The solution was to replace <asp:ScriptManager> with <ajaxToolkit:ToolkitScriptManager>.
<asp:ScriptManager>
<ajaxToolkit:ToolkitScriptManager>
In my case, I ended up needing to use <ajaxToolkit:ToolkitScriptManager> instead.
<ajaxToolkit:ToolkitScriptManager ID="ScriptManager1" runat="server"></ajaxToolkit:ToolkitScriptManager>
use it instead of simple script manager