COMMITTEE or the DEVELOPMENT AND PRODUCTION
COMMITTEE may refer matters to the SCIENTIFIC AND TECHNICAL ADVISORY BOARD for its
input and advice. The input and advice of the SCIENTIFIC AND TECHNICAL ADVISORY
BOARD shall be for informational purposes only and shall not be binding on the
PARTIES.



 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	3.2	 	RESEARCH COMMITTEE. The RESEARCH COMMITTEE shall be comprised of
appropriate representatives of both PARTIES, initially consisting of [***]
representatives from each of NEKTAR AL and BAXTER. Each PARTY shall appoint a RESEARCH
PLAN team leader (and other key contacts, as necessary) to serve as principal RESEARCH
COMMITTEE liaisons for the PARTIES. Employees of each PARTY who are not on the
RESEARCH COMMITTEE may attend meetings of the RESEARCH COMMITTEE, as required to
further the research and development of POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS.
The initial team leader and PARTY representatives are:







BAXTER: (1) [***]




NEKTAR AL: (1) [***]




Any representative of the RESEARCH COMMITTEE may designate another individual from
such representative’s PARTY to attend a meeting of the RESEARCH COMMITTEE in his or
her place. In such case, the representative shall notify the other PARTY’s
representative in writing prior to the applicable meeting.




The RESEARCH COMMITTEE shall plan and manage the research and development
activities to be conducted in connection with CONJUGATES, POTENTIAL PRODUCTS and
COMMERCIAL PRODUCTS and to facilitate communication on research and development
issues between the PARTIES. The RESEARCH COMMITTEE shall also be responsible for
the sharing of certain data relating to the PARTIES’ respective research and
development activities in connection with the RESEARCH PLAN and data related to
CONJUGATES and POTENTIAL PRODUCTS, including the results [***].




 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





       


23









 






Modification to, and implementation of, the RESEARCH PLAN and other day-to-day
research and development activities shall be managed by the RESEARCH COMMITTEE,
subject to oversight by the JOINT STEERING COMMITTEE. The RESEARCH COMMITTEE shall
meet no less frequently than [***] in person, by teleconference, web-conference or
video conference as agreed upon by the PARTIES.




Notwithstanding anything herein to the contrary, the RESEARCH COMMITTEE shall
operate by consensus with representatives of NEKTAR AL having [***] and
representatives of BAXTER having [***]. In the event of any disagreements between
the PARTIES’ representatives at the RESEARCH COMMITTEE level (including, without
limitation, with respect to selection of a SELECTED REAGENT), the disagreement shall
be referred to the JOINT STEERING COMMITTEE for resolution and, if the JOINT
STEERING COMMITTEE is unable to resolve the disagreement within [***] after the
matter is referred to the JOINT STEERING COMMITTEE, [***].




In order to enable NEKTAR AL to plan its [***] beyond those already contemplated by
the RESEARCH PLAN, the RESEARCH COMMITTEE shall notify NEKTAR AL in writing no less
than [***] in advance of any additional requirements for
REAGENTS (including SELECTED REAGENTS) and CONJUGATES that are to be developed under
the RESEARCH PLAN, or the conduct of studies or the performance of other related
services under the RESEARCH PLAN.


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	3.3	 	DEVELOPMENT AND PRODUCTION COMMITTEE. Within [***] after a POTENTIAL PRODUCT has been
selected by the RESEARCH COMMITTEE, the JOINT STEERING COMMITTEE shall appoint a DEVELOPMENT AND
PRODUCTION COMMITTEE to plan and manage the manufacturing and supply activities to be performed
under this AGREEMENT with respect to the SELECTED REAGENT for such POTENTIAL PRODUCT, and
facilitate communication between the PARTIES during such time as NEKTAR AL supplies BAXTER with
such SELECTED REAGENT hereunder. The
DEVELOPMENT AND PRODUCTION COMMITTEE shall be responsible for discussing in good faith and
agreeing on issues relating to forecasting and contingency planning. The DEVELOPMENT
AND PRODUCTION COMMITTEE shall operate by consensus with representatives of NEKTAR AL
having [***] and representatives of BAXTER having [***]. In the event of any
disagreements between the PARTIES’ representatives at the DEVELOPMENT AND PRODUCTION
COMMITTEE level, the disagreement shall first be referred to the JOINT STEERING
COMMITTEE for resolution. If the disagreement is not resolved by the JOINT STEERING
COMMITTEE within [***] after the matter is referred to it for resolution, then the
matter shall be referred to the senior management representatives of each PARTY for
resolution, which senior management representatives shall be for Baxter [***] and for
Nektar AL [***].







	 	3.4	 	AMENDMENT; WAIVER. Notwithstanding anything to the contrary herein,
neither the JOINT STEERING COMMITTEE, the RESEARCH COMMITTEE nor the DEVELOPMENT AND
PRODUCTION COMMITTEE shall have the right or
power to amend the terms of this AGREEMENT or waive rights or obligations of the
PARTIES hereunder, or take any action that would conflict with any provision of
this AGREEMENT, the SUPPLY AGREEMENT or a QUALITY AGREEMENT.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	4.	 	LICENSES TO NEKTAR AL LICENSED TECHNOLOGY AND BAXTER TECHNOLOGY







	 	4.1	 	LICENSE TO BAXTER. Subject to the terms and conditions of this
AGREEMENT, NEKTAR AL hereby grants to BAXTER a worldwide, exclusive, royalty-bearing
license, with the right to grant sublicenses as provided in Section 4.2, under the
NEKTAR AL LICENSED TECHNOLOGY to develop, make, have made, import, export, use, sell,
offer for sale and have sold POTENTIAL PRODUCTS and COMMERCIAL PRODUCT(S) in the
FIELD. For clarity, [***].







	 	4.2	 	TERMS OF SUBLICENSE. The terms of each sublicense under the license
granted to BAXTER in Section 4.1 of this AGREEMENT shall provide that any SUBLICENSEE
shall be subject to and consistent with the terms and conditions of this AGREEMENT;
provided, however, that:







	 	(i)	 	All royalties or other amounts due to NEKTAR AL with respect
to such SUBLICENSEE’S development and/or commercialization of POTENTIAL
PRODUCT or COMMERCIAL PRODUCT shall be collected by BAXTER and transmitted to
NEKTAR AL in accordance with the payment terms set forth in Article 9;







	 	(ii)	 	BAXTER’S grant of any sublicense shall not relieve BAXTER from
any of its obligations under this AGREEMENT; and







	 	(iii)	 	BAXTER shall remain jointly and severally liable for any
breach of a
sublicense by a SUBLICENSEE.







Notwithstanding the foregoing, [***].


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	4.3	 	NEKTAR AL RESEARCH RIGHTS AND LIMITATIONS. Notwithstanding anything to
the contrary in this AGREEMENT and without limiting any other retained rights, the
license granted under Section 4.1 shall be subject to the retained right of NEKTAR AL
and its AFFILIATES:







	 	(i)	 	to practice the NEKTAR AL LICENSED TECHNOLOGY for the conduct
of research and development of products that it is developing itself;







	 	(ii)	 	to practice the NEKTAR AL LICENSED TECHNOLOGY for any
purposes, including the research, development, manufacture and
commercialization of products, whether itself or with or for others, outside
of the FIELD;







	 	(iii)	 	to sell REAGENTS (including SELECTED REAGENTS) through NEKTAR
AL’S “catalog” for research purposes (subject to the limitations set forth
below); and







	 	(iv)	 	to perform their respective obligations to THIRD PARTIES set
forth in agreements existing as of the EFFECTIVE DATE, [***].







NEKTAR AL covenants that during the TERM, [***]. NEKTAR AL further covenants that
during the TERM, [***].




NEKTAR AL covenants that during the TERM, [***]. BAXTER understands and agrees that
neither NEKTAR AL nor its AFFILIATES will have an obligation to [***].




For clarification, nothing in this Agreement, including any retained rights of
NEKTAR AL and its AFFILIATES, grants NEKTAR AL or its AFFILIATES any rights under
BAXTER PATENT RIGHTS, [***], other than for the purposes of performing any
obligations under this AGREEMENT, including, without limitation, NEKTAR AL’s
obligations under the RESEARCH PLAN, for the research and development for BAXTER of
CONJUGATES, POTENTIAL PRODUCTS OR COMMERCIAL PRODUCTS.


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	4.4	 	NO IMPLIED RIGHTS OR LICENSES. Neither PARTY grants to the other any
rights or licenses, including to any BAXTER PATENT RIGHTS or BAXTER KNOW HOW, or NEKTAR
AL PATENT RIGHTS or NEKTAR AL KNOW HOW or other intellectual property rights, whether
by implication, estoppel or otherwise, except to the extent expressly provided for
under this AGREEMENT. Other than as expressly provided for herein, neither BAXTER nor
its AFFILIATES, SUBLICENSEES or its or their contractors, may [***].







	 	4.5	 	LICENSE TO NEKTAR AL. BAXTER hereby grants to NEKTAR AL a
non-exclusive, non-sublicensable, non-assignable, non-transferable, worldwide,
royalty-free license, under BAXTER KNOW-HOW and BAXTER PATENT RIGHTS, and the NEKTAR AL
LICENSED TECHNOLOGY that is licensed exclusively to BAXTER hereunder, for the sole
purpose of performing NEKTAR AL’s obligations under this AGREEMENT, including the
RESEARCH PLAN. This provision shall not prevent NEKTAR AL from [***]. BAXTER shall
respond within [***] of receipt of such a request by NEKTAR AL. [***].







	 	4.6	 	MUTUAL COVENANT. Each PARTY covenants and agrees that it and its
AFFILIATES shall not use or practice the intellectual property rights licensed under
this AGREEMENT except as expressly permitted by this AGREEMENT. Any use or practice of
the intellectual property rights licensed under this AGREEMENT except
as expressly permitted by this AGREEMENT that results in material harm to the other
PARTY shall constitute a material breach of this AGREEMENT. Each PARTY covenants and
agrees to cease any non-permitted use and to take all actions necessary to assign to
the other PARTY any inventions made through use or practice of such PARTY’S
intellectual property rights outside the scope of the license rights granted
hereunder.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	5.	 	MANUFACTURE AND SUPPLY OF SELECTED REAGENTS







	 	5.1	 	[***]. NEKTAR AL shall manufacture and supply and BAXTER shall purchase from
NEKTAR AL, [***] of BAXTER’S and BAXTER’S AFFILIATES’ and SUBLICENSEES’ requirements
of SELECTED REAGENTS, for the sole purpose of developing and manufacturing POTENTIAL
PRODUCTS and COMMERCIAL PRODUCTS pursuant to the license granted hereunder.







	 	5.2	 	SUPPLY PRIOR TO PIVOTAL TRIAL/SUPPLY AGREEMENT.







	 	(i)	 	FORECAST. No later than [***] after selection of a
POTENTIAL PRODUCT by the RESEARCH COMMITTEE, BAXTER shall provide NEKTAR AL
with a [***] rolling forecast of its estimated requirements of the SELECTED
REAGENT for such POTENTIAL PRODUCT for research, pre-clinical development and
clinical development. BAXTER shall update such estimated forecast within
thirty (30) days following the start of each calendar quarter. BAXTER shall
issue purchase orders to NEKTAR AL [***] prior to the start of the calendar
quarter (such time period to be negotiated by the PARTIES in good faith after
the applicable SELECTED REAGENT is selected by the RESEARCH COMMITTEE) during
which BAXTER wishes to receive supplies of SELECTED REAGENT for use in
pre-clinical and Phase 1 and Phase 2 clinical development, until such time as
the PARTIES execute the SUPPLY AGREEMENT.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	(ii)	 	PRICE. The price of each SELECTED REAGENT shall be the
PURCHASE PRICE, as set forth in Section 8.6.1.







	 	(iii)	 	DELIVERY AND SHIPMENT; TITLE AND RISK OF LOSS. NEKTAR
AL shall deliver all SELECTED REAGENT to BAXTER, and [***].







	 	5.3	 	PIVOTAL TRIAL AND COMMERCIAL PRODUCT SUPPLY AGREEMENT. At least [***]
prior to the anticipated date of commencement of the first PIVOTAL TRIAL for a
POTENTIAL PRODUCT, the parties shall negotiate and execute a SUPPLY AGREEMENT for the
manufacture and supply of SELECTED REAGENT for such POTENTIAL PRODUCT. The SUPPLY
AGREEMENT shall be negotiated in good faith after the PARTIES have gained insight into
the attributes of the SELECTED REAGENT, including quality requirements, testing
requirements, production cycles and production costs. For purposes of this AGREEMENT,
commencement of a clinical trial shall be deemed to occur on the date on which
POTENTIAL PRODUCT is first administered to the first patient or subject in such trial.







The SUPPLY AGREEMENT shall include the essential terms and conditions set forth in
Schedule V and such other terms and conditions that are usual and customary for
agreements of this type.


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	6.	 	SPECIFICATIONS AND MANUFACTURING WARRANTY FOR SELECTED REAGENTS







	 	6.1	 	SPECIFICATIONS. The SPECIFICATIONS for SELECTED REAGENTS to be supplied
pursuant to Article 5 will be set forth in the applicable QUALITY
AGREEMENT. Any modifications of the SPECIFICATIONS shall require prior written
approval of BAXTER and NEKTAR AL, not to be unreasonably withheld or delayed. Prior
to entering into the SUPPLY AGREEMENT, BAXTER shall reimburse NEKTAR AL for its
reasonable costs associated with implementing any agreed upon modifications to the
SPECIFICATIONS, including without limitation any increases in MANUFACTURING COSTS.
NEKTAR AL shall be responsible for any changes to SPECIFICATIONS initiated by NEKTAR
AL to accommodate its business needs that do not directly relate to the development
or improvement of SELECTED REAGENTS. For clarity, a change in regulatory
requirements that is unique to a SELECTED REAGENT is not a NEKTAR AL business need.
For example, if NEKTAR AL requests relocating the SELECTED REAGENT manufacturing
operations from Alabama to California to accommodate the closure of its Alabama
facility, NEKTAR AL shall be responsible for all costs related to such relocation.







	 	6.2	 	COMPLIANCE AUDITS. BAXTER will have the right to perform
compliance/quality audits, as set forth in the QUALITY AGREEMENTS.







	 	6.3	 	WARRANTY. NEKTAR AL warrants that each shipment of SELECTED REAGENT
shall, upon delivery, be in compliance/conformity with:







	 	(i)	 	All applicable SPECIFICATIONS,

	 
	 	(ii)	 	The applicable QUALITY AGREEMENT, and







	 	(iii)	 	ICH Q7A GUIDELINES and LAWS, as they apply to critical raw
materials, in each case with respect to those SELECTED REAGENTS used in the
manufacture of (a) POTENTIAL PRODUCTS for human clinical trials and (b) for
COMMERCIAL PRODUCTS.







SELECTED REAGENTS that do not meet the foregoing warranties shall be deemed
“NONCONFORMING REAGENTS” for the purposes hereof.


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	6.4	 	DISCLAIMER OF WARRANTY.







	 	6.4.1	 	EXCEPT AS PROVIDED IN SECTION 6.3, NEKTAR AL PROVIDES NO
WARRANTIES, EXPRESS OR IMPLIED, REGARDING ANY SELECTED REAGENT, POTENTIAL
PRODUCT OR COMMERCIAL PRODUCT, OR NEKTAR AL LICENSED TECHNOLOGY, AND HEREBY
DISCLAIMS ALL OTHER WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT. BAXTER ACKNOWLEDGES THAT NEKTAR AL CANNOT
GUARANTEE THE SAFETY, NON-TOXICITY, FITNESS OR EFFICACY OF SELECTED REAGENTS,
POTENTIAL PRODUCTS OR COMMERCIAL PRODUCTS, AND BAXTER ACCEPTS ANY AND ALL RISK
RESULTING FROM ITS USE OF CONJUGATES, REAGENTS, SELECTED REAGENTS, POTENTIAL
PRODUCTS OR COMMERCIAL PRODUCTS.







	 	6.4.2	 	EXCEPT AS PROVIDED IN SECTION 6.3, NEITHER PARTY PROVIDES ANY
WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE RESEARCH PLAN OR ANY REAGENT,
CONJUGATE, PRODUCT (INCLUDING THE SUCCESSFUL DEVELOPMENT, REGISTRATION,
MANUFACTURE OR COMMERCIALIZATION OF ANY POTENTIAL PRODUCT) OR DELIVERABLE
PROVIDED PURSUANT TO THE RESEARCH PLAN, AND EACH PARTY DISCLAIMS ALL EXPRESS
AND IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION
THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
AND NON-INFRINGEMENT. FOR CLARITY, THE FOREGOING SHALL NOT DIMINISH NEKTAR
AL’S OBLIGATIONS PURSUANT TO SECTION 15.1.1.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	7.	 	EXCLUSIVITY; [***]







	 	7.1	 	NEKTAR AL. In consideration of the MILESTONES, royalties and other
consideration set forth herein, NEKTAR AL agrees to partner exclusively with BAXTER in
the FIELD. Specifically, during the TERM, other than as provided for in this AGREEMENT
or under the RESEARCH PLAN, [***].







Nothing set forth in this Section 7.1 shall prohibit NEKTAR AL from owning not in
excess of 5% in the aggregate of any class of capital stock of any corporation if
such stock is publicly traded and listed on any national or regional stock exchange
or on the NASDAQ national market system or the NASDAQ Small Cap Market.




	 	7.2	 	BAXTER. For good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged by BAXTER), BAXTER agrees to partner
exclusively with NEKTAR AL in the FIELD. Specifically, during the TERM, [***].







NEKTAR AL acknowledges that, [***].




Nothing set forth in this Section 7.2 shall prohibit BAXTER from owning not in
excess of 5% in the aggregate of any class of capital stock of any corporation if
such stock is publicly traded and listed on any national or regional stock exchange
or on the NASDAQ national market system or the NASDAQ Small Cap Market.




In the event that the provisions of Sections 7.1 or 7.2 should ever be deemed to
exceed the limitation provided by applicable law, then the PARTIES agree that such
provisions shall be reformed to set forth the maximum limitations permitted.


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	8.	 	QUALITY AND COMPLAINTS







	 	8.1	 	ANALYSIS. After the RESEARCH COMMITTEE’S designation of a POTENTIAL
PRODUCT or a SELECTED REAGENT, the PARTIES shall cooperate and work in good faith to
establish written evaluation procedures and evaluation time lines in which to analyze
shipments of SELECTED REAGENTS and verify SELECTED REAGENT quality (including meeting
SPECIFICATIONS) using methods consistent with test procedures set forth in the
applicable QUALITY AGREEMENT. In the event the PARTIES are not able to agree upon such
procedures and timelines within [***] prior to the first PHASE 1 CLINICAL TRIAL of such
POTENTIAL PRODUCT, (i) the matter shall first be referred to the DEVELOPMENT AND
PRODUCTION COMMITTEE for resolution in accordance with Section 3.3; (ii) if within
[***] the DEVELOPMENT AND PRODUCTION COMMITTEE is unable to reach resolution, either
PARTY may elect to have a mutually acceptable laboratory or consultant establish such
procedures and time lines, whose determination thereof shall be binding; and (iii) if
within [***] the PARTIES are unable to select a mutually acceptable laboratory or
consultant, each PARTY shall select an independent consultant within [***] and such
consultants shall within [***] thereof select a mutually acceptable laboratory or
consultant to establish such time lines and procedures, whose determination thereof
shall be binding.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	8.2	 	ACCEPTANCE AND REJECTION. BAXTER shall notify NEKTAR AL in writing if
BAXTER believes that a shipment of SELECTED REAGENT does not comply with the testing
criteria identified pursuant to Section 8.1 above within [***] after BAXTER’S receipt
of the relevant shipment of SELECTED REAGENT at BAXTER’S designated destination
facility (“NOTICE OF NON-CONFORMITY”),
which notice shall include the basis for its assertion of such noncompliance
(including, at NEKTAR AL’S request, supporting data) for purposes of consideration
and verification by NEKTAR AL. Unless otherwise set forth in the SUPPLY AGREEMENT
for the applicable SELECTED REAGENT, if no such written NOTICE OF NON-CONFORMITY is
received by NEKTAR AL within the above [***] period, BAXTER shall be deemed to have
accepted the applicable shipment of SELECTED REAGENT as meeting SPECIFICATIONS and
any other quality requirements which were verified using the agreed-upon evaluation
procedures set forth in the QUALITY AGREEMENT, which shall thereafter conclusively
be presumed to meet the SPECIFICATIONS and such quality requirements. If NEKTAR AL
receives such NOTICE OF NON-CONFORMITY within such [***] period, then NEKTAR AL will
evaluate BAXTER’S NOTICE OF NON-CONFORMITY within [***] of receipt thereof and
provide a written response (“RESPONSE TO NOTICE OF NON-CONFORMITY”). If NEKTAR AL
fails to provide to BAXTER a RESPONSE TO NOTICE OF NON-CONFORMITY within the [***]
period, then NEKTAR AL shall be deemed to have accepted BAXTER’S conclusion that the
SELECTED REAGENTS are non-conforming and waived its right to object to such
conclusion.







If NEKTAR AL disagrees with such NOTICE OF NON-CONFORMITY, then (i) the matter
shall first be referred to the DEVELOPMENT AND PRODUCTION COMMITTEE for resolution
in accordance with Section 3.3; (ii) if the DEVELOPMENT AND PRODUCTION COMMITTEE is
not able to agree on such matter within [***], SELECTED REAGENT samples or
documentation will be supplied to a mutually acceptable laboratory or consultant
for resolution, whose determination of conformity or non-conformity shall be
binding; provided that in the event the PARTIES do not select a mutually acceptable
laboratory or consultant
within [***], each PARTY shall select an independent testing consultant within
[***] and such consultants shall select a mutually acceptable or laboratory within
[***] thereof. If the SELECTED REAGENT is determined to be non-conforming, then
[***]. If the SELECTED REAGENT is determined to be conforming, then [***].


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	8.3	 	REPLACEMENT OF NONCONFORMING REAGENT. NEKTAR AL shall [***], supply
BAXTER with a replacement quantity of SELECTED REAGENT in an amount equal to that
which, pursuant to the agreed upon procedures set forth herein and in the applicable
QUALITY AGREEMENT, is determined to be NONCONFORMING REAGENT. [***], BAXTER shall
promptly return all NONCONFORMING REAGENT to NEKTAR AL. Unless otherwise specified in
the applicable SUPPLY AGREEMENT, such replacement shipment shall be made within a
reasonable period of time not to exceed [***], which period of time shall be agreed
upon once the “production cycle time” for the applicable SELECTED REAGENT has been
established.







	 	8.4	 	LIABILITY TO BAXTER FOR NONCONFORMING REAGENT.







	 	8.4.1	 	NONCONFORMING REAGENT DETECTABLE BY TESTING. With
respect to SELECTED REAGENT that was determined to be NONCONFORMING REAGENT
through testing in accordance with the agreed-upon evaluation procedures for
the applicable SELECTED REAGENT established pursuant to Section 8.1 and the
applicable QUALITY AGREEMENT and for which BAXTER gave to NEKTAR AL a NOTICE
OF NONCONFORMITY in accordance with the requirements of Section 8.2, [***].
For clarity, if BAXTER does not comply with the procedures set forth in
Section 8.2 with respect to SELECTED REAGENT and BAXTER could
reasonably have detected that such SELECTED REAGENT was NONCONFORMING
REAGENT through testing in accordance with the agreed-upon evaluation
procedures for the applicable SELECTED REAGENT established pursuant to
Section 8.1 and the applicable QUALITY AGREEMENT, or if BAXTER otherwise
failed to comply with the notice requirements in Section 8.2 for
NONCONFORMING REAGENT, [***].





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	8.4.2	 	NONCONFORMING REAGENT NOT DETECTABLE BY TESTING. With
respect to (a) NEKTAR AL’S negligence or willful misconduct regarding SELECTED
REAGENT or (b) SELECTED REAGENT that is NONCONFORMING REAGENT because of
breaches of the warranties set forth in Sections 6.3(ii) or (iii) that could
not reasonably have been detected through testing in accordance with the
agreed-upon evaluation procedures for the applicable SELECTED REAGENT
established pursuant to Section 8.1 and the applicable QUALITY AGREEMENT,
[***].







	 	8.5	 	[INTENTIONALLY OMITTED.]







	 	8.6	 	FEES FOR MANUFACTURING AND SUPPLY OF SELECTED REAGENTS PRIOR TO
PIVOTAL TRIAL.







	 	8.6.1	 	From the date of selection of SELECTED REAGENT until the
earlier of the date of commencement of a PIVOTAL TRIAL or the date on which
the PARTIES enter into the SUPPLY AGREEMENT, BAXTER shall pay NEKTAR AL its
MANUFACTURING COST plus [***] for each SELECTED REAGENT supplied to BAXTER,
[***] (“PURCHASE PRICE”). BAXTER shall be entitled to audit such MANUFACTURING
COST pursuant to Section 10.2.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


37









 











	 	8.6.2	 	In addition to the PURCHASE PRICE, BAXTER shall [***] as
described herein. [***]. To the extent available, NEKTAR AL shall [***]:







	 	A.	 	[***];







	 	B.	 	[***];







	 	C.	 	[***];







	 	D.	 	[***].







	 	 	 	BAXTER [***] and NEKTAR AL shall provide invoices for such fees and
services, as incurred. BAXTER shall also reimburse NEKTAR AL for NEKTAR AL’S
reasonable pre-approved expenses incurred in connection with travel at
BAXTER’S request.







	 	 	 	BAXTER shall be entitled to audit such fees pursuant to Section 10.2.
However, NEKTAR AL shall not be required to produce records that are not
maintained in the normal course of business. For example, if NEKTAR AL
[***].







	 	8.6.3	 	BAXTER shall pay for or reimburse NEKTAR AL (as the case may
be) for such [***] services or expenses within [***] after the date of NEKTAR
AL’S invoice therefor. For clarity, BAXTER shall not be responsible for any
fees, services, or travel that: (i) expand NEKTAR AL’s capacity to develop or
produce PEG reagents for other customers; or (ii) do not directly or uniquely
relate to this AGREEMENT or otherwise directly benefit BAXTER.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	9.	 	MILESTONES; ROYALTY PAYMENTS; ROYALTY REPORTS







	 	9.1	 	MILESTONE PAYMENTS. BAXTER shall pay to NEKTAR AL MILESTONES in
accordance with and pursuant to the events described in Schedule II hereto for
POTENTIAL PRODUCT and/or COMMERCIAL PRODUCT, as the case may be. Each such MILESTONE
shall be payable at the time the corresponding event occurs, and due within [***] of
the event triggering such MILESTONE. All milestones payments shall not be advance
payments against any royalties or other payments due and payable hereunder, but
shall be in addition to any royalty or other payments due under this AGREEMENT. In
the event BAXTER [***].







	 	(i)	 	SKIPPED MILESTONE EVENT. If, for whatever reason, a
particular milestone activity or event for which a MILESTONE is due is not
carried out, then in such case the MILESTONE that NEKTAR AL would have received
upon the occurrence of such milestone event for the POTENTIAL PRODUCT or
COMMERCIAL PRODUCT had the particular milestone event been carried out shall be
paid [***]. For example, [***].

	 
	 	(ii)	 	[***].







	 	(iii)	 	NON-REFUNDABLE. Once a MILESTONE is due and payable
hereunder or once a MILESTONE is paid, BAXTER shall not have any basis for
claiming that such MILESTONE is not to be paid or is to be refunded (as the
case may be). This provision shall not preclude BAXTER from seeking to recover
damages from NEKTAR AL for the breach of this AGREEMENT.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	(iv)	 	MARKETING AUTHORIZATION OUTSIDE OF THE FIELD. For
clarity BAXTER shall have no rights whatsoever with respect to the development,
manufacture, use, sale or importation of POTENTIAL PRODUCTS or COMMERCIAL
PRODUCTS outside of the FIELD. For clarification, BAXTER [***]. If BAXTER
desires to develop, manufacture, have manufactured, use, sell, offer for sale
or import any POTENTIAL
PRODUCT or COMMERCIAL PRODUCT outside of the
FIELD, including without limitation obtaining MARKETING AUTHORIZATION for the
addition of label claims that are outside of the FIELD for then-existing
COMMERCIAL PRODUCT(S), BAXTER shall discuss the matter with NEKTAR AL. If
NEKTAR AL (in its discretion) wishes to grant such additional rights to
BAXTER, the PARTIES shall negotiate in good faith the terms and conditions
(which may include, among other things, the payment of additional milestone
payments) applicable to the grant of such rights.










	 	9.1.1	 	[***] MILESTONES FOR THE DEVELOPMENT AND
COMMERCIALIZATION OF ONE COMMERCIAL PRODUCT FOR THE TREATMENT OF
HEMOPHILIA A. The MILESTONES that are provided for under Schedule II shall
apply with respect to the first POTENTIAL PRODUCT being developed for the
treatment of Hemophilia A that achieves each such MILESTONE, and the first
COMMERCIAL PRODUCT receiving MARKETING AUTHORIZATION having a label indication
for the treatment of Hemophilia A. Such POTENTIAL PRODUCT and COMMERCIAL
PRODUCT may be the same, but in the event they are not, [***].

	 
	 	 	 	For clarity, BAXTER or its AFFILIATE or SUBLICENSEE, at BAXTER’S discretion,
shall be [***]. In the event BAXTER or its AFFILIATE or SUBLICENSEE [***].

	 
	 	 	 	For example, [***], BAXTER shall [***].

	 
	 	 	 	NEKTAR AL shall not be entitled to additional MILESTONES for additional label claims that are obtained by BAXTER or its AFFILIATE or SUBLICENSEE for
then-existing COMMERCIAL PRODUCT(S) for the treatment of Hemophilia A. For
example, [***].





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	9.1.2	 	ADDITIONAL MILESTONES FOR THE COMMERCIALIZATION OF
MORE THAN ONE COMMERCIAL PRODUCT FOR THE TREATMENT OF HEMOPHILIA
A. After the receipt of MARKETING AUTHORIZATION for the first COMMERCIAL
PRODUCT, NEKTAR AL shall be entitled to receive milestone payments in addition
to the MILESTONES provided for in Schedule II, for each additional POTENTIAL
PRODUCT with a label indication for the treatment of Hemophilia A, for which
BAXTER or its AFFILIATE or SUBLICENSEE receives a new MARKETING AUTHORIZATION
in the United States and/or European Union. With respect to any additional
POTENTIAL PRODUCTS [***]. The amounts of such payments will be negotiated by
the PARTIES in good faith and agreed upon in a formal written amendment hereto
[***], provided that the additional milestone payments for each such additional
POTENTIAL PRODUCT [***].

	 
	 	 	 	For clarity, [***].







	 	9.1.3	 	POTENTIAL PRODUCTS FOR [***]. If BAXTER elects to
develop a POTENTIAL PRODUCT to treat [***], BAXTER shall pay to NEKTAR AL
milestone payments in addition to the MILESTONES that are set forth in
Schedule II, which additional milestone payments will be negotiated by the
PARTIES in good faith and agreed upon in a formal written amendment hereto.
The additional milestone payments for such POTENTIAL PRODUCT to treat [***]
shall be agreed upon in advance but no later than
[***].





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	9.1.4	 	INDICATIONS FOR [***]. While NEKTAR AL shall not be
entitled to additional milestone payments for additional label claims that are
obtained by BAXTER or its AFFILIATE or SUBLICENSEE for then-existing COMMERCIAL
PRODUCT(S) within the FIELD, if BAXTER or its AFFILIATE or SUBLICENSEE seeks to
obtain [***] are for a then-existing COMMERCIAL PRODUCT with a label indication
for the [***], then in such case, additional milestone payments shall be due.
The provisions of Section 9.1.2, as they pertain to [***], shall apply such
that clinical development of COMMERCIAL PRODUCT(S) associated with obtaining
label claims for the treatment of [***] shall be deemed to constitute
development of an additional POTENTIAL PRODUCT.







	 	9.2	 	ROYALTIES. BAXTER shall pay NEKTAR AL royalties in an amount equal to
the product of the ROYALTY RATE and the annual aggregate NET SALES of all COMMERCIAL
PRODUCTS on a COMMERCIAL PRODUCT-by-COMMERCIAL PRODUCT and country-by-country basis for
an initial period of ten (10) years from the FIRST COMMERCIAL SALE of the applicable
COMMERCIAL PRODUCT in the applicable country (the “INITIAL ROYALTY TERM”). Royalties
shall be paid during the INITIAL ROYALTY TERM in each and every country where
COMMERCIAL PRODUCT is sold, without regard to whether a VALID PATENT CLAIM covers the
manufacture, use, sale, offer for sale or import of the COMMERCIAL PRODUCT or the
SELECTED REAGENT contained in such COMMERCIAL PRODUCT.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	9.2.1	 	After the expiration of the INITIAL ROYALTY TERM for a
particular COMMERCIAL PRODUCT in a particular country, BAXTER shall
continue to pay such royalties on NET SALES of such COMMERCIAL PRODUCT on a
world-wide basis provided that there exists, in each of the following major
markets in which MARKETING AUTHORIZATION is received for such COMMERCIAL
PRODUCT, a VALID PATENT CLAIM which would be infringed by the making, using,
having made, offering for sale, sale or importation of such COMMERCIAL
PRODUCT or the SELECTED REAGENT contained in such COMMERCIAL PRODUCT: [***]
(collectively, “MAJOR MARKETS”). Such royalties shall be paid on NET SALES
of COMMERCIAL PRODUCTS in those countries where the manufacture, import,
use, offer for sale or sale of the applicable COMMERCIAL PRODUCT or the
SELECTED REAGENT contained in such COMMERCIAL PRODUCT is not covered by a
VALID PATENT CLAIM, provided that the manufacture, import, use, offer for
sale or sale of such applicable COMMERCIAL PRODUCT or such SELECTED REAGENT
is covered by a VALID PATENT CLAIM in each of the MAJOR MARKETS. [***].







	 	9.2.2	 	If, at the time of sale of a COMMERCIAL PRODUCT in a
particular country after the expiration of the INITIAL ROYALTY TERM in such
country, there is no VALID PATENT CLAIM covering the manufacture, use, import,
offer for sale or sale of such COMMERCIAL PRODUCT or the SELECTED REAGENT
contained in such COMMERCIAL PRODUCT in each of the MAJOR MARKETS, then BAXTER
shall only owe royalties with respect to NET SALES of COMMERCIAL PRODUCTS in
those countries in which a VALID PATENT CLAIM covers the manufacture, use,
import, offer for sale or sale of such COMMERCIAL PRODUCTS or the SELECTED
REAGENT contained in such COMMERCIAL PRODUCTS in such countries. For
example, after the expiration of the INITIAL ROYALTY TERM [***].





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	9.2.3	 	The PARTIES agree that a VALID PATENT CLAIM exists, for
purposes of determining whether royalties are payable after the expiration of
the INITIAL ROYALTY TERM, even if components of a COMMERCIAL PRODUCT are sold
separately as more fully described in Section 9.3 below, and the only VALID
PATENT CLAIM covers the manufacture, use, sale, offer for sale or import of
only one component of such COMMERCIAL PRODUCT ([***]).

	 
	 	9.2.4	 	BAXTER shall [***].







	 	9.2.5	 	Neither PARTY shall contest the accuracy of any royalty,
including the overpayment or underpayment of any royalty, after [***] from the
end of the calendar year in which such royalties are due and payable. For
clarity, prior to the expiration of such [***] period, BAXTER may allege the
overpayment of such royalties (and if determined that overpayment was made, be
entitled to a refund payable within [***] of NEKTAR AL’S receipt of an invoice
for the overpaid amount) and NEKTAR AL may allege the underpayment of
royalties (and if determined that underpayment was made, be entitled to such
shortfall). Thereafter, the accuracy of the payment of such royalties shall be
deemed conclusively binding.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	9.3	 	SEPARATE COMPONENTS. If components of a COMMERCIAL PRODUCT are sold
separately, the NET SALES of such COMMERCIAL PRODUCT shall be calculated as if the
components of the COMMERCIAL PRODUCT were not sold separately; provided that no
provision of this AGREEMENT shall be construed as [***]. For example, if a COMMERCIAL
PRODUCT consists of [***] which is intended to be used with and to improve the
half-life of FACTOR VIII, the NET
SALES of such COMMERCIAL PRODUCT shall be deemed to include the amount invoiced
([***]) by BAXTER, its SUBLICENSEES and/or their respective AFFILIATES for the
FACTOR VIII with which such product is intended to be used and the [***], it being
understood and agreed that, for purposes of calculating royalties, the [***] and
the FACTOR VIII are the COMMERCIAL PRODUCT.







	 	9.4	 	COMMERCIAL DILIGENCE. If, during the TERM, BAXTER sells or markets
another FACTOR VIII extended half-life product using a non-PEGYLATION technology which
is used to treat Hemophilia A, then BAXTER must meet the COMMERCIAL DILIGENCE
THRESHOLD, as set forth below. No later than [***] after the FIRST COMMERCIAL SALE of a
COMMERCIAL PRODUCT in each MAJOR MARKET in which MARKETING AUTHORIZATION has been
obtained, the sales of all COMMERCIAL PRODUCTS in the aggregate shall constitute at
least [***] of the total sales of all FACTOR VIII extended half-life products used to
treat Hemophilia A in such MAJOR MARKET (the “COMMERCIAL DILIGENCE THRESHOLD”). If
sales of such COMMERCIAL PRODUCTS, in the aggregate, do not meet the COMMERCIAL
DILIGENCE THRESHOLD in such MAJOR MARKET within such timeframe, then [***]. In the
event [***], the ROYALTY RATE to which NEKTAR AL is otherwise entitled shall be [***].
For example, [***]. The terms of any such [***] shall be negotiated in good faith by
the PARTIES, and shall include minimum [***] and shall provide that [***].





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	9.5	 	REPORTS, EXCHANGE RATES. BAXTER shall notify NEKTAR AL in writing
promptly upon the FIRST COMMERCIAL SALE of each COMMERCIAL PRODUCT in each country in
which BAXTER elects to pursue commercialization. Commencing upon the FIRST COMMERCIAL
SALE of a COMMERCIAL PRODUCT, BAXTER shall furnish to NEKTAR AL a [***] showing, on a
country-by-country basis, according to the volume of units of such COMMERCIAL
PRODUCT sold in each such country (by SKU) during the reporting period: (a) the
gross invoiced sales of the COMMERCIAL PRODUCT sold in each country during the
reporting period, and the amounts deducted therefrom to determine NET SALES from
such gross invoiced sales detailed in accordance with those deductions provided for
in the definition of NET SALES; (b) the royalties payable in DOLLARS, if any, which
shall have accrued hereunder based upon the NET SALES of the COMMERCIAL PRODUCT; (c)
the withholding taxes, if any, required by LAW to be deducted in respect of such
sales; and (d) the date of the FIRST COMMERCIAL SALE of the COMMERCIAL PRODUCT in
each country during the reporting period. With respect to sales of COMMERCIAL
PRODUCT invoiced in DOLLARS, the gross invoiced sales, NET SALES, and royalties
payable shall be expressed in the report in DOLLARS. With respect to sales of
COMMERCIAL PRODUCT invoiced in a currency other than DOLLARS, the gross invoiced
sales, NET SALES and royalties payable shall be expressed in the report provided
hereunder in the domestic currency of the PARTY making the sale as well as in the
DOLLAR equivalent of the royalty payable and the exchange rate used in determining
the amount of DOLLARS. The DOLLAR equivalent shall be calculated using the average
exchange rate (local currency per DOLLAR) published in The Wall Street Journal,
Western Edition, under the heading “Currency Trading,” on the last business day of
each month during the applicable calendar quarter. Reports shall be due hereunder on
the forty-fifth (45th) day following the close of each calendar quarter.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	9.6	 	THIRD PARTY ROYALTIES, ETC. If either PARTY is required to pay
royalties or any other payments to a THIRD PARTY because the composition of matter or
method of manufacture of a SELECTED REAGENT contained in a POTENTIAL PRODUCT or
COMMERCIAL PRODUCT used, manufactured, imported, sold or offered for sale in a
particular country infringes a PATENT of such THIRD PARTY
in that country or misappropriates know-how of such THIRD PARTY in that country,
then [***] for a license under such PATENT or know-how necessary to use,
manufacture, import, sell or offer for sale such POTENTIAL PRODUCT or COMMERCIAL
PRODUCT in such country. In such event, BAXTER [***]. For example, [***] as a result
of the manufacture, use, import, export, offer for sale or sale of a SELECTED
REAGENT, POTENTIAL PRODUCT or COMMERCIAL PRODUCT, and shall be in addition to
BAXTER’s obligations under Sections 15.1.2 and 17.1. In no event shall the royalties
due to NEKTAR AL on the NET SALES of COMMERCIAL PRODUCT in a country on account of
[***] pursuant to this Section 9.6 [***], except in the case where BAXTER is [***],
in which event the royalties due to NEKTAR AL on the NET SALES of COMMERCIAL PRODUCT
may be [***].







	10.	 	RECORDS; AUDITS; SHIPMENT TERMS; PAYMENT TERMS







	 	10.1	 	RECORDS. The PARTIES shall keep complete and accurate records in
sufficient detail to make the reports required hereunder, to confirm their respective
compliance with the provisions of this AGREEMENT, to properly reflect all amounts
billed, owed or reported and to verify the determination of all amounts payable
hereunder. Without limiting the foregoing, BAXTER shall include in each sublicense
granted by it pursuant to this AGREEMENT a provision requiring the SUBLICENSEE to make
reports to BAXTER consistent with those BAXTER is required to provide hereunder, to
keep and maintain records of sales made and deductions taken in calculating royalties
due to NEKTAR AL with respect to such sublicense, and to grant access to such records
by NEKTAR AL’S independent accountant pursuant to Section 10.2 below to the same extent
required of BAXTER under this AGREEMENT.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	10.2	 	AUDITS. Upon the written request of a PARTY, the other PARTY shall
permit an independent certified public accounting firm of recognized national standing
in the
United States, selected by the requesting PARTY and reasonably acceptable to the
other PARTY, at the requesting PARTY’S expense, to have access to such PARTY’S
records as may be reasonably necessary to verify (i) the accuracy of any amounts
reported, actually paid or payable under this AGREEMENT, and (ii) in the case of
NEKTAR AL, BAXTER’s compliance with Section 5.1, for any year ending not more than
[***] prior to the date of such request. Such audits shall be conducted under
conditions of confidentiality and may be made no more than once each calendar year,
during normal business hours at reasonable times mutually agreed by the PARTIES, and
shall not be conducted on a contingent fee basis.







The accounting firm shall provide each PARTY with a draft of its preliminary
findings and allow each PARTY [***] to review and comment on such preliminary
report. During such period, either PARTY is free to provide the accounting firm
with additional information, which shall be considered by the accounting firm. The
accounting firm may ask for additional information and/or perform additional
procedures it deems appropriate to ensure the accuracy of its final report. Copies
of the accounting firm’s final report will be issued to both PARTIES.




If such accounting firm concludes that additional amounts were owed to the
requesting PARTY during such period, or if the requesting PARTY overpaid for any
rates or fees for products, the other PARTY shall pay such additional amounts or
credit such overpayment ([***]) within [***] of the date the requesting PARTY
delivers to the other PARTY such accounting firm’s written report so concluding.
The fees charged by such accounting firm shall be paid by the requesting PARTY;
provided however, that if the audit discloses that the amounts payable by the
audited PARTY for the audited period are more than [***] of the amounts actually
paid for such period, or if the audit discloses that the audited PARTY has
overcharged the requesting PARTY for rates or fees for products by [***], then the
audited PARTY
shall pay the reasonable fees and expenses charged by such accounting firm. Upon
the expiration of [***] following the end of any calendar year, the calculation of
any amounts payable with respect to such calendar year, or rates or fees charged
for such year shall be binding and conclusive upon the PARTIES.


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	10.3	 	INVOICING; PAYMENT TERMS. NEKTAR AL shall send invoices to BAXTER for
any SELECTED REAGENT shipped to BAXTER no earlier than the date of shipment. All
invoices shall be in DOLLARS. Other than as provided for in Section 9.5 with respect to
royalty payments, which shall be made within [***] after the end of each calendar
quarter as provided for therein, all payments due under this AGREEMENT shall be due and
payable [***] from date of invoice. Royalties shown to have accrued to NEKTAR AL as set
forth in each royalty report to be provided under Section 9.5 shall be due and payable
on the date such royalty report is due. Any and all amounts past due under this
AGREEMENT shall [***].







	 	10.4	 	PAYMENT METHOD. Except as otherwise provided for herein, all payments
by BAXTER under this AGREEMENT shall be paid in DOLLARS, and all such payments shall be
made by electronic funds transfer in immediately available funds to such account as
NEKTAR AL shall designate before such payment is due. If at any time legal restrictions
prevent the prompt remittance of part or all royalties due with respect to sales of any
COMMERCIAL PRODUCT in any country where such COMMERCIAL PRODUCT is sold, payment shall
be made through such lawful means or methods as BAXTER shall reasonably determine.







	 	10.5	 	TAXES. All amounts due hereunder shall be paid net of any deduction for
withholding for any taxes or similar governmental charges imposed by any applicable
jurisdiction, and BAXTER shall provide NEKTAR AL evidence of its payment of any such
withholdings that may be required. BAXTER agrees to cooperate with and
provide reasonable assistance to NEKTAR AL in order to facilitate NEKTAR AL’s
recovery of any withholdings that NEKTAR AL is due.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	11.	 	CONFIDENTIALITY







	 	11.1	 	TERMINATION OF NON-DISCLOSURE AGREEMENT. All provisions of, rights
granted and covenants made in the NON-DISCLOSURE AGREEMENT are hereby terminated and of
no further force and effect and are superseded in their entirety by the provisions of,
rights granted and covenants made in this AGREEMENT. The PARTIES acknowledge and agree
that any disclosure made pursuant to the NON-DISCLOSURE AGREEMENT shall be subject to
and governed by the terms and conditions of this Article 11.







	 	11.2	 	IN GENERAL. For the TERM and for a period of [***] thereafter, each
PARTY shall maintain in confidence all information and materials of the other PARTY
(including, but not limited to, KNOW-HOW and samples of THERAPEUTIC AGENT, CONJUGATES,
REAGENT, SELECTED REAGENT, POTENTIAL PRODUCT and COMMERCIAL PRODUCT) disclosed or
provided to it by the other PARTY (either pursuant to this AGREEMENT or the
NON-DISCLOSURE AGREEMENT). CONFIDENTIAL INFORMATION shall be identified as
confidential in writing or, if disclosed verbally or by observation, summarized in
writing and submitted to RECIPIENT within [***] of the oral or visual disclosure
thereof (together with all embodiments thereof, the “CONFIDENTIAL INFORMATION”).
CONFIDENTIAL INFORMATION shall include both BAXTER MATERIALS and NEKTAR AL MATERIALS.
It may also include information regarding intellectual property and confidential or
proprietary information of AFFILIATES and THIRD PARTIES. The terms and conditions of
this AGREEMENT and the NON-DISCLOSURE AGREEMENT also shall be
deemed CONFIDENTIAL INFORMATION of both PARTIES.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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Notwithstanding the foregoing, CONFIDENTIAL INFORMATION shall not include that
portion of information or materials that the RECIPIENT can demonstrate by
contemporaneous written records was:




	 	(i)	 	known to the general public at the time of its
disclosure to the RECIPIENT, or thereafter became generally known to
the general public, other than as a result of actions or omissions of
the RECIPIENT in violation of this AGREEMENT or the NONDISCLOSURE
AGREEMENT;







	 	(ii)	 	known by the RECIPIENT prior to the date of
disclosure by the DISCLOSING PARTY;







	 	(iii)	 	disclosed to the RECIPIENT on an unrestricted
basis from a source unrelated to the DISCLOSING PARTY and not known to
be under a duty of confidentiality to the DISCLOSING PARTY; or







	 	(iv)	 	independently developed by the RECIPIENT without
the use of CONFIDENTIAL INFORMATION of the DISCLOSING PARTY.







Any combination of features or disclosures shall not be deemed to fall within the
foregoing exclusions merely because individual features are published or known to
the general public or in the rightful possession of the RECIPIENT unless the
combination itself and principle of operation thereof are published or known to the
general public or are in the rightful possession of the RECIPIENT.


 





	 	 	 
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the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	11.3	 	ADDITIONAL PROTECTIONS. Each PARTY shall take reasonable steps to
maintain the confidentiality of the CONFIDENTIAL INFORMATION of the other
PARTY, which steps shall be no less protective than those that such PARTY takes to
protect its own information and materials of a similar nature, but in no event less
than a reasonable degree of care. Neither PARTY shall use or permit the use of any
CONFIDENTIAL INFORMATION of the other PARTY except for the purposes of carrying out
its obligations or exercising its rights under this AGREEMENT. All CONFIDENTIAL
INFORMATION of a PARTY, including all copies and derivations thereof, is and shall
remain the sole and exclusive property of the DISCLOSING PARTY and subject to the
restrictions provided for herein. Neither PARTY shall disclose any CONFIDENTIAL
INFORMATION of the other PARTY other than to those of its directors, officers,
AFFILIATES, employees, licensors, independent contractors (including CONTRACT
MANUFACTURERS), SUBLICENSEES, assignees, agents and external advisors directly
concerned with the carrying out of this AGREEMENT, on a strictly applied “need to
know” basis. Other than as expressly permitted herein, RECIPIENT may not use
CONFIDENTIAL INFORMATION of the DISCLOSING PARTY in applying for PATENTS or securing
other intellectual property rights.







	 	11.4	 	PERMITTED DISCLOSURES. The obligations of Sections 11.1 and 11.2 shall
not apply to the extent that RECIPIENT is required to disclose information by LAW,
judicial order by a court of competent jurisdiction, or rules of a securities exchange
or requirement of a governmental agency for purposes of obtaining approval to test or
market POTENTIAL PRODUCT or COMMERCIAL PRODUCT (provided that the RECIPIENT shall
provide prior written notice thereof to the DISCLOSING PARTY and sufficient opportunity
for the DISCLOSING PARTY to review and comment on such required disclosure and request
confidential treatment thereof or a protective order therefor), or discloses
information to a patent office for the purposes of filing or maintaining a PATENT
APPLICATION or PATENT as permitted in this
AGREEMENT.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	11.5	 	IRREPARABLE INJURY. The PARTIES acknowledge that either PARTY’S breach
of this Article 11 would cause the other PARTY irreparable injury for which it would
not have an adequate remedy at LAW. In the event of a breach, the nonbreaching PARTY
shall be entitled to injunctive relief in addition to any other remedies it may have at
LAW or in equity, without necessity of posting a bond.







	12.	 	REGULATORY MATTERS







	 	12.1	 	COMPLAINTS/ADVERSE EVENTS. Each PARTY shall promptly notify the other
in writing of any information that comes to its attention concerning the safety or
efficacy of any SELECTED REAGENT, POTENTIAL PRODUCT and/or COMMERCIAL PRODUCT,
including, without limitation, any threatened or pending action by any regulatory
authority with respect thereto, in accordance with the applicable QUALITY AGREEMENT.







	 	12.2	 	SPECIFIC REQUIREMENTS. Without limiting the generality of Section 12.1,
BAXTER shall [***].





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	13.	 	REPRESENTATIONS & WARRANTIES; COVENANTS







	 	13.1	 	REPRESENTATIONS AND WARRANTIES. Each PARTY represents and warrants to
the other that as of the EFFECTIVE DATE to the best of its knowledge and belief: (a)
it has the full corporate power to enter into and perform this AGREEMENT; (b) this
AGREEMENT constitutes its legal, valid and binding obligation; (c) it has sufficient
legal and/or beneficial title or other rights under its intellectual property rights
to grant the licenses contained in this AGREEMENT; (d) each PARTY’S professional
employees, officers, contractors (including any
CONTRACT MANUFACTURERS) and consultants that will be involved with this AGREEMENT
and the RESEARCH PLAN (and in the case of BAXTER, its AFFILIATES and SUBLICENSEES),
has executed or will execute an agreement that requires such person or entity, to
the extent permitted by LAW, to assign all INVENTIONS, PATENTS, and KNOW-HOW made
during the course of and as a result of the performance of such PARTY’S obligations
under this AGREEMENT, to such PARTY; and (e) each of such PARTY’S employees,
officers, contractors (including any CONTRACT MANUFACTURERS) and consultants (and
in the case of BAXTER, its AFFILIATES and SUBLICENSEES) are or will be subject to
written confidentiality obligations no less restrictive than those provided for in
this AGREEMENT. If the obligation to assign under subsection 13.1(d) is not
permitted in a particular country, then such person or entity will be required to
grant an exclusive, worldwide, perpetual, royalty-free license to all such
INVENTIONS, PATENTS, and KNOW-HOW to the PARTY to whom such assignment was to be
made, with the right to sublicense.







	 	13.2	 	COMPLIANCE WITH LAWS. Each PARTY will comply with all LAWS in
performing its obligations and exercising its rights hereunder. Nothing in this
AGREEMENT shall be deemed to permit BAXTER or its SUBLICENSEES to export, re-export or
otherwise transfer any information or materials (including SELECTED REAGENT or
CONJUGATES) transferred hereunder or POTENTIAL PRODUCT or COMMERCIAL PRODUCT
manufactured therefrom without complying with LAWS.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	14.	 	LIMITATION OF LIABILITY; EXCLUSION OF DAMAGES







	 	14.1	 	LIMITATION OF LIABILITY. EXCEPT (I) FOR THE PARTIES’ OBLIGATIONS FOR
THIRD PARTY CLAIMS UNDER ARTICLE 15 AND (II) IN THE CASE OF A BREACH OF ARTICLE 7 OR 11:









	 	14.1.1	 	IN NO EVENT SHALL NEKTAR AL’S LIABILITY ARISING OUT OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION AS A RESULT OF THE RESEARCH, DEVELOPMENT,
MANUFACTURE, SUPPLY, USE OR SALE OF CONJUGATES, SELECTED REAGENTS, POTENTIAL
PRODUCTS OR COMMERCIAL PRODUCTS, EXCEED IN THE AGGREGATE, AN AMOUNT THAT IS
[***]. FOR CLARITY, [***] ARE NOT SUBJECT TO THE FOREGOING.







	 	14.1.2	 	IN NO EVENT SHALL A PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY OR
ITS AFFILIATES OR SUBLICENSEES FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE
OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION, DAMAGES RESULTING FROM
LOSS OF USE, LOSS OF PROFITS, INTERRUPTION OR LOSS OF BUSINESS OR OTHER
ECONOMIC LOSS) ARISING OUT OF THIS AGREEMENT OR WITH RESPECT TO A PARTY’S
PERFORMANCE OR NON-PERFORMANCE HEREUNDER. THIS REPRESENTS AN EXPRESS
ALLOCATION OF RISK BETWEEN THE PARTIES.







	 	14.2	 	REMEDIES. Notwithstanding anything herein to the contrary, the PARTIES
acknowledge that either PARTY’S breach of Articles 7 and 11 would cause the other PARTY
irreparable injury for which it would not have an adequate remedy at LAW. In the event
of a breach, the nonbreaching PARTY shall be entitled to injunctive relief in addition
to any other remedies it may have at LAW or in equity, without necessity of posting a
bond.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	14.3	 	APPLICABILITY, EXCLUSIVITY OF REMEDIES. The limitations on liability
and exclusion of damages under this AGREEMENT: (i) apply even if a PARTY had or should
have had knowledge, actual or constructive, of the possibility of such damages; (ii)
are a fundamental element of the basis of the bargain between the PARTIES and this
AGREEMENT would not be entered into without such limitations and exclusions and
(iii) other than as set forth in this Article 14, shall apply whether a claim is
based on breach of contract, breach of warranty, tort (including negligence),
product liability, strict liability or otherwise, and notwithstanding any failure of
essential purpose of any limited remedy herein. Moreover, the remedies under this
AGREEMENT are intended to be exclusive, and, other than as set forth in this Article
14, the limitations on liability and exclusion of damages under this AGREEMENT are
intended to apply even if there is a total and fundamental breach of this AGREEMENT,
and the essential purpose of these provisions is to limit the PARTIES’ respective
liabilities hereunder.







	15.	 	INDEMNIFICATION; INSURANCE







	 	15.1	 	INDEMNITY.







	 	15.1.1	 	BY NEKTAR AL. NEKTAR AL shall defend, indemnify and hold BAXTER,
BAXTER’S SUBLICENSEES and their respective shareholders, directors, officers,
employees and agents (each, a “BAXTER INDEMNITEE”) harmless from and against
all losses, liabilities, damages, costs and expenses (including reasonable
attorney’s fees and costs of investigation and litigation, regardless of
outcome) resulting from all claims, demands, actions and other proceedings by
or on behalf of any THIRD PARTY (including any governmental authority)
(collectively, “CLAIMS”) to the extent arising from: (a) the breach of any
representation, warranty, covenant or material
obligation of NEKTAR AL under this AGREEMENT; [***].





 





	 	 	 
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	 	15.1.2	 	BY BAXTER. BAXTER shall defend, indemnify and hold NEKTAR AL, NEKTAR
AL AFFILIATES, and their respective shareholders, directors, officers,
employees and agents (each, a “NEKTAR AL INDEMNITEE”) harmless from and
against all CLAIMS to the extent arising from: (a) the breach of any
representation, warranty, covenant or material obligation of BAXTER under this
AGREEMENT; [***].







	 	15.2	 	INSURANCE. Each PARTY shall, at its own expense, maintain comprehensive
general liability insurance, including product liability insurance, in the minimum
amount of [***] per occurrence, and [***] in the aggregate. BAXTER has the right to
self-insure. Any independent insurance carriers must be rated A-, VII or better by A.M.
Best Company. The PARTIES shall maintain such insurance for so long as they continue to
research or develop or manufacture or commercialize POTENTIAL PRODUCTS or COMMERCIAL
PRODUCTS, and shall from time to time provide copies of certificates of such insurance
to each other upon request. If the insurance policy is written on a claims-made basis,
then the coverage must be kept in place for at least [***] after the termination of
this AGREEMENT.







	 	15.3	 	PROCEDURES. If any CLAIM covered by Section 15.1 is brought, the
indemnifying PARTY’S obligations are conditioned upon the following:







	 	(i)	 	the indemnified PARTY shall promptly notify the indemnifying
PARTY in writing of such CLAIM, provided, however, the failure to provide such
notice within a reasonable period of time shall not relieve the indemnifying
PARTY of any of its obligations hereunder except if the indemnifying PARTY is
prejudiced by such failure or delay;





 





	 	 	 
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	 	(ii)	 	the indemnifying PARTY shall assume, at its cost and expense,
the sole defense of such CLAIM through counsel selected by the indemnifying
PARTY, except that those indemnified may at their option and expense select and
be represented by separate counsel;







	 	(iii)	 	the indemnifying PARTY shall maintain control of such defense
and/or the settlement of such CLAIM, and the indemnified PARTY shall cooperate
with the indemnifying PARTY;







	 	(iv)	 	those indemnified may, at their option and expense, participate
in such defense, and if they so participate, the indemnifying PARTY and those
indemnified shall cooperate with one another in such defense;







	 	(v)	 	the indemnifying PARTY will have authority to consent to the
entry of any monetary judgment, to enter into any settlement or otherwise to
dispose of such CLAIM (provided and only to the extent that an indemnified
PARTY does not have to admit liability and such judgment does not involve
equitable relief), and an indemnified PARTY may not consent to the entry of any
judgment, enter into any settlement or otherwise to dispose of such CLAIM
without the prior written consent of the indemnifying PARTY; and







	 	(vi)	 	the indemnifying PARTY shall pay the full amount of any
judgment, award or settlement with respect to such CLAIM and all other costs,
fees and expenses related to the resolution thereof; provided that such other
costs, fees and expenses have been incurred or agreed, as the case may be, by
the indemnifying PARTY in its defense or settlement of the CLAIM.





 





	 	 	 
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	16.	 	INVENTIONS, KNOW-HOW and PATENTS







	 	16.1	 	EXISTING INTELLECTUAL PROPERTY. Other than as expressly provided in
this AGREEMENT, neither PARTY grants nor shall be deemed to grant any right, title or
interest to the other PARTY in any PATENT, PATENT APPLICATION, KNOW-HOW or other
intellectual property right CONTROLLED by such PARTY as of the EFFECTIVE DATE.







	 	16.2	 	DISCLOSURE. Each PARTY shall promptly disclose in writing to the other
all INVENTIONS arising from the joint or separate activities (including any INVENTIONS
conceived or first reduced to practice as a result of such activities) of the PARTIES
or their agents, employees, SUBLICENSEES or independent contractors (including CONTRACT
MANUFACTURERS) during and in connection with the performance of their obligations or
activities under this AGREEMENT (including in carrying out its activities under the
RESEARCH PLAN and the development or manufacture of POTENTIAL PRODUCT or COMMERCIAL
PRODUCT); provided, however, that [***].







	 	16.3	 	OWNERSHIP OF INVENTIONS. Except as otherwise set forth in Sections 16.4
or 16.5, all INVENTIONS conceived or first reduced to practice solely by employees,
agents, SUBLICENSEES or independent contractors (including CONTRACT MANUFACTURERS) of a
PARTY during the course and in the performance of this AGREEMENT (including in carrying
out its activities under the RESEARCH PLAN and the development or manufacture of
POTENTIAL PRODUCT or COMMERCIAL PRODUCT) (each, a “SOLE INVENTION”) shall be the
exclusive property of such PARTY. Except as otherwise set forth in Sections 16.4 or
16.5, if employees, agents, SUBLICENSEES or independent contractors (including CONTRACT
MANUFACTURERS) of each of NEKTAR AL and BAXTER jointly, conceive or first reduce to
practice any INVENTION during the course and in the performance of activities conducted
in connection with this AGREEMENT (including in carrying out its activities 







 





	 	 	 
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under the RESEARCH PLAN and the
development or manufacture of POTENTIAL PRODUCT or COMMERCIAL PRODUCT) (each, a
“JOINT INVENTION”) then such JOINT INVENTION, and any PATENT APPLICATION or PATENT
claiming the same shall be [***] JOINT INVENTION, and any PATENT APPLICATION or
PATENT claiming the same, [***]. For the avoidance of doubt, the determination as to
whether an INVENTION has been “solely” or “jointly” made shall be based upon whether
employees, agents, SUBLICENSEES or independent contractors (including CONTRACT
MANUFACTURERS) of a PARTY would be or are properly named as an inventor on a
corresponding PATENT APPLICATION under United States inventorship LAWS. Any JOINTLY
OWNED TECHNOLOGY, regardless of whether such INVENTION is conceived or first reduced
to practice solely or jointly by employees, agents, SUBLICENSEES or independent
contractors (including CONTRACT MANUFACTURERS) of each of NEKTAR AL and BAXTER,
shall be considered a JOINT INVENTION for the purposes of this AGREEMENT.




	 	16.4	 	NEKTAR AL CORE TECHNOLOGY INVENTIONS. Any and all rights, title and
interest in and to all SOLE INVENTIONS and JOINT INVENTIONS (except those JOINT
INVENTIONS that are JOINTLY OWNED TECHNOLOGY), which fall solely within the scope of
NEKTAR AL CORE TECHNOLOGY, shall belong solely to NEKTAR AL (“NEKTAR AL CORE TECHNOLOGY
INVENTIONS”). BAXTER hereby agrees to and hereby does, and shall, without additional
consideration transfer and assign to NEKTAR AL all of its right, title and interest in
and to such NEKTAR AL CORE TECHNOLOGY INVENTIONS and all intellectual property rights
therein including enforcement rights, and shall require its employees, agents,
SUBLICENSEES and independent contractors (including CONTRACT MANUFACTURERS) to so
assign their right, title and interest therein to NEKTAR
AL. NEKTAR AL shall be responsible, [***], for the filing, prosecution and
maintenance of foreign and domestic PATENT APPLICATIONS and PATENTS covering such
NEKTAR AL CORE TECHNOLOGY INVENTIONS.






 





	 	 	 
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	 	16.5	 	BAXTER CORE TECHNOLOGY INVENTIONS. Any and all rights, title and
interest in and to all SOLE INVENTIONS and JOINT INVENTIONS (except those JOINT
INVENTIONS that are JOINTLY OWNED TECHNOLOGY), which fall solely within the scope of
BAXTER CORE TECHNOLOGY, shall belong solely to BAXTER (“BAXTER CORE TECHNOLOGY
INVENTIONS”). NEKTAR AL hereby agrees to and hereby does, and shall, without additional
consideration assign to BAXTER all of its right, title and interest in and to any
BAXTER CORE TECHNOLOGY INVENTIONS and all intellectual property rights therein
including enforcement rights, and shall require its employees, agents or independent
contractors (including CONTRACT MANUFACTURERS) to so assign their right, title and
interest therein to BAXTER. BAXTER shall be responsible, [***], for the filing,
prosecution and maintenance of foreign and domestic PATENT APPLICATIONS and PATENTS
covering such BAXTER CORE TECHNOLOGY INVENTIONS.







	 	16.6	 	INDIVIDUAL PATENT FILINGS. Each PARTY shall have sole discretion and
right to prepare, file, prosecute, maintain and defend PATENT APPLICATIONS or PATENTS
for INVENTIONS it solely owns under this AGREEMENT, and shall be responsible for
related interference proceedings. [***]. Costs incurred with respect to PATENT
APPLICATIONS shall be borne by the PARTY with the right to prosecute each such PATENT
APPLICATION.





 





	 	 	 
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	 	16.7	 	JOINT PATENT FILINGS. With respect to all PATENT APPLICATIONS on JOINT
INVENTIONS that are jointly owned by the PARTIES (i.e., JOINT INVENTIONS that have not
been assigned nor are assignable to the other PARTY
pursuant to Sections 16.4 and 16.5) (the “JOINT PATENT APPLICATIONS”), the PARTIES
shall determine which PARTY shall be responsible for filing, prosecuting and
maintaining PATENT APPLICATIONS and PATENTS on behalf of both PARTIES (the
“RESPONSIBLE PARTY”) [***]. All PATENTS issuing from such PATENT APPLICATIONS shall
be defined as “JOINT PATENTS”. It is understood that BAXTER shall have the
preferential right to prosecute those JOINT INVENTIONS directed solely at POTENTIAL
or COMMERCIAL PRODUCTS. At least [***] prior to the contemplated filing of such
PATENT APPLICATION, the RESPONSIBLE PARTY shall submit a substantially completed
draft of the JOINT PATENT APPLICATION to the other PARTY’s patent attorneys only for
its approval, which shall not be unreasonably withheld or delayed. Except as set
forth below, [***] of the preparation, filing, prosecution and maintenance of all
JOINT PATENT APPLICATIONS. [***] of preparing, filing, prosecuting and maintaining
all of the foreign and domestic JOINT PATENT APPLICATIONS that cover INVENTIONS
within the scope of JOINTLY OWNED TECHNOLOGY, and the JOINT PATENTS that issue
therefrom.







	 	16.8	 	DISPOSITION OF INVENTIONS. It is understood and agreed that for the
purposes of this AGREEMENT, even if an employee, agent, SUBLICENSEE or contractor of a
PARTY is an inventor of an INVENTION that is claimed in a PATENT or PATENT APPLICATION,
the PARTY who owns said INVENTION as a result of the operation of Article 16 shall not
assign, transfer, license or otherwise dispose of any other claim in such PATENT or
PATENT APPLICATION, unless such PARTY solely or jointly owns or otherwise has the right
to license rights with respect to said other claim (in each case as expressly provided
for in this AGREEMENT).





 





	 	 	 
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	 	16.9	 	FURTHER ACTIONS. Each PARTY shall cooperate with the other PARTY to
execute all documents and take all reasonable actions to effect the intent of this
Article 16.







	 	16.10	 	PATENT MARKING AND POTENTIAL PRODUCT AND COMMERCIAL PRODUCT MARKING.







	 	(i)	 	BAXTER shall place appropriate NEKTAR AL patent and/or patent
pending markings on each POTENTIAL PRODUCT and COMMERCIAL PRODUCT or the
packaging therefor. The content, form, size, location and language of such
markings shall be in accordance with the LAWS and practices of the country in
which the applicable units of each POTENTIAL PRODUCT or COMMERCIAL PRODUCT are
distributed.







	 	(ii)	 	BAXTER shall be responsible for all packaging (non-commercial
and commercial) and labeling of POTENTIAL PRODUCT or COMMERCIAL PRODUCT. To the
extent allowed by LAWS, all POTENTIAL PRODUCT or COMMERCIAL PRODUCT labeling,
packaging and package inserts and any promotional materials associated with the
POTENTIAL PRODUCT or COMMERCIAL PRODUCT shall carry, in a conspicuous location,
the trademark of NEKTAR AL, the identity and style of which shall be at NEKTAR
AL’S sole discretion. NEKTAR AL authorizes the use of its trademark pursuant to
this Section 16.10(ii).







	 	16.11	 	SUPPLEMENTAL PATENT PROTECTION. [***]. Such protection shall include
the listing of any requested [***] in any book, or book equivalent, of any country
necessary for extending the term of such [***].





 





	 	 	 
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	17.	 	INFRINGEMENT







	 	17.1	 	INFRINGEMENT OF THIRD PARTY RIGHTS.







	 	17.1.1	 	NOTICE. If the development, manufacture, use, import, sale or offer
for sale of a POTENTIAL PRODUCT or a COMMERCIAL PRODUCT results in a claim for
PATENT infringement by a THIRD PARTY, the PARTY to this AGREEMENT first having
notice shall promptly notify the other PARTY in writing. The notice shall set
forth the facts of the claim in reasonable detail.







	 	17.1.2	 	LITIGATION UNRELATED TO SELECTED REAGENT. Except to the extent any
infringement of patents or misappropriation of know-how results solely from
the composition of matter or the method of manufacture of a SELECTED REAGENT,
[***] from and against all losses, liabilities, damages, costs and expenses
(including reasonable attorney’s fees and costs of investigation and
litigation, regardless of outcome) resulting from any claim that the
development, manufacture, use, import, offer for sale or sale of a POTENTIAL
PRODUCT or a COMMERCIAL PRODUCT infringes a THIRD PARTY patent or
misappropriates THIRD PARTY know-how, and the provisions of Sections 15.1.2
and 15.3 shall apply with respect to any such claim to the same extent as
though it were a CLAIM [***]. In the event of a conflict between the
provisions of Article 15 and this Section 17.1.2, [***].







	 	17.1.3	 	LITIGATION RELATED TO SELECTED REAGENT. If infringement of a THIRD
PARTY patent or misappropriation of THIRD PARTY know-how is alleged solely
because the composition of the SELECTED REAGENT or the method of making the
same, is used in the development, manufacture, use, offer for sale, sale, or
import of a POTENTIAL PRODUCT or COMMERCIAL PRODUCT, [***], any such action
taken by such THIRD PARTY against either PARTY or both PARTIES, including the
costs and expenses (including reasonable attorney’s fees and costs of
investigation and
litigation, regardless of outcome) resulting from such defense. [***].





 





	 	 	 
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	 	17.2	 	INFRINGEMENT BY THIRD PARTIES.







	 	17.2.1	 	NOTICE OF INFRINGEMENT. If any VALID PATENT CLAIM is infringed by a
THIRD PARTY, or any KNOW-HOW utilized in the manufacture, use, import, offer
for sale or sale of SELECTED REAGENT or POTENTIAL PRODUCT or COMMERCIAL
PRODUCT is misappropriated by a THIRD PARTY, the PARTY first having knowledge
of such infringement or misappropriation shall promptly notify the other PARTY
in writing. The notice shall set forth the facts of such infringement or
misappropriation in reasonable detail.

	 
	 	17.2.2	 	PROSECUTION OF ACTIONS RELATED TO SELECTED REAGENT.







	 	A.	 	NEKTAR AL shall have the right, but not the
obligation, to carry out actions against THIRD PARTIES arising from such
THIRD PARTIES’ infringement or misappropriation of NEKTAR AL LICENSED
TECHNOLOGY covering the manufacture, use, import, offer for sale or sale
of a SELECTED REAGENT. [***].







	 	B.	 	If NEKTAR AL fails to bring an action or
proceeding within a period of [***] after receiving written notice from
BAXTER of the possibility of a claim, or otherwise having knowledge of a
claim described in Section 17.2.2(A), BAXTER shall have the right, but
not the obligation, to bring and control any such action using counsel
of its own choice, [***].





 





	 	 	 
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	 	C.	 	AWARDS. If either PARTY brings an action
for infringement or
misappropriation by a THIRD PARTY under this Section 17.2.2 any
damages or other monetary awards or payments in settlement recovered
by such PARTY shall be applied first to defray the costs and
expenses incurred by both PARTIES in the action. Any remainder shall
be shared by the PARTIES as follows: [***], when the action for
infringement or misappropriation relates to a COMMERCIAL PRODUCT;
and [***].







	 	17.2.3	 	PROSECUTION OF ACTIONS RELATED TO THE FIELD.







	 	A.	 	Except as set forth in Section 17.2.2, BAXTER
shall have the primary right, but not the obligation, to carry out
actions against THIRD PARTIES arising from such THIRD PARTIES’
infringement or misappropriation of NEKTAR AL LICENSED TECHNOLOGY in
the FIELD, including the manufacture, use, import, offer for sale or
sale of a POTENTIAL PRODUCT or COMMERCIAL PRODUCT. [***].







	 	B.	 	If BAXTER fails to bring an action or proceeding
within a period of sixty (60) days after receiving written notice from
NEKTAR AL of the possibility of a claim, or otherwise having knowledge
of a claim described in Section 17.2.3(A), NEKTAR AL shall have the
right, but not the obligation, to bring and control any such action
using counsel of its own choice, [***].







	 	C.	 	AWARDS. If either PARTY brings an action
for infringement or misappropriation by a THIRD PARTY under this
Section 17.2.3 any damages or other monetary awards or payments in
settlement recovered by such PARTY shall be applied first to defray the
costs and
expenses incurred by both PARTIES in the action. Any remainder shall
be shared by the PARTIES as follows: [***].






 





	 	 	 
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	18.	 	[INTENTIONALLY OMITTED]

	 
	19.	 	TERM AND TERMINATION







	 	19.1	 	EXPIRATION. The term of this AGREEMENT (the “TERM”) shall commence on
the EFFECTIVE DATE and shall continue until terminated as set forth herein. Once a
POTENTIAL PRODUCT is a COMMERCIAL PRODUCT and has been commercialized, this AGREEMENT
shall expire on a country-by-country basis upon the expiration of all royalty
obligations with respect to such COMMERCIAL PRODUCT in the applicable country, unless
earlier terminated as provided herein. Upon the expiration of royalty obligations with
respect to a COMMERCIAL PRODUCT in any applicable country, BAXTER is hereby granted by
NEKTAR AL a paid-up, exclusive, royalty-free, perpetual, non-cancelable, license, with
rights to sublicense, in the FIELD under the NEKTAR AL LICENSED TECHNOLOGY to make,
have made, use, sell, offer for sale and import such COMMERCIAL PRODUCT in such
country, [***]. The terms and conditions of such manufacture and supply of SELECTED
REAGENT shall be negotiated in good faith by the PARTIES.







	 	19.2	 	DISCRETIONARY TERMINATION. [***], other than pursuant to any other
provision of this AGREEMENT, [***], payable in accordance with Section 19.7.5, upon
[***].





 





	 	 	 
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	 	19.3	 	TERMINATION FOR CAUSE. Each PARTY shall have the right to terminate
this AGREEMENT by written notice to the other PARTY for a failure to comply with the
material terms of this AGREEMENT by the other PARTY, provided such failure to
comply is not corrected by the failing PARTY within: (i) [***] of written notice of
any failure to make timely payment of royalties or any other amount that is not in
dispute, when due hereunder, or (ii) [***] of receipt of written notice of any other
failure from the non-failing PARTY.







	 	19.4	 	TERMINATION FOR INSOLVENCY. Either PARTY may terminate this AGREEMENT
immediately by written notice in the event: (i) the other PARTY voluntarily enters into
bankruptcy proceedings; (ii) the other PARTY makes an assignment for the benefit of
creditors; (iii) a petition is filed against the other party under a bankruptcy law, a
corporate reorganization law, or any other law for relief of debtors or similar law
analogous in purpose or effect, which petition is not stayed or dismissed within [***]
of filing thereof; or (iv) the other PARTY enters into liquidation or dissolution
proceedings or a receiver is appointed with respect to any assets of the other PARTY,
which appointment is not vacated within [***] (herein a BANKRUPTCY PROCEEDING).







	 	19.5	 	TERMINATION/[***] FOR LACK OF DILIGENCE. In the event [***]. In the
event [***] provided for herein shall continue to apply, except as otherwise set forth
in Section 19.5.2. Notwithstanding the foregoing, before [***] may provide notice of
termination of the AGREEMENT or termination of [***] shall call a special meeting of
the JOINT STEERING COMMITTEE for the sole purpose of discussing the reasons for [***].
Such special meeting of the JOINT STEERING COMMITTEE shall be held [***]. At any time
during the period commencing on the conclusion of such meeting up through the date that
is [***].





 





	 	 	 
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	 	19.5.1	 	An “ACCEPTABLE DELAY” shall be the failure to meet a Development Diligence
milestone event due to:







	 	A.	 	an event of force majeure as described in Section 22.1;







	 	B.	 	any breach by NEKTAR AL, or NEKTAR AL delay,
that materially adversely affects BAXTER’s ability to meet a relevant
Development Diligence milestone event;







	 	C.	 	a dispute or disagreement in one or more of the
governance committees (JOINT STEERING COMMITTEE, RESEARCH COMMITTEE,
DEVELOPMENT AND PRODUCTION COMMITTEE) which is [***];







	 	D.	 	a regulatory requirement that comes into effect
after the EFFECTIVE DATE;







	 	E.	 	a development issue involving safety, toxicity,
efficacy or pharmacokinetics, or the ability to scale up to commercial
manufacturing (including the inability to obtain commercially viable
yields);







	 	F.	 	any other delay deemed to be an ACCEPTABLE DELAY
by both PARTIES in writing, the intent of which is to be inclusive of
unanticipated delays outside of the control of BAXTER; or







	 	G.	 	[***] in accordance with the timelines set forth
in the RESEARCH PLAN, [***].






 





	 	 	 
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In the event the PARTIES cannot agree whether a delay is outside the control of
BAXTER and deemed an ACCEPTABLE DELAY, (i) either PARTY may refer the matter to the
JOINT STEERING COMMITTEE for resolution, (ii) if the JOINT STEERING COMMITTEE
cannot resolve such matter within [***], then the matter shall be sent to the
PARTIES’ [***] for resolutions, (iii) if [***], then the PARTIES
shall refer the matter to a [***] and/or significant professional experience with
respect to the specific subject matter under dispute, such professional shall make
a determination within [***] of being selected by the PARTIES and such
professional’s determination shall be conclusive and binding on the PARTIES.




In the case of an ACCEPTABLE DELAY, and except as otherwise set forth in Section
19.5.1(G), the [***]. In the event [***] due to one or more of these events, the
[***].




	 	(i)	 	[***];

	 
	 	(ii)	 	[***];

	 
	 	(iii)	 	[***];

	 
	 	(iv)	 	[***].







	 	19.5.2	 	If, at the time that [***] elects to exercise its rights to terminate this
AGREEMENT [***] solely for the treatment of [***]. In such event, the following
shall occur:







	 	(i)	 	The definition of “FIELD” in Section 1.26 shall automatically be
narrowed to consist only of [***] for use alone for the treatment of
[***];







	 	(ii)	 	The definition of “THERAPEUTIC AGENT” shall
automatically be limited to [***];







	 	(iii)	 	[***]; and







	 	(iv)	 	All royalty and milestone provisions applicable
to such POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS shall remain in
effect.





 





	 	 	 
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	 	19.6	 	TERMINATION ON CHALLENGE. [***] may terminate this AGREEMENT by giving
written notice to [***] challenging the validity of any of the [***]; provided that
[***] may not exercise such termination rights if [***] (whether under contract or
other legal theory) [***] allege in defense of such claim or action that the COMMERCIAL
PRODUCT does not infringe a VALID PATENT CLAIM.







	 	19.7	 	EFFECT OF TERMINATION.







	 	19.7.1	 	The provisions of Articles [***] (and in each case together with any defined
terms applicable to such provisions) shall survive expiration or termination
of this AGREEMENT for any reason whatsoever.







	 	19.7.2	 	Notwithstanding anything in this AGREEMENT to the contrary, if this AGREEMENT
is terminated for any reason other than for cause [***]:







	 	A.	 	[***];

	 
	 	B.	 	[***];

	 
	 	C.	 	BAXTER shall pay NEKTAR AL all
earned milestone payments and accrued royalties in accordance
with the terms of this AGREEMENT;

	 
	 	D.	 	[***] Subject to the foregoing,
if this AGREEMENT is terminated for any reason whatsoever, any
licenses and sublicenses granted under this AGREEMENT shall
automatically terminate and all licensed rights shall revert
in their entirety to the respective licensor; and

	 
	 	E.	 	Termination of this AGREEMENT by
a PARTY shall not be an exclusive remedy and all other remedies
will be available to the terminating PARTY, in equity and at
LAW, subject to the limitations and exclusions that are
provided for in this AGREEMENT.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


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	 	19.7.3	 	If this AGREEMENT is terminated by [***], then on the effective date of such
termination, [***], including any of the intellectual property rights therein,
including any JOINT PATENT APPLICATIONS and JOINT PATENTS covering such
JOINTLY OWNED TECHNOLOGY. As of the effective date of such termination, [***]
shall have the sole right, as between NEKTAR AL and BAXTER, to bring actions
against THIRD PARTIES arising from such THIRD PARTIES’ infringement or
misappropriation of JOINTLY OWNED TECHNOLOGY. [***].







	 	19.7.4	 	In the event of a BANKRUPTCY PROCEEDING, NEKTAR AL hereby agrees to grant
and hereby grants to BAXTER and its AFFILIATES, and the PARTIES agree that
this AGREEMENT shall be deemed an executory contract and that BAXTER and its
AFFILIATES shall be deemed to retain, an exclusive, perpetual, non-cancelable,
license, with rights to sublicense as provided for herein, in the FIELD under
the NEKTAR AL LICENSED TECHNOLOGY to develop, make, have made, import, export,
use, sell and have sold POTENTIAL PRODUCTS and COMMERCIAL PRODUCT(S) in the
FIELD; provided that BAXTER shall continue to fulfill its MILESTONES and
royalty payment obligations under this AGREEMENT.
 BAXTER agrees to pay NEKTAR AL, or any trustee, in such BANKRUPTCY
PROCEEDING a royalty for such a license equivalent to the license royalty
provision provided in this AGREEMENT. In addition to the surviving Sections
in Section 19.7.1, Sections 9.2, 9.3, 9.5 and 9.6 shall survive termination
or expiration of this Agreement.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


72









 






	 	19.7.5	 	TERMINATION FEE. If this AGREEMENT is terminated by BAXTER under
Section 19.2, BAXTER shall pay to NEKTAR AL a termination fee (“TERMINATION
FEE”) within [***] after the effective date of such termination as follows:
(i) if such termination occurs prior to the payment to NEKTAR AL of all of the
[***], then the TERMINATION FEE shall be equal to [***], (ii) if such
termination occurs after payment to NEKTAR AL of all of the [***], then the
TERMINATION FEE shall be [***]; (iii) if such termination occurs after the
successful completion of the [***], then the TERMINATION FEE shall be [***];
and (iv) if such termination occurs after the successful completion of the
[***], then the TERMINATION FEE shall be [***]. In addition to the foregoing
and, if applicable, if a COMMERCIAL PRODUCT is not launched within [***] after
the date on which [***]. Notwithstanding the foregoing, if BAXTER terminates
the AGREEMENT under Section 19.2 due to a COMMERCIAL FAILURE, the TERMINATION
FEE [***]. “COMMERCIAL FAILURE” means:







	 	(i)	 	[***];

	 
	 	(ii)	 	[***];

	 
	 	(iii)	 	[***];

	 
	 	(iv)	 	[***];

	 
	 	(v)	 	[***];

	 
	 	(vi)	 	[***].







For clarity, if this AGREEMENT is terminated by BAXTER in connection with a COMMERCIAL
FAILURE, there shall be [***].


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


73









 






	20.	 	ASSIGNMENT

	 
	 	 	Unless otherwise expressly permitted hereunder, neither PARTY may assign any of its rights
or delegate any of its duties under this AGREEMENT without the prior written consent of the
other PARTY, except that either PARTY may assign any or all of its rights and/or
responsibilities hereunder without the other PARTY’S consent as part of: (i) the sale of all
or substantially all of the assets or the entire business to which this AGREEMENT relates,
(ii) a merger, consolidation, reorganization or other combination with or into another
person or entity; or (iii) the transfer or assignment to an AFFILIATE, in each case,
pursuant to which the surviving entity or assignee assumes the assigning or merging PARTY’S
obligations hereunder. Any assignment made in violation of this Article 20 shall be null and
void.

	 
	21.	 	NOTICES

	 
	 	 	Wherever notice is required or permitted hereunder, it shall be by personal delivery, first
class mail, overnight delivery service, or sent by facsimile transmission, with electronic
confirmation, properly directed to the PARTY at its address and contact information listed
below. Said address and contact information may be changed from time to time by similar
written notice.







If to BAXTER, addressed to:

Baxter Healthcare Corporation One

Baxter Parkway

Deerfield, Illinois 60015

Attention: [***]

Telephone: [***]

Facsimile: [***]


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


74









 






Baxter Healthcare SA

CH-8304 Wallisellen

Zurich, Switzerland

Attention: [***]

Telephone: [***]

Facsimile: [***]




With copies to:




Baxter Healthcare Corporation

One Baxter Parkway

Deerfield Illinois 60015

Attention: [***]

Telephone: [***]

Facsimile: [***]




Baxter Healthcare SA

CH-8304 Wallisellen

Zurich, Switzerland

Attention: [***]

Telephone: [***]

Facsimile: [***]




If to NEKTAR AL, addressed to:




NEKTAR Therapeutics AL, Corporation 

1112 Church Street

Huntsville, AL 35801

Attention: [***]

Facsimile: [***]




With a copy to: [***]




Nektar Therapeutics

150 Industrial Road

San Carlos, CA 94070-6256

Attention: [***]

Facsimile: [***]


 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


75









 






	22.	 	MISCELLANEOUS







	 	22.1	 	FORCE MAJEURE. Except for each PARTY’s confidentiality and indemnity
obligations, the obligations of either PARTY under this AGREEMENT shall be excused
during each period of delay caused by matters such as acts of God, strikes, supplier
delays, failure of utilities or common carriers, shortages of raw materials,
government orders, sufferance of or voluntary compliance with acts of government or
governmental regulation, or acts of war or terrorism, which are reasonably beyond the
control of the PARTY obligated to perform. Force majeure shall not include a lack of
funds, bankruptcy or other financial cause or disadvantage, and force majeure shall
not excuse or delay any PARTY’S payment obligations under this AGREEMENT. Nothing
contained in this AGREEMENT shall affect either PARTY’s ability or discretion
regarding any strike or other employee dispute or disturbance and all such strikes,
disputes or disturbances shall be deemed to be beyond the control of such PARTY. A
condition of force majeure shall be deemed to continue only so long as the affected
PARTY shall be taking all reasonable actions necessary to overcome such condition. If
either PARTY shall be affected by a condition of force majeure, such PARTY shall give
the other PARTY prompt notice thereof, which notice shall contain the affected PARTY’S
estimate of the duration of such condition and a description of the steps being taken
or proposed to be taken to overcome such condition of force majeure. Any delay
occasioned by any such cause shall not constitute a default, breach or failure under
this AGREEMENT, and the obligations of the PARTIES shall be suspended during the
period of delay so occasioned. During any period of force majeure, the PARTY that is
not directly affected by such condition of force majeure may take any reasonable
action
necessary to mitigate the effects of such condition of force majeure.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


76









 






	 	22.2	 	SEVERABILITY. All the terms and provisions of this AGREEMENT are
distinct and severable, and if any term or provision is held unenforceable, illegal or
void in whole or in part by any court, regulatory authority or other competent
authority it shall to that extent be deemed not to form part of this AGREEMENT, and the
enforceability, legality and validity of the remainder of this AGREEMENT shall not be
affected thereby.







	 	22.3	 	VARIATION. This AGREEMENT may not be amended, varied or modified in any
manner except by an instrument in writing signed by a duly authorized officer or
representative of each PARTY hereto.







	 	22.4	 	FORBEARANCE AND WAIVER. No waiver by a PARTY in respect of any breach
shall operate as a waiver in respect of any subsequent breach. No forbearance, failure
or delay by a PARTY in exercising any right or remedy shall operate as a waiver
thereof, nor shall any single or partial forbearance, exercise or waiver of any right
or remedy prejudice its further exercise of any right or remedy under this AGREEMENT or
at LAW.







	 	22.5	 	COUNTERPARTS; FACSIMILE. This AGREEMENT may be executed in more than
one counterpart, each of which constitutes an original and all of which together shall
constitute one enforceable agreement. For purposes of this AGREEMENT and any other
document required to be delivered pursuant to this AGREEMENT, facsimiles of signatures
shall be deemed to be original signatures. In addition, if any of the PARTIES sign
facsimile copies of this AGREEMENT, such copies shall be deemed originals.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


77









 






	 	22.6	 	NO PARTNERSHIP. The relationship of the PARTIES is that of independent
contractors and this AGREEMENT shall not operate so as to create a partnership or
joint venture of any kind between the PARTIES.







	 	22.7	 	CONSTRUCTION. The PARTIES have participated jointly in the negotiation
and drafting of this AGREEMENT. In the event that an ambiguity or question of intent or
interpretation arises, this AGREEMENT shall be construed as if drafted jointly by the
PARTIES and no presumption or burden of proof shall arise favoring or disfavoring any
PARTY by virtue of the authorship of any of the provisions of this AGREEMENT. Except
where the context otherwise requires, where used, the singular shall include the
plural, the plural the singular, the use of any gender shall be applicable to all
genders and the word “or” is used in the inclusive sense (and/or). The captions of this
AGREEMENT are for convenience of reference only and in no way define, describe, extend
or limit the scope or intent of this AGREEMENT or the intent of any provision contained
in this AGREEMENT. The term “includes” and “including” as used herein means including,
but not limited to.







	 	22.8	 	ENTIRE AGREEMENT. This AGREEMENT and the Schedules and Exhibit attached
hereto constitute the entire understanding between the PARTIES and supersedes any prior
or contemporaneous written or oral understanding, negotiations or agreements between
and among them respecting the subject matter hereof. This AGREEMENT may not be modified
or amended other than by a writing signed by both PARTIES’ duly authorized officers.
This AGREEMENT shall be binding upon, and inure to the benefit of, the PARTIES and
their respective successors and assigns.





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


78









 






	 	22.9	 	GOVERNING LAW. This AGREEMENT shall be governed by and construed in
accordance with the LAWS of the State of California without regard to its or any other
jurisdiction’s choice of law rules. Any disputes under this AGREEMENT shall be brought
in the state or federal courts located in California. The PARTIES submit to
the personal jurisdiction of such courts for any such action, agree that such courts
provide a convenient forum for any such action, and waive any objections or
challenges to venue with respect to such courts.







	 	22.10	 	PUBLICITY. Neither PARTY shall make any public announcement concerning
this AGREEMENT without the prior written consent of the other PARTY, unless counsel to
such PARTY advises that such announcement or statement may be required by LAW
(including applicable stock exchange rule). In the case of an announcement required by
LAW, the other PARTY shall be advised in advance and both PARTIES shall use good faith
efforts to cause a mutually agreeable announcement to be issued in a timely basis.
Notwithstanding the foregoing, NEKTAR AL and BAXTER shall prepare and issue a joint
press release acceptable to both PARTIES announcing the relationship created under this
AGREEMENT.






[Signature Page Follows.]



 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.





 


79









 





IN WITNESS WHEREOF, the PARTIES hereto have caused their authorized representatives to execute
this AGREEMENT by signing below:



	 	 	 
	Signed:
	 	 
	For and on behalf of:

	 	For and on behalf of:
	NEKTAR Therapeutics AL, Corporation

	 	Baxter Healthcare Corporation
	 
	 	 
	Signature [***]

	 	Signature [***]
	Name: [***]

	 	Name: [***]
	Title: [***]

	 	Title: [***]
	 
	 	 
	For and on behalf of:
	 	 
	Baxter Healthcare SA
	 	 
	 
	 	 
	Signature [***]
	 	 
	Name: [***]
	 	 
	Title: [***]

	 	





 





	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.






 


80











 




AMENDMENT NO. 1 TO EXCLUSIVE RESEARCH, DEVELOPMENT, LICENSE

AND MANUFACTURING AND SUPPLY AGREEMENT




This Amendment No. 1 to Exclusive Research, Development, License and Manufacturing and Supply
Agreement (the “Amendment”) is made and entered into effective as of October 19, 2005 (the
“Effective Date of the Amendment”), by and between Nektar Therapeutics AL, Corporation, (“Nektar”)
and Baxter Healthcare SA and Baxter Healthcare Corporation (collectively, “Baxter”). Nektar and
Baxter may be referred to herein as a “Party” or, collectively, as “Parties.”



RECITALS




WHEREAS, Nektar and Baxter are parties to an Exclusive Research, Development, License and
Manufacturing and Supply Agreement dated September 26, 2005 (the “Agreement”); and




WHEREAS, the Parties desire to amend the Agreement;




NOW, THEREFORE, the Parties agree as follows:



Amendment of the Agreement




The Parties hereby agree to amend the Agreement as of the Effective Date of the Amendment as
provided below. Capitalized terms used in this Amendment that are not otherwise defined herein
shall have the meanings provided in the Agreement.



1. The first sentence of Section 3.1 of the Agreement is hereby amended and restated in its
entirety to read as follows: “To facilitate communication between the PARTIES, implement the
RESEARCH PLAN and oversee development of POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS (all during the
TERM), the PARTIES shall appoint a JOINT STEERING COMMITTEE consisting of [***] representatives
from each of NEKTAR AL and BAXTER. The initial representatives are:




BAXTER: [***]




NEKTAR AL: [***]



and the initial meeting of the JOINT STEERING COMMITTEE shall take place no later than [***] after
the EFFECTIVE DATE.”



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


1









 









2. For clarification purposes only, [***] to the Agreement is hereby amended by the addition of the
following language to the introductory paragraph thereof:



“[***] defined below as [***] shall be a [***], as provided for in the [***] of this
Agreement.”



2. Miscellaneous





	 	a.	 	Full Force and Effect. Except as expressly amended by this Amendment, the
Agreement shall remain unchanged and continue in full force and effect as provided
therein.







	 	b.	 	Entire Agreement of the Parties. This Amendment and the Agreement constitute
the complete final and exclusive understanding and agreement of the Parties with
respect to the subject matter of the Agreement, and supersede any and all prior or
contemporaneous negotiations, correspondence, understandings and agreements, whether
oral or written, between the Parties respecting the subject matter of the Agreement.







	 	c.	 	Counterparts. This Amendment may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one
and the same instrument.






IN WITNESS WHEREOF, the Parties hereto have executed this Amendment in duplicate originals by
their authorized officers as of the Effective Date of the Amendment.



ACCEPTED AND AGREED,




	 	 	 
	NEKTAR THERAPEUTICS AL, CORPORATION

	 	BAXTER HEALTHCARE CORPORATION
	 
	 	 
	By: [***]

	 	By: [***]
	 
	 	 
	Name: [***]

	 	Name: [***]
	 
	 	 
	Title: [***]

	 	Title: [***]
	 
	 	 
	BAXTER HEALTHCARE SA
	 	 
	 
	 	 
	By: [***]
	 	 
	 
	 	 
	Name: [***]
	 	 
	 
	 	 
	Title: [***]
	 	 






 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


2









 









AMENDMENT NO. 2 TO EXCLUSIVE RESEARCH, DEVELOPMENT, LICENSE

AND MANUFACTURING AND SUPPLY AGREEMENT




This Amendment No. 2 to Exclusive Research, Development, License and Manufacturing and Supply
Agreement (the “Amendment”) is made and entered into effective as of December 14, 2005 (the
“Effective Date of the Amendment”), by and between Nektar Therapeutics AL, Corp., an Alabama
corporation (“NEKTAR”) and Baxter Healthcare SA and Baxter Healthcare Corp., (collectively,
“BAXTER”). NEKTAR and BAXTER may be referred to herein as a “Party” or, collectively, as “Parties.”



RECITALS




WHEREAS, NEKTAR and BAXTER are parties to an Exclusive Research, Development, License and
Manufacturing and Supply Agreement dated September 26, 2005, as amended (the “Agreement”); and




WHEREAS, the Parties desire to further amend the Agreement;



NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of which is
hereby acknowledged, the Parties agree as follows:



Amendment of the Agreement




The Parties hereby agree to amend the Agreement as of the Effective Date of the Amendment as
provided below. Capitalized terms used in this Amendment that are not otherwise defined herein
shall have the meanings provided in the Agreement.




	1.	 	A new Section 2.8 is hereby added to the Agreement as follows:






“The PARTIES have agreed to amend the RESEARCH PLAN attached to the Agreement as Schedule 1, [***]
(the “Amended Research Plan”). As more fully described in the Amended Research Plan, the RESEARCH
COMMITTEE is expanding the RESEARCH PLAN [***]. [***] have been approved [***] and will provide
[***] without affecting the RESEARCH PLAN that has already been agreed to by the Parties and
attached to the Agreement as Schedule 1, [***], as set forth hereinbelow, solely for the purpose
[***] shall, for purposes of this Amendment, be referred to as the [***].



Prior to initiating the [***], BAXTER will evaluate the [***]. As already provided for in the
RESEARCH PLAN that has already been agreed to by the Parties and attached to the Agreement
as Schedule 1, [***], will also proceed with [***]. If agreed by the RESEARCH COMMITTEE, [***].



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 3 









 






Pursuant to the Amended Research Plan, (i) NEKTAR has agreed to and shall [***]; (ii) BAXTER shall
use such [***] for the sole purpose of making a [***]; and (iii) BAXTER shall use such [***] for
the sole purpose of conducting [***] as provided for in the Amended Research Plan. In view of the
foregoing, it is further agreed that:




	 	(a)	 	[***] under the Agreement;

	 
	 	(b)	 	[***] of the Agreement; and

	 
	 	(c)	 	[***] as of the EFFECTIVE DATE of the Agreement.






In addition to the foregoing, it is understood and agreed that [***] as provided for in the Amended
Research Plan.



BAXTER further agrees to disclose in writing to NEKTAR all INVENTIONS arising from its activities
under the Amended Research Plan (including those activities relating to manufacture and/or use of
the [***]) as required by and pursuant to Section 16.2 of the Agreement. Moreover, through the
RESEARCH COMMITTEE, BAXTER shall share with NEKTAR data relating to such activities under the
Amended Research Plan as required by and pursuant to Section 3.2 of the Agreement.



It is understood and agreed that other than as specifically provided for in the Agreement, and
herein and in the Amended Research Plan, [***], and carried out under and in accordance with the
RESEARCH PLAN and the Agreement.



Notwithstanding anything herein to the contrary, [***] pursuant to the Agreement.




	2.	 	Miscellaneous







	 	a.	 	Full Force and Effect. Except as expressly amended by this Amendment, the
Agreement shall remain unchanged and continue in full force and effect as provided
therein.







	 	b.	 	Entire Agreement of the Parties. This Amendment and the Agreement constitute
the complete final and exclusive understanding and agreement of the Parties with
respect to the subject matter of the Agreement, and supersede any and all prior or
contemporaneous negotiations, correspondence, understandings and agreements, whether
oral or written, between the Parties respecting the subject matter of the Agreement.









	 	c.	 	Counterparts. This Amendment may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one
and the same instrument.








 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.





 


 4 









 




IN WITNESS WHEREOF, the parties hereto have executed this Amendment in duplicate originals by
their authorized officers as of the Effective Date of the Amendment.



ACCEPTED AND AGREED,




NEKTAR THERAPEUTICS, AL




By: [***]




Name: [***]




Title: [***]




BAXTER HEALTHCARE CORPORATION




By: [***]




Name: [***]




Title: [***]




BAXTER HEALTHCARE SA




By: [***]




Name: [***]




Title: [***]




By: [***]




Name: [***]




Title: [***]






 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.






 


 5 









 







AMENDMENT NO. 3 TO EXCLUSIVE RESEARCH, DEVELOPMENT,

LICENSE AND MANUFACTURING AND SUPPLY AGREEMENT




This Amendment No. 3 to Exclusive Research, Development, License and Manufacturing and Supply
Agreement (the “Amendment”) is made and entered into effective as of December 17, 2007 (the
“Effective Date of the Amendment”), by and between Nektar Therapeutics AL, Corp., an Alabama
corporation (“Nektar AL”) and Baxter Healthcare SA and Baxter Healthcare Corp., (collectively,
“Baxter”). NEKTAR and BAXTER may be referred to herein as a “Party” or, collectively, as “Parties.”



RECITALS




WHEREAS, NEKTAR AL and BAXTER are parties to an Exclusive Research, Development, License and
Manufacturing and Supply Agreement dated September 26, 2005, as amended (the “Agreement”); and




WHEREAS, the Parties desire to further amend the Agreement;



NOW, THEREFORE, in consideration of the foregoing and the covenants and promises contained in
this Amendment and in accordance with and subject to the terms and conditions specified below the
Parties agree as follows:



Amendment of the Agreement




The Parties hereby agree to amend the Agreement as of the Effective Date of the Amendment as
provided below. Capitalized terms used in this Amendment that are not otherwise defined herein
shall have the meanings provided in the Agreement.



Any references to [***] up to but not including the sentence that begins with the words
“[***], shall (as applicable) include the [***].



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 6 









 





All references to ‘the Agreement’ contained in any Section or subsection of the Agreement
shall mean ‘the Agreement (as amended)’.




Section 1.26 is hereby deleted in its entirety and replaced by the following:



““FIELD” means [***], either for use alone for the treatment of [***], in the treatment of
[***]; PEGYLATED FACTOR VIII for the treatment of Hemophilia A; [***] for the treatment of
[***] and/or [***]; and/or PEGYLATED FACTOR IX for the treatment of Hemophilia B.”




Section 1.46 is hereby deleted in its entirety and replaced by the following:




““NEKTAR AL KNOW-HOW” means all [***].”




Section 1.54 is hereby deleted in its entirety and replaced by the following:



“NON-DISCLOSURE AGREEMENTS” means that agreement entered into between the PARTIES on [***],
providing for confidential treatment of the PARTIES’ information, and those agreements entered into
between the PARTIES on [***], providing for confidential treatment of the PARTES’ information.”




Section 1.62 is hereby deleted in its entirety and replaced by the following:



“POTENTIAL PRODUCT” means [***] FACTOR VIII or FACTOR IX, [***] FACTOR VIII or FACTOR IX,
[***].”




A new Section 1.68.A. is hereby added as follows:



“PEG-FIX RESEARCH PLAN” means the PARTIES’ respective activities and responsibilities as set
forth in the research plan attached hereto as Schedule I-A, as amended and revised by the RESEARCH
COMMITTEE from time to time”.




The first sentence of Section 1.70 is hereby amended as follows:




“ROYALTY RATE” for COMMERCIAL PRODUCTS [***] means the following:



(i) [***] of all COMMERCIAL PRODUCTS sold in the TERRITORY in a calendar year;




(ii) [***] of all COMMERCIAL PRODUCTS sold in the TERRITORY in such calendar year; and



(iii) [***] of all COMMERCIAL PRODUCTS sold in the TERRITORY in such calendar year [***].”



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 7 









 








Section 1.80 is hereby deleted in its entirety and replaced by the following:




“THERAPEUTIC AGENT” means [***],FACTOR VIII OR FACTOR IX [***].”




Section 1.82 is hereby deleted in its entirety and replaced by the following:




“VALID PATENT CLAIM” means [***].”




A new Section 1.84 is hereby added as follows:




““FACTOR IX” means a compound that is a Factor IX [***].”




A new Section 1.85 is hereby added as follows:




“ROYALTY RATE” for COMMERCIAL PRODUCTS [***], means the following:



(i) [***] of the [***] of all COMMERCIAL PRODUCTS sold in the TERRITORY in such calendar year;



(ii) [***] of the [***] of all COMMERCIAL PRODUCTS sold in the TERRITORY in such calendar year; and



(iii) [***] of all COMMERCIAL PRODUCTS sold in the TERRITORY in such calendar year [***].”




Section 2.1 is hereby deleted in its entirety and replaced by the following:



“OVERVIEW. The PARTIES’ research and development responsibilities are set forth in the
RESEARCH PLAN and/or the PEG-FIX RESEARCH PLAN (as applicable) each of which shall be an evolving
document that is updated and revised from time to time in writing by the RESEARCH COMMITTEE.



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 8 









 





As decided by the RESEARCH COMMITTEE provided for in Section 3.2, and provided that [***]
(with respect to the PEG-FIX RESEARCH PLAN) each in a timely manner in accordance with the time
frames set forth in the RESEARCH PLAN or the PEG-FIX RESEARCH PLAN (as applicable) as provided for
herein, NEKTAR AL shall, in a timely manner in accordance with the time frames set forth in the
RESEARCH PLAN or the PEG-FIX RESEARCH PLAN (as applicable), [***]. BAXTER shall, in a timely manner
in accordance with the time frames set forth in the RESEARCH PLAN and the PEG-FIX RESEARCH PLAN (as
applicable), provide NEKTAR AL with [***].



NEKTAR AL shall use commercially reasonable efforts to collaborate and cooperate with BAXTER
in researching and developing CONJUGATES and REAGENTS (including SELECTED REAGENTS) to be utilized
in developing POTENTIAL PRODUCTS pursuant to the RESEARCH PLAN and the PEG-FIX RESEARCH PLAN, as
each may be amended from time to time. Initially, [***]. After the RESEARCH COMMITTEE selects one
or more CONJUGATES to develop into POTENTIAL PRODUCTS, the REAGENT that is used to make each such
CONJUGATE shall be deemed a SELECTED REAGENT hereunder, and [***], as set forth in [***] below.



BAXTER is responsible for the development of POTENTIAL PRODUCTS after receipt of the
CONJUGATES and SELECTED REAGENTS, in accordance with the RESEARCH PLAN and/or the PEG-FIX RESEARCH
PLAN (as applicable), and [***].



For clarity, [***]. During such clinical trials, or in the event of the cancellation or
failure of any such clinical trials, [***].”




A new Section 2.2.1 is hereby added as follows:



“NEKTAR AL PAYMENTS. For clarity, Section 2.2 shall apply only with respect to NEKTAR
AL’S activities in relation to [***] PEGYLATED FACTOR VIII [***] and this Section 2.2.1 shall apply
only with respect to NEKTAR AL’S activities in relation to PEGYLATED FACTOR IX. Accordingly, in
addition to the MILESTONES and royalties to be paid by BAXTER to NEKTAR AL under the AGREEMENT,
BAXTER shall reimburse NEKTAR AL for those activities directly incurred and solely associated with
the research, development and/or manufacture of CONJUGATES and REAGENTS (including SELECTED
REAGENTS) for PEGYLATED FACTOR IX at the applicable FTE rate as described in the immediately
following paragraph.



The applicable FTE rate (which includes time, standard supplies and material) shall be charged
and invoiced at [***] for each FTE per year (“PEG-FIX FTE RATE”), subject to the following
increases: the PEG-FIX FTE RATE shall be adjusted each calendar year commencing with calendar year
2009 to reflect any year-to-year increase in the Consumer Price Index (CPI)
(based on a cumulative index of CPI numbers starting on the Effective Date of the Amendment to
the date of the calculation of such PEG-FIX FTE RATE). Moreover, for purposes of work performed by
NEKTAR AL in relation to PEGYLATED FACTOR IX, one (1) FTE will equal [***].


 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


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In addition to the foregoing, BAXTER shall reimburse NEKTAR AL for additional materials
purchased by NEKTAR AL to perform its activities under the PEG-FIX RESEARCH PLAN, [***], which
materials shall be equipment purchased by NEKTAR AL that is required for the performance of its
activities under the PEG-FIX RESEARCH PLAN. The cost of such materials shall not exceed [***].
BAXTER shall respond to such a request by NEKTAR AL promptly, and in no event later than [***]
after its receipt of such request.



NEKTAR AL shall invoice FTE costs (which includes time at the PEG-FIX FTE RATE, standard
supplies and material) and costs of additional materials to BAXTER [***], which BAXTER may audit,
pursuant to Section 10.2 of the AGREEMENT. For clarity, BAXTER shall pay for [***], which shall be
calculated by multiplying (i) [***] pursuant to this Amendment by (ii) the quotient of (a) the
PEG-FIX FTE RATE divided by (b) [***]. BAXTER shall pay the amounts set forth in each such invoice
within [***] after the date thereof.



For clarity, BAXTER shall pay NEKTAR AL as provided for under this Section 2.2.1 for so long
as NEKTAR AL is performing activities under the PEG-FIX RESEARCH PLAN; provided, however, that on a
POTENTIAL PRODUCT-by-POTENTIAL PRODUCT basis, such [***], at which point the [***] and, thereafter,
the [***] used in such POTENTIAL PRODUCT [***] of the AGREEMENT and the SUPPLY AGREEMENT.



For the avoidance of doubt, the PARTIES acknowledge that the [***] that is required to be paid
by BAXTER to NEKTAR AL within [***], as set forth on Schedule II-A, is an [***] by BAXTER of the
FTE costs (which includes time at the PEG-FIX FTE RATE, standard supplies and material) to be paid
by BAXTER pursuant to this Section 2.2.1. Notwithstanding the foregoing, NEKTAR AL shall provide an
invoice to BAXTER as required above which invoice shall set forth a calculation of the FTE costs
totaling [***] and a corresponding credit for the [***]; provided, however, that such calculation
shall only include a total [***].”




The first sentence of Section 2.4.2 is hereby deleted in its entirety and shall be
replaced by the following:



“Any samples of [***] (collectively, the “BAXTER MATERIALS”) are owned exclusively by BAXTER
and provided solely for the development of CONJUGATES and REAGENTS to extend the half-life of a
particular THERAPEUTIC AGENT in conjunction with the RESEARCH PLAN or the PEG-FIX RESEARCH PLAN (as
applicable), and for no other purpose.”


 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 10 









 






A new Section 2.6.1 is hereby added as follows:



“SELECTION OF PEGYLATED FACTOR IX POTENTIAL PRODUCTS AND [***]. The RESEARCH COMMITTEE
shall select PEGYLATED FACTOR IX POTENTIAL PRODUCT(S) from the CONJUGATES and SELECTED REAGENTS
provided by NEKTAR AL under the PEG-FIX RESEARCH PLAN and, [***].”



The first paragraph of Section 3.2 is hereby deleted in its entirety and replaced by the
following:



“RESEARCH COMMITTEE. The RESEARCH COMMITTEE shall be comprised of appropriate
representatives of both PARTIES, initially consisting of [***] representatives from each of NEKTAR
AL and BAXTER. Each PARTY shall appoint a RESEARCH PLAN team leader (and other key contacts, as
necessary) to serve as principal RESEARCH COMMITTEE liaisons for the PARTIES. Employees of each
PARTY who are not on the RESEARCH COMMITTEE may attend meetings of the RESEARCH COMMITTEE, as
required to further the research and development of POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS. The
initial team leader and PARTY representatives are:



BAXTER: (1) [***]




NEKTAR AL: (1) [***].”





A new Section 3.6 is hereby added as follows:




“3.6.1 [***].



3.6.2 Disbanding of Committees. [***], the PARTIES shall have the right to disband any
committee upon mutual agreement. Additionally, to the extent the applicable committee is not
disbanded, such committees shall be automatically disbanded, as applicable, as set forth below:



(i) The JOINT STEERING COMMITTEE shall be automatically disbanded upon [***].



(ii) The DEVELOPMENT AND PRODUCTION COMMITTEE shall be automatically disbanded when [***].



(iii) The RESEARCH COMMITTEE shall be automatically disbanded upon [***].



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


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3.6.3 Decision Making After [***] or Disbanding of Committees. If [***], or if a
committee is disbanded pursuant to Section 3.6.2, then after such [***] disbanding, the following
shall apply to decisions formerly within the jurisdiction of the committee(s) [***] or that has
been disbanded:



(a) Decisions formerly within the jurisdiction of the JOINT STEERING COMMITTEE shall be
submitted for resolution by senior officers of each PARTY, subject to the decision making processes
and principles set forth in Section 3.1 applied to decisions to be made by such senior officers
rather than to decisions to be made by the JOINT STEERING COMMITTEE.



(b) Decisions formerly within the jurisdiction of the DEVELOPMENT AND PRODUCTION COMMITTEE
shall be submitted for resolution by the JOINT STEERING COMMITTEE, if it then exists, or otherwise
by senior officers appointed by each PARTY as described in Section 3.6.3(a).



(c) Decisions formerly within the jurisdiction of the RESEARCH COMMITTEE shall be submitted
for resolution by the JOINT STEERING COMMITTEE, if it then exists, or otherwise by senior officers
appointed by each PARTY as described in Section 3.6.3(a).



Notwithstanding the amendments to the decision making structure as set forth in this Section
3.6.3, with respect to all decisions that would have been within the jurisdiction of the Research
Committee BAXTER shall retain the deciding vote pursuant to Section 3.2 of the Agreement.”



Section 4.2 is hereby amended by deleting the first paragraph through subsection (iii) and
replacing it with the following:



“TERMS OF SUBLICENSE. The terms of each sublicense under the license granted to BAXTER in
Section 4.1 of this AGREEMENT shall provide that any sublicense shall be subject to and consistent
with the terms and conditions of this AGREEMENT; provided, however, that:



(i) all royalties or other amounts due to NEKTAR AL with respect to such SUBLICENSEE’S development
and/or commercialization of POTENTIAL PRODUCTS or
COMMERCIAL PRODUCTS shall be collected by BAXTER and transmitted to NEKTAR AL in accordance with
the payment terms set forth in Article 9.



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


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(ii) BAXTER’S grant of any sublicense shall not relieve BAXTER from any of its obligations under
this AGREEMENT; and



(iii) BAXTER shall remain jointly and severally liable for any breach of a sublicense by a
SUBLICENSEE.”



Section 4.3 is hereby amended by deleting subsection (iii) of the first paragraph and deleting
the second and third full paragraphs.




A new Section 7.2.1 is hereby added as follows:



“For clarity, Section 7.2 shall apply with respect to the activities of BAXTER, its AFFILIATES
or SUBLICENSEES in relation to the development, manufacture or commercialization of POTENTIAL
PRODUCTS and/or COMMERCIAL PRODUCTS utilizing (directly or indirectly) [***]. For good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged by BAXTER), with respect
to the activities of BAXTER, its AFFILIATES and SUBLICENSEES in relation to the development,
manufacture or commercialization of [***], BAXTER agrees to partner exclusively with NEKTAR AL in
the FIELD. Specifically, during the TERM, [***] other than as provided for in this Amendment or
[***], anywhere in the TERRITORY. [***].



Nothing set forth in this Section 7.2.1 shall prohibit BAXTER from owning not in excess of 5%
in the aggregate of any class of capital stock of any corporation if such stock is publicly traded
and listed on any national or regional stock exchange or on the NASDAQ national market system or
the NASDAQ Small Cap Market.



In the event that the provisions of Sections 7.1, 7.2 or 7.2.1 should ever be deemed to exceed
the limitation provided by applicable law, then the PARTIES agree that such provisions shall be
reformed to set forth the maximum limitations permitted.”



Section 8.6.1 is hereby amended as follows:



“From the date of selection of a SELECTED REAGENT until the earlier of the date of
commencement of a PIVOTAL TRIAL or the date on which the PARTIES enter into the SUPPLY AGREEMENT
for such SELECTED REAGENT, BAXTER shall pay NEKTAR AL its MANUFACTURING COST [***] for each
SELECTED REAGENT supplied to BAXTER [***] (“PURCHASE PRICE”). BAXTER shall be entitled to audit
such MANUFACTURING COST pursuant to Section 10.2.”



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


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The first paragraph of Section 9.1 (up to but excluding subsection (i)) is hereby deleted in its entirety and is replaced with the following:



“BAXTER shall pay to NEKTAR AL MILESTONES in accordance with and pursuant to the events
described in Schedule II (with respect to POTENTIAL PRODUCT and/or COMMERCIAL PRODUCT ([***]) and
in Schedule II-A (with respect to [***], each as the case may be. Each such applicable MILESTONE
shall be payable at the time the corresponding event occurs, and due within [***] of the event
triggering such MILESTONE. Except as set forth in the last paragraph of Section 2.2.1, MILESTONE
payments shall not be advance payments against any royalties or other payments due and payable
hereunder, but shall be in addition to any royalty or other payments due under the AGREEMENT and
this Amendment. In the event BAXTER [***].”




A new Section 9.1.5 is hereby added as follows:



“[***] MILESTONES FOR THE DEVELOPMENT AND COMMERCIALIZATION OF ONE COMMERCIAL PRODUCT FOR
THE TREATMENT OF HEMOPHILIA B. The MILESTONES that are provided for under Schedule II-A shall
apply with respect to the first POTENTIAL PRODUCT being developed for Hemophilia B using FACTOR IX
as the THERAPEUTIC AGENT that achieves each such MILESTONE, and the first COMMERCIAL PRODUCT
receiving MARKETING AUTHORIZATION having a label indication for the treatment of Hemophilia B using
FACTOR IX as the THERAPEUTIC AGENT. Such POTENTIAL PRODUCT and COMMERCIAL PRODUCT for the treatment
of Hemophilia B using FACTOR IX as the THERAPEUTIC AGENT may be the same, but in the event they are
not, [***]. For clarity, additional milestone payments may be payable by BAXTER in accordance with
the provisions of Section 9.1.6.




For clarity, BAXTER or its AFFILIATE or SUBLICENSEE, at BAXTER’S discretion, shall be [***].



NEKTAR AL shall not be entitled to additional MILESTONES for additional label claims that are
obtained by BAXTER or its AFFILIATE or SUBLICENSEE for then-existing COMMERCIAL PRODUCTS for the
treatment of Hemophilia B using FACTOR IX as the THERAPEUTIC AGENT. [***].



For the avoidance of doubt, NEKTAR AL shall not be entitled to the payment of any MILESTONES
with respect to any POTENTIAL PRODUCT or COMMERCIAL PRODUCT developed for [***] as the THERAPEUTIC
AGENT, unless those milestones to be negotiated under Section 9.1.2 have not yet been paid when the
MILESTONE events occur with [***]”.



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 14 









 






A new Section 9.1.6 is hereby added as follows:



“ADDITIONAL MILESTONES FOR THE COMMERCIALIZATION OF MORE THAN ONE COMMERCIAL PRODUCT FOR
THE TREATMENT OF HEMOPHILIA B. After the receipt of MARKETING AUTHORIZATION for the first
FACTOR IX COMMERCIAL PRODUCT for the treatment of Hemophilia B (using FACTOR IX as the THERAPEUTIC
AGENT), NEKTAR AL shall be entitled to receive milestone payments in addition to the MILESTONES
provided for in Schedule II-A, for each additional POTENTIAL PRODUCT with a label indication for
the treatment of Hemophilia B using FACTOR IX as the THERAPEUTIC AGENT, for which BAXTER or its
AFFILIATE or SUBLICENSEE receives a new MARKETING AUTHORIZATION in the United States and/or
European Union. With respect to any additional POTENTIAL PRODUCTS that are FACTOR IX half-life
extension products, additional milestone payments shall be made upon the successful completion of a
PIVOTAL TRIAL in adults for each such additional POTENTIAL PRODUCT and for each MARKETING
AUTHORIZATION received in the United States and/or European Union for each such additional
POTENTIAL PRODUCT. [***] for each such additional POTENTIAL PRODUCT, provided that the [***] for
each such additional POTENTIAL PRODUCT [***] per POTENTIAL PRODUCT.




[***].



For the avoidance of doubt, a modified COMMERCIAL PRODUCT (including, but not limited to,
modified with respect to formulation, presentation, packaging or dosage strength) shall not be
considered an additional COMMERCIAL PRODUCT and NEKTAR AL shall not be entitled to any additional
milestone payments pursuant to Section 9.1.2 or pursuant to Section 9.1.6 upon the
commercialization of any such modified COMMERCIAL PRODUCT if such
COMMERCIAL PRODUCT uses the same THERAPEUTIC AGENT and SELECTED REAGENT as the unmodified
COMMERCIAL PRODUCT.”



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.






 


 15 









 






The first paragraph of Section 9.2 (up to but excluding Section 9.2.1) is hereby
deleted in its entirety and replaced with the following:



“ROYALTIES. With respect to COMMERCIAL PRODUCTS that either (a) contain a chemical
entity resulting from attachment of [***] to a SELECTED REAGENT by means of PEGYLATION that is
selected by the RESEARCH COMMITTEE, or (ii) use PEGYLATION to [***], whether by using PEGYLATION
technology [***], BAXTER shall pay NEKTAR AL royalties in an amount equal to the product of the
applicable ROYALTY RATE and the annual aggregate NET SALES of all such COMMERCIAL PRODUCTS on a
COMMERCIAL PRODUCT-by-COMMERCIAL PRODUCT and country-by-country basis for an initial period of
[***] from the FIRST COMMERCIAL SALE of the applicable COMMERCIAL PRODUCT in the applicable country
(the “INITIAL ROYALTY TERM”). Royalties shall be paid during the INITIAL ROYALTY TERM in each and
every country where such COMMERCIAL PRODUCT is sold, without regard to whether a VALID PATENT CLAIM
covers the composition, manufacture, use, sale, offer for sale or import of the COMMERCIAL PRODUCT
or the SELECTED REAGENT contained in such COMMERCIAL PRODUCT.



With respect to COMMERCIAL PRODUCTS that either (a) contain a chemical entity resulting from
attachment of FACTOR IX to a SELECTED REAGENT by means of PEGYLATION that is selected by the
RESEARCH COMMITTEE, or (b) use PEGYLATION to extend or otherwise improve the half-life of FACTOR
IX, BAXTER shall pay NEKTAR AL royalties in an amount equal to the product of the applicable
ROYALTY RATE and the annual aggregate NET SALES of all such COMMERCIAL PRODUCTS on a COMMERCIAL
PRODUCT-by-COMMERCIAL PRODUCT and country-by-country basis for an initial period of [***] from the
FIRST COMMERCIAL SALE of the applicable COMMERCIAL PRODUCT in the applicable country (the “PEG-FIX
INITIAL ROYALTY TERM”). Royalties shall be paid during the PEG-FIX INITIAL ROYALTY TERM in each and
every country where such COMMERCIAL PRODUCT is sold, without regard to whether a VALID PATENT CLAIM
covers the composition, manufacture, use, sale, offer for sale or import of the COMMERCIAL PRODUCT
or the SELECTED REAGENT contained in such COMMERCIAL PRODUCT.”



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 16 









 






Section 9.2.1 is hereby deleted in its entirety and replaced by the following:



“After the expiration of the INITIAL ROYALTY TERM or PEG-FIX INITIAL ROYALTY TERM, as the case
may be, for a particular COMMERCIAL PRODUCT in a particular country, BAXTER shall continue to pay
such royalties on NET SALES of such COMMERCIAL PRODUCT on a world-wide basis provided that there
exists, in each of the
following major markets in which MARKETING AUTHORIZATION is received for such COMMERCIAL
PRODUCT, a VALID PATENT CLAIM which would be infringed by the composition, making, using, having
made, offering for sale, sale or importation of such COMMERCIAL PRODUCT or the SELECTED REAGENT
contained in such COMMERCIAL PRODUCT: [***] (collectively, “MAJOR MARKETS”). Such royalties shall
be paid on NET SALES of COMMERCIAL PRODUCTS in those countries where the composition, manufacture,
import, use, offer for sale or sale of the applicable COMMERCIAL PRODUCT or the SELECTED REAGENT
contained in such COMMERCIAL PRODUCT is not covered by a VALID PATENT CLAIM, provided that the
composition, manufacture, import, use, offer for sale or sale of such applicable COMMERCIAL PRODUCT
or such SELECTED REAGENT is covered by a VALID PATENT CLAIM in each of the MAJOR MARKETS. [***].”




Section 9.2.2 is hereby deleted in its entirety and replaced by the following:



“If, at the time of sale of a COMMERCIAL PRODUCT in a particular country after the expiration
of the INITIAL ROYALTY TERM or PEG-FIX INITIAL ROYALTY TERM, as the case may be, in such country,
there is no VALID PATENT CLAIM covering the composition, manufacture, use, import, offer for sale
or sale of such COMMERCIAL PRODUCT or the SELECTED REAGENT contained in such COMMERCIAL PRODUCT in
each of the MAJOR MARKETS, then BAXTER shall only owe royalties with respect to NET SALES of
COMMERCIAL PRODUCTS in those countries in which a VALID PATENT CLAIM covers the composition,
manufacture, use, import, offer for sale or sale of such COMMERCIAL PRODUCTS or the SELECTED
REAGENT contained in such COMMERCIAL PRODUCTS in such countries. [***].”




Section 9.2.3 is hereby deleted in its entirety and replaced by the following:



“The PARTIES agree that a VALID PATENT CLAIM exists, for purposes of determining whether
royalties are payable after the expiration of the INITIAL ROYALTY TERM or PEG-FIX INITIAL ROYALTY
TERM, as the case may be, even if components of a COMMERCIAL PRODUCT are sold separately as more
fully described in Section 9.3 below, and the only VALID PATENT CLAIM covers the composition,
manufacture, use, sale, offer for sale or import of only one component of such COMMERCIAL PRODUCT
([***]).”



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 17 









 






Section 9.4 is hereby deleted in its entirety and replaced by the following:



“COMMERCIAL DILIGENCE FOR COMMERCIAL PRODUCTS FOR THE TREATMENT OF HEMOPHILIA A. If,
during the TERM, BAXTER sells or markets another FACTOR VIII extended half-life product using a
non-PEGYLATION technology which is used to treat Hemophilia A, then BAXTER must meet the COMMERCIAL
DILIGENCE THRESHOLD, as set forth below. No later than [***] after the FIRST COMMERCIAL SALE
of a COMMERCIAL PRODUCT for the treatment of Hemophilia A, where [***] is the THERAPEUTIC
AGENT, in each MAJOR MARKET in which MARKETING AUTHORIZATION has been obtained, the sales ([***])
of all such COMMERCIAL PRODUCTS in the aggregate shall constitute [***] of the total sales ([***])
of all FACTOR VIII extended half-life products used to treat Hemophilia A in such MAJOR MARKET (the
“COMMERCIAL DILIGENCE THRESHOLD”). If sales ([***]) of such COMMERCIAL PRODUCTS, in the aggregate,
do not meet the COMMERCIAL DILIGENCE THRESHOLD in such MAJOR MARKET within such timeframe, then
NEKTAR AL may, [***], upon written notice to BAXTER, [***]. In the event NEKTAR AL [***], the
ROYALTY RATE to which NEKTAR AL is otherwise entitled shall be [***] for all NET SALES of all
COMMERCIAL PRODUCTS [***]. The terms of any such co-promotion agreement shall be negotiated in good
faith by the PARTIES, and shall include minimum co-promotion requirements and shall provide that
[***].”




A new Section 9.4.1 is hereby added as follows:



“COMMERCIAL DILIGENCE FOR COMMERICAL PRODUCTS FOR THE TREATMENT OF HEMOPHILIA B. If,
during the TERM, BAXTER sells or markets another FACTOR IX extended half-life product using a
non-PEGYLATION technology which is used to treat Hemophilia B, then BAXTER must meet the COMMERCIAL
DILIGENCE THRESHOLD, as set forth below. No later than [***] after the FIRST COMMERCIAL SALE of a
COMMERCIAL PRODUCT for the treatment of Hemophilia B using FACTOR IX as the THERAPEUTIC AGENT, in
each MAJOR MARKET in which MARKETING AUTHORIZATION has been obtained, the sales ([***]) of all such
COMMERCIAL PRODUCTS in the aggregate shall constitute [***] of the total sales ([***]) of all
FACTOR IX extended half-life products used to treat Hemophilia B in such MAJOR MARKET (the
“COMMERCIAL DILIGENCE THRESHOLD”). If sales ([***]) of such COMMERCIAL PRODUCTS, in the aggregate,
do not meet the COMMERCIAL DILIGENCE THRESHOLD in such MAJOR MARKET within such timeframe, then
NEKTAR AL may, [***], upon written notice to BAXTER, [***]. In the event NEKTAR AL [***] such
FACTOR IX COMMERCIAL PRODUCTS, the ROYALTY RATE to which NEKTAR AL is otherwise entitled shall be
[***] for all NET SALES of all COMMERCIAL PRODUCTS [***]. The terms of any such co-promotion
agreement shall be negotiated in good faith by the PARTIES, and shall include minimum co-promotion
requirements and shall provide that [***].”



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


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A new Section 9.4.2 is hereby added as follows:



“COMMERCIAL DILIGENCE FOR COMMERICIAL PRODUCTS FOR THE TREATMENT OF HEMOPHILIA A AND/OR
B. If, during the TERM, BAXTER sells or markets another [***] extended half-life product [***]
which is used to treat Hemophilia A
and/or Hemophilia B, then BAXTER must meet the COMMERCIAL DILIGENCE THRESHOLD, as set forth
below. No later than [***] after the FIRST COMMERCIAL SALE of a COMMERCIAL PRODUCT for the
treatment of Hemophilia A or Hemophilia B using [***] as the THERAPEUTIC AGENT, in each MAJOR
MARKET in which MARKETING AUTHORIZATION has been obtained, the sales ([***]) of all such COMMERCIAL
PRODUCTS in the aggregate shall constitute [***] of the total sales ([***]) of all [***] extended
half-life products used to treat Hemophilia A and/or Hemophilia B in such MAJOR MARKET (the
“COMMERCIAL DILIGENCE THRESHOLD”). If sales ([***]) of such COMMERCIAL PRODUCTS, in the aggregate,
do not meet the COMMERCIAL DILIGENCE THRESHOLD in such MAJOR MARKET within such timeframe, then
NEKTAR AL may, [***], upon written notice to BAXTER, [***] COMMERCIAL PRODUCTS in such MAJOR
MARKET. In the event NEKTAR AL [***] COMMERCIAL PRODUCTS, the ROYALTY RATE to which NEKTAR AL is
otherwise entitled shall be [***] for all NET SALES of all COMMERCIAL PRODUCTS [***]. The terms of
any such co-promotion agreement shall be negotiated in good faith by the PARTIES, and shall include
minimum co-promotion requirements and shall provide that [***].”




A new Section 9.7 is hereby added as follows:



“OPTION TO ACQUIRE ADDITONAL LICENSE. In addition to the license granted by NEKTAR AL to
BAXTER under Section 4.1, BAXTER may wish to exercise an option to enter into negotiations with
NEKTAR AL to acquire an additional license (the “OPTION”). The conditions under which such OPTION
may be exercised, and certain of the terms of such license, [***]. The PARTIES acknowledge and
agree that the [***].”



References to NON-DISCLOSURE AGREEMENT in Article 11 are hereby made plural. Any reference to
BAXTER MATERIALS and NEKTAR AL MATERIALS in Article 11 includes BAXTER FIX MATERIALS and NEKTAR AL
PEG-FIX MATERIALS.



The first sentence of Section 17.2.2A. is hereby deleted in its entirety and replaced by the
following:



“NEKTAR AL shall have the right, but not the obligation, to carry out actions against THIRD
PARTIES arising from such THIRD PARTIES’ infringement or misappropriation of NEKTAR AL LICENSED
TECHNOLOGY covering the composition, manufacture, use, import, offer for sale or sale of a SELECTED
REAGENT.”




 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 19 









 





Section 19.2 is hereby deleted in its entirety and replaced by the following:



“DISCRETIONARY TERMINATION. BAXTER may terminate this AGREEMENT



(i) in its entirety, other than pursuant to any other provision of this AGREEMENT, at any time,
without any liability other than payment of the TERMINATION FEES, if applicable, payable in
accordance with both Sections 19.7.5 and 19.7.6, upon [***] to NEKTAR AL;



(ii) in part, upon [***] to NEKTAR AL, with respect to the development and/or commercialization of
POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS utilizing (directly or indirectly) [***], other than
pursuant to any other provision of this AGREEMENT, at any time, without any liability other than
payment of the TERMINATION FEE, if applicable, payable in accordance with Section 19.7.5; or



(iii) in part, upon [***] to NEKTAR AL, with respect to the development and/or commercialization of
POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS utilizing (directly or indirectly) [***], other than
pursuant to any other provision of this AGREEMENT, at any time, without any liability other than
payment of the TERMINATION FEE, if applicable, payable in accordance with Section 19.7.6.”




Section 19.3 is hereby amended by adding the following to the end of the existing
text:



“Notwithstanding the foregoing, if the failure to comply relates [***], the non-breaching
party may only terminate the AGREEMENT in part with respect to all of the THERAPEUTIC AGENTS
specified in (a), or with respect to the THERAPETIC AGENT specified in (b). If the failure to
comply relates to both (c) [***], the non-breaching party [***].”




The first two paragraphs of Section 19.5 are hereby deleted in their entirety and
replaced by the following:



“In the event [***] (each such failure to meet and lack of extension hereinafter referred to
as a “DILIGENCE DEFECT”), then [***]:



(i) at its option, terminate this AGREEMENT in part with respect to [***], if the DILIGENCE DEFECT
relates to a Development Diligence milestone set forth in Schedule IV;



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 20 









 





(ii) at its option, terminate this AGREEMENT in part with respect to [***], if the DILIGENCE DEFECT
relates to a Development Diligence milestone set forth in Schedule IV-A; or



(iii) at its option, terminate this AGREEMENT [***] DILIGENCE DEFECT relating to a Development
Diligence milestone set forth in Schedule IV and a DILIGENCE DEFECT relating to a Development
Diligence milestone set forth in Schedule IV-A.



In the event [***], Section 7.1 shall no longer apply with respect to that portion of the
AGREEMENT and those THERAPEUTIC AGENTS that have been so [***], but the royalties and MILESTONES
provided for herein shall continue to apply except as otherwise set forth in Section 19.5.2.
Notwithstanding the foregoing, before [***] under this Section 19.5, [***] shall call a special
meeting of the JOINT STEERING COMMITTEE for the [***]. Such special meeting of the JOINT STEERING
COMMITTEE shall be held as soon as practicable, but in no event later than [***] from the date on
which [***] requests such meeting. At any time during the period commencing on the conclusion of
such meeting up through the date that is [***] and [***] after the applicable milestone date,
[***]. Thereafter, [***] to either cure (by meeting such Development Diligence milestone event) or
to extend the milestone date by the duration of the applicable extension period set forth in
Schedule IV or Schedule IV-A (as applicable), by providing written notice of its intent to extend
and by paying the applicable extension payment within [***] thereafter. For clarity, the extension
period shall commence at the end of the [***].”




Subsection G. of Section 19.5.1 is hereby deleted its entirety and replaced by the following:




“G. [***].”




A new Section 19.7.6 is hereby added as follows:



“For clarity, Section 19.7.5 shall apply with respect to termination of the AGREEMENT by
BAXTER in its entirety pursuant to Section 19.2(i) or in part under Section 19.2(ii). If
BAXTER terminates the AGREEMENT in its entirety pursuant to Section 19.2(i) or in part under
Section 19.2(iii), or if NEKTAR AL terminates the AGREEMENT in its entirety or in part (with
respect to FACTOR IX) under Section 19.3(b), or if NEKTAR AL terminates the AGREEMENT in part
([***], then BAXTER shall pay to NEKTAR AL a termination fee (“PEG-FIX TERMINATION FEE”) within
[***] after the effective date of such termination as follows:



(a) If termination occurs after the [***], BAXTER shall pay NEKTAR AL a PEG-FIX TERMINATION
FEE of [***];




 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 21 









 




(b) If termination occurs after the [***], BAXTER shall pay NEKTAR AL a PEG-FIX TERMINATION
FEE of [***]; and



(c) If termination occurs after the [***], BAXTER shall pay NEKTAR AL a PEG-FIX TERMINATION
FEE of [***].



If BAXTER terminates the AGREEMENT in its entirety under Section 19.2(i), BAXTER shall pay
NEKTAR AL both the TERMINATION FEE due and owing to NEKTAR AL under Section 19.7.5, and the PEG-FIX
TERMINATION FEE due and owing to NEKTAR AL under this Section 19.7.6. If NEKTAR AL terminates the
AGREEMENT in its entirety under Section 19.3, BAXTER shall pay NEKTAR AL [***]. If NEKTAR AL
terminates the AGREEMENT in part under Section 19.3(a) ([***]), BAXTER shall pay NEKTAR AL [***].
If NEKTAR AL terminates the AGREEMENT in part under Section 19.3(b) ([***]), BAXTER shall pay
NEKTAR AL [***].



Notwithstanding the foregoing, if BAXTER terminates the AGREEMENT in part under Section
19.2(iii) due to a COMMERCIAL FAILURE, the TERMINATION FEE set forth in this Section 19.7.6 [***].
“COMMERCIAL FAILURE” means:



(i) [***], as defined by the RESEARCH COMMITTEE;




(ii) [***];



(iii) [***];



(iv) [***];



(v) [***];



(vi) [***].



For clarity, if the AGREEMENT is terminated by BAXTER in part under Section 19.2(iii) due to a
COMMERCIAL FAILURE, there shall be [***].”




 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 22 









 






Miscellaneous



a. Full Force and Effect. Except as expressly amended by this Amendment, the
AGREEMENT shall remain unchanged and continue in full force and effect as provided therein.



b. Entire Agreement of the Parties. This Amendment and the AGREEMENT
constitute the complete final and exclusive understanding and agreement of the PARTIES with
respect to the subject matter of the AGREEMENT, and supersede any and all prior or contemporaneous
negotiations, correspondence, understandings and agreements, whether oral or written, between the
PARTIES respecting the subject matter of the AGREEMENT.



c. Counterparts. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and
the same instrument. One or more counterparts of this Amendment may be executed my facsimile or
other electronic means.



[Signature Page Follows]



 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 23 









 




[Signature Page to Amendment No. 3]




IN WITNESS WHEREOF, the parties hereto have executed this Amendment in duplicate originals by
their authorized officers as of the Effective Date of the Amendment.



	 	 	 	 	 	 	 	 	 
	ACCEPTED AND AGREED,	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	NEKTAR THERAPEUTICS AL, CORP.	 	 	 	BAXTER HEALTHCARE SA
	 
	 	 	 	 	 	 	 	 
	By:
	 	[***]	 	 	 	By:	 	[***]
	 
	 	 	 	 	 	 
	 
	 	Signature	 	 	 	 	 	Signature
	Name:
	 	[***]	 	 	 	Name:	 	[***]
	 
	 	 	 	 	 	 
	 
	 	Printed	 	 	 	 	 	Printed
	Title:
	 	[***]	 	 	 	Title:	 	[***]
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BAXTER HEALTHCARE CORPORATION	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	[***]	 	 	 	By:	 	[***]
	 
	 	 	 	 	 	 
	 
	 	Signature	 	 	 	 	 	Signature
	Name:
	 	[***]	 	 	 	Name:	 	[***]
	 
	 	 	 	 	 	 
	 
	 	Printed	 	 	 	 	 	Printed
	Title:
	 	[***]	 	 	 	Title:	 	[***]
	 
	 	 	 	 	 	 








 






	 	 	 
	[***]	 	indicates that certain information contained herein has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.




 


 









 





***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




Execution Copy




AMENDMENT NO. 4 TO EXCLUSIVE RESEARCH, DEVELOPMENT, LICENSE AND 

MANUFACTURING AND SUPPLY AGREEMENT




This Amendment No. 4 to Exclusive Research, Development, License and Manufacturing and Supply
Agreement (the “Amendment”) is made and entered into and is effective as of 11:59 pm on December
31, 2008 (the “Effective Date of Amendment No. 4), by and between Nektar Therapeutics AL, Corp., an
Alabama corporation (“Nektar AL”) and Baxter Healthcare SA and Baxter Healthcare Corp.,
(collectively, “Baxter”). NEKTAR and BAXTER may be referred to herein as a “Party” or,
collectively, as “Parties.”



RECITALS




WHEREAS, NEKTAR AL and BAXTER are parties to an Exclusive Research, Development, License and
Manufacturing and Supply Agreement dated as of September 26, 2005, and amended as of October 19,
2005, December 14, 2005, and December 17, 2007 (the “Agreement”); and




WHEREAS, the Parties desire to further amend the Agreement;



NOW, THEREFORE, in consideration of the foregoing and the covenants and promises contained in
this Amendment and in accordance with and subject to the terms and conditions specified below the
Parties agree as follows:



Amendment of the Agreement




The Parties hereby agree to amend the Agreement as of the Effective Date of Amendment No. 4
as provided below. Capitalized terms used in this Amendment that are not otherwise defined herein
shall have the meanings provided in the Agreement.




	 	1.	 	All references to ‘the Agreement’ contained in any Section or subsection of the
Agreement shall mean ‘the Agreement (as amended)’.







	 	2.	 	New Section 1.86 is added to the Agreement, as follows:







“1.86 ‘EXCLUSIVE LICENSE AGREEMENT’ shall mean that certain Exclusive License Agreement
dated as of December 31, 2008, by and among Nektar and Baxter.”




	 	3.	 	The Parties agree to add a new Section 2.2.2 to the Agreement, as follows;







“[***]. BAXTER agrees that as of [***], BAXTER shall have expended an
aggregate amount of at least [***] in actual cash payments to NEKTAR AL for research
and development costs directly incurred and solely associated with the development of
[***]. BAXTER’s obligation to pay any remaining unpaid portion of the [***] shall
terminate in the event of [***].”


 


 









 




***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





	 	4.	 	The Parties agree to amend Section 36 of Amendment No. 3 of the Agreement, amending
Section 19.2(ii) of the Agreement by deleting the present Section 19.2(ii) in its entirety
and replacing it with the following:







“(ii) Subject to the limitation on termination in part of this AGREEMENT by BAXTER set
forth in Section 19.2(iv), upon [***] to NEKTAR AL, with respect to the development
and/or commercialization of POTENTIAL PRODUCTS and COMMERCIAL PRODUCTS utilizing
(directly or indirectly) [***], other than pursuant to any other provision of this
AGREEMENT, which termination may be effected in whole or in part for any one or more of
[***], at any time, without any liability other than payment of the [***], if
applicable, payable in accordance with Section 19.7.5 (which [***] otherwise due and
payable to NEKTER AL in the event of a termination effected in whole shall be prorated
in the case of a termination in part on the following basis: [***];”




	 	5.	 	The Parties agree to amend Section 36 of Amendment No. 3 of the Agreement to add the
following Subsection (iv) to Section 19.2 of the Agreement:







“Notwithstanding anything in this AGREEMENT seemingly to the contrary, BAXTER agrees
that it will not terminate this AGREEMENT in whole or in part pursuant to Section 19.2
prior to [***], except for [***].”




	 	6.	 	The Parties agree to add a new Section 23 to the Agreement, as follows:







“23. ALTERNATIVE DISPUTE RESOLUTION.






	 	a.	 	
 Mediation. The PARTIES agree that any and all disputes, claims or
controversies arising out of or relating to this AGREEMENT shall be submitted to [***]
for mediation, and if the matter is not resolved through mediation, then it shall be
submitted to [***] for final and binding arbitration pursuant to the arbitration clause
set forth in Section 23(b) below; provided, however, that either PARTY may apply to any
court of appropriate jurisdiction to seek equitable relief without the requirement of
pursuing arbitration pursuant to Section 23(b).









	 	b.	 	 Arbitration.










	 	i.	 	 The PARTIES shall attempt to resolve any and all disputes, claims or
controversies arising out of or relating to this AGREEMENT promptly by
negotiation between executives who have authority to settle the controversy.
If such disputes, claims or controversies are not resolved through such
negotiation, then they shall be submitted for final and binding arbitration
pursuant to the arbitration clause set forth below. Either PARTY may
initiate arbitration with respect to the matters
submitted to negotiation by filing a written demand for arbitration at any
time following the initial negotiation session.











 


 









 





***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




	 	ii.	 	 To the extent not resolved by mediation, any dispute, claim or
controversy arising out of or relating to this AGREEMENT or the breach,
termination, enforcement, interpretation or validity thereof, including the
determination of the scope or applicability of this AGREEMENT to arbitrate,
shall be determined by arbitration conducted in the English language. The
arbitration shall take place in [***]. The arbitration shall be
administered by [***] pursuant to its Arbitration Rules and Procedures.
References herein to any arbitration rules or procedures mean such rules or
procedures as amended from time to time, including any successor rules or
procedures, and references herein to the [***] include any successor
thereto. The arbitration shall be before [***] arbitrators. [***]. All
[***] arbitrators shall have experience in the area under dispute. This
arbitration provision, and the arbitration itself, shall be governed by the
laws of the [***], and [***] the Federal Arbitration Act, 9 U.S.C. §§ 1-16.











	 	iii.	 	 Consistent with the expedited nature of arbitration, each PARTY will,
upon the written request of the other PARTY, promptly provide the other with
copies of documents on which the producing PARTY may rely in support of or
in opposition to any claim or defense. At the request of a PARTY, the
arbitrators shall have the discretion to order examination by deposition of
witnesses to the extent the arbitrator deems such additional discovery
relevant and appropriate. Depositions shall be limited to a maximum of [***]
per PARTY and shall be held within [***] days of the grant of a request.
Additional depositions may be scheduled only with the permission of the
arbitrators, and for good cause shown. Each deposition shall be limited to a
maximum of [***] duration. All objections are reserved for the arbitration
hearing except for objections based on privilege and proprietary or
confidential information. The PARTIES shall not utilize any other discovery
mechanisms, including international processes and U.S. federal statutes, to
obtain additional evidence for use in the arbitration. Any dispute regarding
discovery, or the relevance or scope thereof, shall be determined by the
arbitrators, which determination shall be conclusive. All discovery shall be
completed within [***] days following the appointment of the arbitrators.
All costs and/or fees relating to the retrieval, review and production of
electronic discovery shall be paid by the PARTY requesting such discovery.















	 	iv.	 	 The panel of arbitrators shall have no power to award non-monetary or
equitable relief of any sort. [***]. The arbitrators shall have no power
or authority, under the [***] or otherwise, to relieve the PARTIES from
their agreement hereunder to arbitrate or otherwise to amend or disregard
any provision of this AGREEMENT. Subject to the provisions set forth in
Section 23(b)(v) below, the award of the arbitrators shall be final, binding
and the sole and exclusive remedy to the PARTIES. Either PARTY may seek to
confirm and enforce any final award entered in arbitration, in any court of
competent jurisdiction. The cost of the
arbitration, including the fees of the arbitrators, shall be borne by the
PARTY the arbitrator determines has not prevailed in the arbitration.










 


 









 





***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



	 	v.	 	If an arbitral award does not contain an award of money damages in excess
of [***], then the arbitral award shall not be appealable and shall only be
subject to such challenges as would otherwise be permissible under the
Federal Arbitration Act, 9 U.S.C. §§ 1-16. In the event that the
arbitration results in an arbitral award, which imposes a monetary award in
excess of [***], such award may be appealed to a tribunal of appellate
arbitrators via the [***] Appeal Procedure.












 
	 	vi.	 	 Except as may be required by law, and except to the extent necessary for
either PARTY to seek to confirm and enforce any final award entered in
arbitration in a court of competent jurisdiction, neither a PARTY nor an
arbitrator may disclose the existence, content, or results of any
arbitration hereunder without the prior written consent of both PARTIES.














c.     [***].



7.      Miscellaneous





	 	a.	 	Full Force and Effect. Except as expressly amended by this Amendment, the
AGREEMENT shall remain unchanged and continue in full force and effect as provided
therein.







	 	b.	 	Entire Agreement of the Parties. This Amendment and the AGREEMENT constitute
the complete final and exclusive understanding and agreement of the PARTIES with
respect to the subject matter of the AGREEMENT, and supersede any and all prior or
contemporaneous negotiations, correspondence, understandings and agreements, whether
oral or written, between the PARTIES respecting the subject matter of the AGREEMENT.







	 	c.	 	Counterparts. This Amendment may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one
and the same instrument. One or more counterparts of this Amendment may be executed by
facsimile, electronic reproductions of signatures or other electronic means, all of
which shall be deemed originals.






[Signature Page Follows]





 


 









 






***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




[Signature Page to Amendment No. 4]




IN WITNESS WHEREOF, the Parties hereto have executed this Amendment in duplicate originals by
their authorized officers as of the Effective Date of Amendment No. 4.



ACCEPTED AND AGREED,




	 	 	 	 	 	 	 	 	 
	NEKTAR THERAPEUTICS AL, CORP	 	 	 	BAXTER HEALTHCARE CORPORATION
	 
	 	 	 	 	 	 	 	 
	By:

	 	[***]
	 	 	 	By:
	 	[***]
	 

	 	 
	 	 	 	 	 	 
	 

	 	Signature
	 	 	 	 	 	Signature
	Name:

	 	[***]
	 	 	 	Name:
	 	[***]
	 

	 	 
	 	 	 	 	 	 
	 

	 	Printed
	 	 	 	 	 	Printed
	Title:

	 	[***]
	 	 	 	Title:
	 	[***]
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	BAXTER HEALTHCARE SA
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	[***]
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Signature
	 

	 	 	 	 	 	Name:
	 	[***]
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Printed
	 

	 	 	 	 	 	Title:
	 	[***]
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	[***]
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Signature
	 

	 	 	 	 	 	Name:
	 	[***]
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Printed
	 

	 	 	 	 	 	Title:
	 	[***]