Exhibit 10.37
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2
Non-Exclusive Product License Agreement
     This Non-Exclusive Product License Agreement (“Agreement”) is made and
entered into effective as of September 3, 2003 (the “Effective Date”), by and
between Cambridge Antibody Technology Limited, having its principal offices at
The Milstein Building, Granta Park, Cambridgeshire CB1 6GH, England (“CAT”), and
Micromet AG, having its principal offices at Staffelseestrasse 2, 81477 Munich,
Germany (“Micromet”). CAT and Micromet each may be referred to herein
individually as a “Party,” or collectively as the “Parties.”
     Whereas, CAT is the owner of (or licensee of) certain patents and know-how
in the field of Antibody Phage Display and is authorised to grant the licenses
and other rights to Licensee pursuant to the terms of this Agreement;
     Whereas, Micromet is developing the MT201 Product (defined below) and
desires to commercially develop the MT201 Product for the treatment of human
diseases or conditions using the CAT Licensed Patents (defined below) and
pursuant to the terms and conditions set forth in this Agreement and furthermore
owns or controls certain patents that have claims relating to Phage Display; and
     Whereas, CAT desires to grant a license to Micromet on a non-exclusive
basis of the right to use the CAT Licensed Patents for the purpose of
researching, developing and commercializing the MT201 Product and other products
in respect of the EpCAM target.
     Now, Therefore, in consideration of the premises and the mutual covenants
and agreements herein contained, the Parties agree as follows:
1. Definitions
     When used in this Agreement, capitalized terms will have the meanings as
defined below and throughout the Agreement.
     1.1 “Affiliate” means a legal entity that, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with a Party. For purposes of this definition only, “control” and, with
correlative meanings, the terms “controlled by” and “under common control with”
means (a) the possession, directly or indirectly, of the power to direct the
management or policies of a legal entity, whether through the ownership of
voting securities or by contract relating to voting rights or corporate
governance, or (b) the ownership, directly or indirectly, of more than 50% of
the voting securities or other ownership interest of a legal entity; provided
that, if local law restricts foreign ownership, control will be established by
direct or indirect ownership of the maximum ownership percentage that may, under
such local law, be owned by foreign interests.

 

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     1.2 “Antibody” means a molecule or gene encoding such a molecule comprising
or containing more than one immunoglobulin variable domain or parts of such
domain or any existing or future fragments, variants, modifications or
derivatives thereof.
     1.3 “Antibody Product” means any composition or formulation containing or
comprising one or more Antibodies in any format for the prognosis, diagnosis,
prophylaxis or treatment of human diseases or conditions or for use as a
research reagent.
     1.4 “Antigen” means any structure, including an entire protein,
post-translational modifications, lipids, or glyco-lipids, for which Antibody
variable domains have binding affinity.
     1.5 “BiTE Product” means any composition or formulation containing or
comprising a bi-specific Single Chain Antibody, wherein one arm of the Single
Chain Antibody binds to T-cells.
     1.6 “Business Day” means any day (other than a Saturday or Sunday) upon
which major commercial banks are open for business in the cities of London and
Munich.
     1.7 “CAT Background Know-How” means the Know-How Controlled by CAT relating
to the CAT Licensed Patents and described in Schedule II, which the Parties may
amend from time to time at their sole discretion in accordance with Section 2.5.
     1.8 “CAT Licensed Patents” means (a) those Patents identified in
Schedule I, and (b) any Patents that claim or cover any CAT Phage Display
Improvements and that are selected by Micromet for inclusion pursuant to
Section 9.2.
     1.9 “CAT Phage Display Improvements” means any Improvement of a Phage
Display process or any other technology, process, or methodology (each as
claimed in or covered by either of the CAT Licensed Patents or CAT Background
Know-How) that satisfies all of the following criteria: (a) is first conceived
or reduced to practice within [***] of the Effective Date; provided, however,
that upon the request of Micromet at any time during the [***] period following
the date that is [***] from the Effective Date and upon demonstration by
Micromet of good commercial, technical, or legal reasons for extension of the
foregoing [***] period, the Parties agree to negotiate in good faith the
potential extension of such period for one (1) additional[***] period, with the
consent by CAT to such extension not to be withheld absent demonstration of good
commercial, technical, or legal reasons for opposing such extension; and (b) is
developed by or on behalf of CAT or its Affiliates; provided, however, that the
foregoing will exclude in respect of CAT only any such improvement, modification
or adaptation to the extent that CAT is not permitted to disclose, license or
sublicense such improvement, modification or adaptation as a result of an
obligation of CAT to a Third Party.
     1.10 “Combination Product” means any product manufactured or sold by or on
behalf of Micromet in the Micromet Licensed Field which contains a Licensed
Product and one or more other [***].
     1.11 “Controlled” or “Controls” means, with respect to any Know-How,
Patent, or other intellectual property right, possession of the right, whether
directly or indirectly, and whether by ownership, license or otherwise, to
assign, or grant a license, sublicense or other right
 

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to or under, such Know-How, Patent or right as provided for herein without
violating the terms of any agreement or other arrangements with any Third Party.
     1.12 “Development” means any development work carried out on a Lead
directed towards eventual commercialization of such Lead as an Antibody Product.
     1.13 “Diagnostic Licensed Product” means any Licensed Product (including a
composition, formulation, device, assay or other product, but excluding
Microarrays (as defined in Schedule V)) (a) for sale as an in vitro or in vivo
diagnostic for use in or in relation to humans, or (b) for sale separately from
but in support of a therapeutic product for use in or in relation to humans.
     1.14 “Dossier” means a written summary setting forth a brief description of
the proposed use, application or clinical indication of a particular product
composition or formulation (including the MT201 Product) applicable to the EpCAM
Target Program and its origin, amino acid sequence, nucleotide sequence and
Genbank or other accession number (if available); provided, however, that the
foregoing will exclude any information that is subject to an obligation of
confidentiality between Micromet and a Third Party.
     1.15 “EpCAM Target” means the whole or part of the human epithelial cell
adhesion molecule EpCAM identified by the SWISS-PROT entry name TTD1_HUMAN and
accession number P16422 with the amino acid sequence as set out in Schedule III
which is specifically recognized by an Antibody binding to the foregoing.
     1.16 “EpCAM Target Program” means (a) the discovery of Antibodies binding
to the EpCAM Target by practising inventions claimed in any CAT Licensed Patents
or utilizing the CAT Background Know-How; and (b) development of Antibody
Products binding to the EpCAM Target by practising inventions claimed in any CAT
Licensed Patents or utilizing the CAT Background Know-How.
     1.17 “Excluded Field” means the field of research and development as set
out in Schedule IV.
     1.18 “Excluded Technology” means the applications and technologies as set
out in Schedule V.
     1.19 “Exploit” or “Exploitation” means to make, have made, import, export,
use, sell, offer for sale, or otherwise dispose of a product, including all
discovery, research, development, registration, modification, enhancement,
improvement, manufacture, storage, formulation, exportation, transportation,
distribution, promotion and marketing activities related thereto.
     1.20 “FDA” means the United States Food and Drug Administration, or any
successor agency thereto having the administrative authority to regulate the
marketing of human pharmaceutical products or biological therapeutic products,
delivery systems and devices in the United States of America.
     1.21 “Gatekeeping Procedure” means the process by which [***] whether, with
respect to a [***], prior to a [***], (a) such
 

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[***] or which [***] or (b) [***].
     1.22 “Improvement” means any improvement, modification or adaptation of any
technology, process or methodology each as claimed in or covered by either of
the CAT Licensed Patents or CAT Background Know-How, as applicable, which may be
developed by or on behalf of a Party, its sublicensees or its Affiliates during
the Term.
     1.23 “Insolvency Event” means, except for the event of a solvent
reorganization or amalgamation, (i) the filing by a Party in court or agency
pursuant to any applicable statute or regulation of any state or country, a
petition in bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver or trustee of a Party or of its assets, or
(ii) the filing by a Third Party against a Party of an involuntary petition in
bankruptcy or seeking reorganization, liquidation, dissolution, winding up
arrangement, composition or readjustment of such Party’s debts or any other
relief under any bankruptcy, insolvency, reorganization or other similar act or
law of any jurisdiction now or hereafter in effect, or the issuance of a warrant
of attachment, execution or similar process against a Party, and, in each case,
only if the applicable petition, warrant of attachment, execution or similar
process is not dismissed within ninety (90) days after the filing thereof, or
(iii) if any Party proposes or is a Party to any dissolution or liquidation
under applicable law, or makes an assignment for the benefit of creditors.
     1.24 “Know-How” means all non-public inventions, data, information,
methods, procedures, processes and materials, including but not limited to,
biological, chemical, biochemical, toxicological, pharmacological, metabolic,
formulation, clinical, analytical and stability information and data (other than
such Know-How which is or becomes the subject of a patent or of a provisional or
filed patent application or which otherwise becomes public).
     1.25 “Lead” means an Antibody that is selected from a pool of Antibodies
against the EpCAM Target and that has been generated by Phage Display, in
relation to which a Party carries out further development including, but not
limited to, lead optimization.
     1.26 “Licensed Product” means (a) the MT201 Product and (b) any other
product, substance or formulation arising from the EpCAM Target Program, in each
case, the Development, manufacture, importation, use or sale of which (i) would,
but for the provisions of this Agreement, infringe one or more Valid Claims
under the CAT Licensed Patents, or (ii) utilizes the CAT Background Know-How.
     1.27 “MAA” means a marketing approval application filed with the European
Medicines Evaluation Agency or a Biologics License Application filed with the
FDA, and any corresponding applications in other countries or territories.
     1.28 “Major Market Country” means the [***].
 

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     1.29 “Marketing Approval” means the approval of an MAA for a Licensed
Product and any pricing and reimbursement approvals to the extent the applicable
Regulatory Authorities in a country require a pricing or reimbursement approval
prior to the marketing and sale of such Licensed Product in such country.
     1.30 “Micromet Licensed Field” means the prognosis, diagnosis, prophylaxis
or treatment of human diseases or conditions by modulation of the EpCAM Target;
provided, however, that the foregoing will exclude the Excluded Field.
     1.31 “Micromet MT201 Patents” means the following Patents owned as of the
Effective Date by Micromet: [***].
     1.32 “Micromet Phage Display Improvement” means any Improvement of a Phage
Display process or any other technology, process, or methodology that is
developed by or on behalf of Micromet, its Affiliates or sublicensees and that
satisfies all of the following criteria: (a) is first reduced to practice, or
described in a patent application, publication, or abstract within [***] after
the Effective Date; provided, however, that upon the request of CAT at any time
during the [***] period following the date that is [***] from the Effective Date
and upon demonstration by CAT of good commercial, technical, or legal reasons
for extension of the foregoing [***] period, the Parties agree to negotiate in
good faith the potential extension of such period for one (1) additional[***]
period, with the consent by Micromet to such extension not to be withheld absent
demonstration of good commercial, technical, or legal reasons for opposing such
extension; (b) may not lawfully be Exploited without a license to one or more
Valid Claims within the CAT Licensed Patents; (c) is not a human therapeutic or
diagnostic product, a manufacturing method applicable to that product, or a
method of using that product; (d) is not claimed in or covered by any Patent
Controlled by Micromet and is not an improvement, modification or adaptation of
any such invention; and (e) does not relate to any BiTE Product.
     1.33 “Micromet Research Field” means the identification or development of
Antibody Products for the prognosis, diagnosis, prophylaxis or treatment of
human diseases or conditions by modulation of the EpCAM Target; provided,
however, that the foregoing will exclude any research and development activities
(a) in the Excluded Field, or (b) that involve administration of any composition
or formulation of Antibodies to humans.
     1.34 “[***] Agreement” means that certain license agreement by and between
[***] [***] and CAT dated as of [***], as may be then in effect, pursuant to
which CAT is the exclusive licensee of certain of the CAT Licensed Patents and
certain other Know-How related thereto.
     1.35 “MT201 Product” means a human Antibody developed by Micromet binding
to the EpCAM Target, as described in further detail in the Dossier to be
submitted by Micromet to CAT pursuant to Section 3.1.2.
     1.36 “Net Sales” means the gross amount invoiced by Micromet, its Affiliate
or its sublicensee for sales of Licensed Products to any Third Party (and in all
cases amounts actually
 

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received to the extent not invoiced), less any (a) normal trade, cash and
quantity discounts actually allowed, including charge backs; (b) amounts allowed
for returned or defective Licensed Products; (c) insurance and transportation
charges to the extent included in the invoiced amount; and (d) custom duties,
VAT, sales taxes or other governmental charges paid in connection with such
sales (but excluding what is commonly known as income taxes). Any of the
deductions listed above that involves a payment by Micromet, its Affiliate or
sublicensee will be taken as a deduction in the calendar quarter in which the
payment is actually made by such entity; provided, however, to the extent that
the aggregate of such deductions in any calendar quarter for a Licensed Product
exceeds the gross amount invoiced by Micromet, its Affiliate or its sublicensee
for sales of such Licensed Product, then Micromet may carry forward any excess
amounts and reduce the gross amounts invoiced in connection with the applicable
sale of Licensed Products in one or more subsequent calendar quarter(s).
     Any amounts received on account of transfers of Licensed Products between
Micromet, its Affiliates or sublicensees of Licensed Products hereunder will be
excluded from the calculation of Net Sales, and Net Sales will be calculated
based on the final sale of such Licensed Product by Micromet, its Affiliates or
sublicensees to any Third Party.
     In the event a Licensed Product is sold in the form of a Combination
Product, Net Sales for purposes of royalty payments on the Combination Product
will be calculated by multiplying the Net Sales of the Combination Product by
the fraction A/(A+B), where A is the invoice price of the Licensed Product if
sold separately (i.e., without the other active ingredients or components) by
Micromet, its Affiliate or sublicensee; and B is the aggregate invoice price of
the other active ingredients or components in the Combination Product, if sold
separately by Micromet, its Affiliate or sublicensee. In the event that no such
separate sales are made by Micromet, its Affiliate or sublicensee, then Net
Sales for purposes of royalty payments on the Combination Product will be
calculated by multiplying the Net Sales of the Combination Product by the
fraction C/(C+D) where C is the fully allocated cost of the Licensed Product
taken separately from the Combination Product (i.e., not including the other
active ingredients or components); and D is the aggregate fully allocated cost
of the other active ingredients or components; in each case, such costs being
determined using generally accepted accounting procedures consistently applied
by Micromet, its Affiliate or sublicensee, as applicable.
     1.37 “Patents” means (a) all patents and patent applications in any country
or supranational jurisdiction, and (b) any substitutions, divisions,
continuations, continuations-in-part, reissues, renewals, registrations,
confirmations, re-examinations, extensions, supplementary protection
certificates and the like, and any provisional applications, of any such patents
or patent applications.
     1.38 “Phage Display” means the technology, process or methodology whereby
Antibodies are cloned, expressed, produced and screened on the surface of
filamentous bacteriophage.
     1.39 “Primary Application” means a major application of a product
containing an Antibody binding to a target, as ascertained at the time of
assessment of such Antibody as a potential Licensed Product using objective and
reasonable scientific and/or commercial criteria, data and/or information.
Primary Application does not mean any minor or incidental application.

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     1.40 “Regulatory Authorities” means the European Medicines Evaluation
Agency, the FDA, any successor agencies thereto, and any equivalent health
regulatory authorities in any applicable country or territory.
     1.41 “Ribosome Display” means the technology, process or methodology
whereby Antibodies are cloned, expressed, produced and screened in vitro
involving a step where an Antibody or Antibodies are tested for binding to
Antigen when said Antibody or Antibodies are attached to its coding RNA and to
ribosomes.
     1.42 “Single Chain Antibody” means an Antibody having binding affinity for
an Antigen whereby such Antibody comprises (i) a polypeptide segment having a
light chain variable region, (ii) a polypeptide having a heavy chain variable
region, and (iii) at least one peptide linker linking those polypeptides into a
single chain polypeptide.
     1.43 “Term” has the meaning assigned to it in Section 10.1.
     1.44 “Therapeutic Licensed Product” means any Licensed Product sold for
therapeutic or prophylactic use in humans.
     1.45 “Third Party” means any party other than CAT, Micromet or their
respective Affiliates.
     1.46 “Valid Claim” means (i) any claim of an issued and unexpired patent
within the CAT Licensed Patents which has not been held unenforceable or invalid
by a court or other governmental agency of competent jurisdiction in a decision
that is not appealed or cannot be appealed, and which has not been disclaimed or
admitted to be invalid or unenforceable through reissue or otherwise, or (ii) a
pending claim in a pending patent application within the CAT Licensed Patents.
Notwithstanding the foregoing clause (ii), in the event that a pending claim in
a pending patent application does not issue as a valid and enforceable claim in
an issued patent within [***] after the earliest date from which such patent
application claims priority, such a pending claim will not be a Valid Claim,
unless and until such pending claim subsequently issues as a valid and
enforceable claim in an issued patent, in which case such claim will be
reinstated and be deemed to be a Valid Claim as of the date of issuance of such
patent.
2. Grant Of Licenses
     2.1 Research License. Subject to the terms and conditions of this
Agreement, CAT hereby grants to Micromet a nonexclusive, worldwide license under
the CAT Licensed Patents and the CAT Background Know-How to perform research and
development activities in the Micromet Research Field. Subject to the terms and
conditions of this Agreement, Micromet will have the right to grant a sublicense
to any of its rights under the foregoing license to (i) its Affiliates and (ii)
any Third Party that enters into a research and/or collaboration agreement with
Micromet in order to perform research activities on behalf of Micromet in the
Micromet Research Field; provided, however, that any such sublicense will be
consistent with the terms and conditions of this Agreement, and will impose on
the sublicensee the obligations of
 

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Micromet and grant CAT the rights contained in Sections 2.4, 5.5, 5.7, 7, 8 and
9 of this Agreement; and provided, further, that Micromet has no right to grant
to such Third Party a right to grant further sublicenses, except to Affiliates
of such Third Party. Micromet will provide CAT with the identity of each Third
Party licensee of Micromet that receives a sublicense of the rights under this
Section 2.1 within thirty (30) days of execution of the applicable agreement.
Micromet hereby covenants and agrees not to use or sublicense any of its rights
under the foregoing license except as expressly permitted in this Agreement.
     2.2 Commercialization License. Subject to the terms and conditions of this
Agreement, CAT hereby grants to Micromet a nonexclusive, worldwide,
royalty-bearing license under the CAT Licensed Patents and the CAT Background
Know-How to Exploit Licensed Products in the Micromet Licensed Field. Subject to
the terms and conditions of this Agreement, Micromet may grant and authorize the
grant of further sublicenses under the foregoing license to any of its
Affiliates or to a Third Party; provided, however, that any such sublicense will
be consistent with the terms and conditions of this Agreement, and will impose
on the sublicensee the obligations of Micromet and grant CAT the rights
contained in Sections 2.4, 5.5, 5.7, 7, 8 and 9 of this Agreement. Micromet will
provide CAT with the identity of each Third Party licensee of Micromet that
receives a sublicense of the rights under this Section 2.2 within thirty
(30) days of execution of the applicable agreement. The Parties understand and
agree that the terms and conditions of this Section 2.2 (including the right to
sublicense and authorize further sublicenses) will apply to any product,
composition, or formulation upon the submission by Micromet of a Dossier for
such product pursuant to Section 3.1.1. Micromet hereby covenants and agrees not
to use or sublicense any of its rights under the foregoing license except as
expressly permitted in this Agreement.
     2.3 Reservation of Rights. Except for the rights specifically granted
herein, CAT reserves all rights to all CAT Licensed Patents and the CAT
Background Know-How Controlled by it and reserves the right to utilize or allow
Third Parties to utilize the CAT Licensed Patents and the CAT Background
Know-How consistent with the terms of this Agreement. No implied licenses are
granted under this Agreement.
     2.4 Excluded Technology. Notwithstanding anything in this Agreement to the
contrary, CAT grants no rights to Micromet under this Agreement (a) to research,
develop, manufacture, use, or sell Licensed Products using the Excluded
Technology set forth in items [***] of Schedule V, or (b) to Develop,
manufacture, use, or sell any Licensed Product that is a Research Product or
Microarray, as those terms are defined in Schedule V. CAT will notify Micromet
promptly if:
          (a) CAT ceases to be bound by the Excluded Field restriction pursuant
to its agreement with [***]dated[***]; or
          (b) CAT no longer needs to exclude Research Products from the license
granted hereunder pursuant to its agreement with [***] dated [***](the “[***]
License Agreement”), a copy of which has been provided to Micromet by CAT as of
the Effective Date.
 

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CAT will promptly notify Micromet of any modification or amendment to the [***]
License Agreement and deliver to Micromet a redacted copy of any such amended
agreement.
     The restrictions set out in this Agreement relating to the Excluded Field
or Research Products set forth above (as the case may be) will, subject to any
other restrictions on CAT and to the provisions of this Agreement, cease to
apply from the date of removal of such restriction pursuant to the terms of the
foregoing agreements.
     2.5 Know-How Transfer. Within ninety (90) days after the Effective Date,
CAT will disclose in writing and deliver to Micromet all CAT Background
Know-How. CAT may during the Term at its sole discretion propose to Micromet
that additional CAT Background Know-How (developed by or on behalf of CAT after
the Effective Date) be disclosed to Micromet and added to Schedule II. Micromet
will be entitled to accept or reject such additional Know-How at its sole
discretion. If Micromet accepts such additional Know-How, then Schedule II of
this Agreement will be amended in accordance with Section 13.5.
3. Identification of Licensed Products and Reporting
     3.1 Identification of Licensed Products.
          3.1.1 General. Micromet will provide to CAT a Dossier in respect of
each Licensed Product conceived or developed within the EpCAM Target Program
that Micromet desires to Exploit under this Agreement. During the Term, Micromet
will submit such a Dossier to CAT for a particular product composition or
formulation prior to the time Micromet begins administration to humans of such
composition or formulation in a human clinical trial with respect to such
product composition or formulation.
          3.1.2 MT201 Product. The Parties agree and acknowledge that MT201
Product is a Licensed Product hereunder (and has already been administered to
humans in a clinical trial) and Micromet will submit a Dossier in respect of the
MT201 Product within [***] following the Effective Date.
          3.1.3 Confidentiality. CAT will treat all information contained in any
Dossier (or update thereto) provided to CAT under this Section 3.1 or
Section 3.3 as Micromet’s Confidential Information in accordance with the
confidentiality provisions of Section 7.
     3.2 Abandonment of a Licensed Product. If at any time during the Term,
Micromet decides in its discretion that it no longer wishes to Exploit a
Licensed Product itself or with or through an Affiliate or Third Party (an
“Abandoned Product”), Micromet will promptly notify CAT in writing of such
decision and any license granted by Section 2.2 of this Agreement will be deemed
to have been terminated solely with regard to such Abandoned Product from the
date Micromet sets forth in such notification. In the case of any Abandoned
Product, the Parties will [***].
 

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     3.3 Dossier Updates. Within [***] Business Days of each anniversary of the
Effective Date during the Term, Micromet will prepare and provide to CAT an
update to any Dossier submitted that summarizes the current status of the
research and development regarding each Licensed Product. Such update may
include, by way of example, a brief description of any collaborations, business
transactions, changes of control, publications, conference presentations and
intellectual property or legal matters where such events are relevant to CAT as
licensor or Micromet as licensee under this Agreement, unless such update would
constitute a breach by Micromet of a non-disclosure obligation to a Third Party.
4. Gatekeeping and the Excluded Field
     4.1 EpCAM Target. The Parties hereby acknowledge and agree that the EpCAM
Target has been cleared through CAT’s Gatekeeping Procedure as of the Effective
Date.
     4.2 Micromet Representations. Subject to Section 4.3 below, Micromet hereby
represents and warrants to CAT that as of the Effective Date: (a) it is not
developing and does not intend to develop a Licensed Product for a Primary
Application in the Excluded Field; (b) its primary purpose in using the CAT
Licensed Patents under the licenses granted under this Agreement is outside the
Excluded Field; (c) it has provided CAT with the sequence of the EpCAM Target
detailed in Schedule III to allow CAT (i) to conduct an assessment, as of the
Effective Date, of [***] containing Antibodies to the EpCAM Target and the
intended or actual use of such Licensed Products, and (ii) to subject the EpCAM
Target to such [***] or other customary or scientifically established techniques
as may be used to determine whether or not [***] of the Licensed Products
containing Antibodies to the EpCAM Target is [***]; and (d) it believes that the
Primary Application of the Licensed Products containing Antibodies to the EpCAM
Target is outside the Excluded Field.
     4.3 Limitation. Notwithstanding Section 4.2, if, following the Effective
Date, it is subsequently discovered by either Party that products containing
Antibodies to the EpCAM Target do have a Primary Application in the Excluded
Field, the discovering Party will promptly notify the other in writing of such
discovery. Notwithstanding any such discovery or notice thereof, Micromet will
be entitled to continue with the research, development, use, or sale of any
Antibody or Licensed Product, including any application within the Excluded
Field, under the terms and conditions set forth herein, and such research,
development, use or sale (together with any prior research, development, use or
sale) will not constitute a breach of Section 4.2 or any other provision of this
Agreement.
5. Payments
     5.1 Initial License Fee. On the Effective Date, Micromet will pay to CAT a
non-refundable, non-creditable license fee of US$[***].
     5.2 Therapeutic Licensed Product Milestone Payments and Royalty Rates. The
milestone payments and royalty rates set forth in this Section 5.2 will apply to
each Therapeutic Licensed Product.
 

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     5.2.1 Milestones. Micromet will pay to CAT the following non-refundable,
non-creditable milestone payments for each Therapeutic Licensed Product
Exploited by Micromet, its Affiliates or sublicensees:

      Milestone Event   Milestone Payment
Acceptance of the filing of the first Marketing Approval for such Therapeutic
Licensed Product in the first Major Market Country
  US$[***]
Receipt of first Marketing Approval for such Therapeutic Licensed Product in the
first Major Market Country
  US$[***]

     5.2.2 Royalties.
          (a) Subject to the terms and conditions of this Agreement, Micromet
will pay to CAT a royalty payment equal to [***]% of Net Sales of each
Therapeutic Licensed Product sold by Micromet, its Affiliates or sublicensees
throughout the world. The royalty payment obligation of Micromet under this
Section 5.2.2 will expire on a Therapeutic Licensed Product-by-Therapeutic
Licensed Product and country-by-country basis (in which such Therapeutic
Licensed Product is sold) upon the later of: (a) expiration of the last to
expire Valid Claim of the CAT Licensed Patents which, but for the license
granted in this Agreement, would be infringed by the Development, manufacture,
importation, use or sale of such Therapeutic Licensed Product in such country;
and (b) ten (10) years from first commercial sale for use or consumption by the
general public of such Therapeutic Licensed Product by or on behalf of Micromet
anywhere in the world. In the event that the period described in clause (b) of
the preceding sentence extends beyond the period described in clause (a) of the
preceding sentence with respect to a Therapeutic Licensed Product in a country
(a “Therapeutic Product Extended Period”), then the royalty rate of [***]% set
out above will be reduced to [***]% of Net Sales of such Therapeutic Licensed
Product in such country during such Therapeutic Product Extended Period.
          (b) Notwithstanding anything herein to the contrary, the Parties agree
that no royalties will be payable by Micromet for a particular country in
respect of any Therapeutic Licensed Product which does not utilize the CAT
Background Know-How and which is first sold commercially after the expiration of
the last to expire Valid Claim of the CAT Licensed Patents in such country,
which, but for the license granted in this Agreement, would be infringed by the
Development, manufacture, importation, use or sale of such Therapeutic Licensed
Product in such country.
     5.3 Diagnostic Licensed Product Milestone Payments and Royalty Rates. The
milestone payments and royalty rates set forth in this Section 5.3 will apply to
each Diagnostic Licensed Product.
 

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     5.3.1 Milestones. Micromet will pay to CAT the following non-refundable,
non-creditable milestone payments for each Diagnostic Licensed Product Exploited
by Micromet, its Affiliates or sublicensees:

      Milestone Event   Milestone Payment
Acceptance of the filing of the first Marketing Approval for each such
Diagnostic Licensed Product in the first Major Market Country
  US$[***]
Receipt of first Marketing Approval for each such Diagnostic Licensed Product in
the first Major Market Country
  US$[***]

     5.3.2 Royalties.
          (a) Subject to the terms and conditions of this Agreement, Micromet
will pay to CAT a royalty payment equal to [***]% of Net Sales of each
Diagnostic Licensed Product sold by Micromet, its Affiliates or sublicensees
throughout the world. The royalty payment obligation of Micromet under this
Section 5.3.2 will expire on a Diagnostic Licensed Product-by-Diagnostic
Licensed Product and country-by-country basis (in which such Diagnostic Licensed
Product is sold) upon the later of: (a) expiration of the last to expire Valid
Claim of the CAT Licensed Patents which, but for the license granted in this
Agreement, would be infringed by the Development, manufacture, importation, use
or sale of such Diagnostic Licensed Product in such country; and (b) ten
(10) years from first commercial sale for use or consumption by the general
public of such Diagnostic Licensed Product by or on behalf of Micromet anywhere
in the world. In the event that the period described in clause (b) of the
preceding sentence extends beyond the period described in clause (a) of the
preceding sentence with respect to a Diagnostic Licensed Product in a country (a
“Diagnostic Product Extended Period”), then the royalty rate of [***]% set out
above will be reduced to [***]% of Net Sales of such Diagnostic Licensed Product
in such country during such Diagnostic Product Extended Period.
          (b) Notwithstanding anything herein to the contrary, the Parties agree
that no royalties will be payable by Micromet for a particular country in
respect of any Diagnostic Licensed Product which does not utilize the CAT
Background Know-How and which is first sold commercially after the expiration of
the last to expire Valid Claim of the CAT Licensed Patents in such country,
which, but for the license granted in this Agreement, would be infringed by the
Development, manufacture, importation, use or sale of such Diagnostic Licensed
Product in such country.
     5.3.3 Acceleration of Milestones. If the first commercial sale of a
Diagnostic Licensed Product by Micromet, its Affiliate or sublicensee is made in
a Major Market Country where no Marketing Approval has been granted for such
Licensed Product, then both of the
 

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milestone payments set forth in Section 5.3.1 will be payable as if the relevant
milestone events had occurred as of the date of such first commercial sale.
     5.4 Payment.
          5.4.1 Payment of Milestones. Upon Micromet achieving a development
milestone that triggers a milestone payment obligation pursuant to
Sections 5.2.1 or 5.3.1, Micromet will give notice to CAT within [***] days of
achieving each milestone, and will make the corresponding milestone payment
within [***] days of the achievement of the corresponding milestone event.
          5.4.2 Payment of Royalties. For any quarterly period for which
royalties are payable by Micromet to CAT under Sections 5.2.2 or 5.3.2, Micromet
will provide notice to CAT within [***] days after the end of each such calendar
quarter and a written report with Micromet’s good faith estimate of Net Sales
accrued in the preceding calendar quarter and the royalties payable thereon.
Micromet will make royalty payments to CAT for Licensed Products or Diagnostic
Licensed Products sold during a calendar quarter within [***] of the last day of
that calendar quarter. Each royalty payment will be accompanied by a written
report for that calendar quarter showing the cumulative Net Sales of the
applicable product sold by Micromet, its Affiliates and its sublicensees on a
country-by-country basis worldwide during the quarterly reporting period and the
corresponding royalties payable under this Agreement.
          5.4.3 Payment Method. All amounts due hereunder will be paid in US
Dollars by wire transfer in immediately available funds to Barclays Bank Plc,
Benet Street Business Centre, P O Box No 2, Cambridge, CB2 3PZ, England, Account
Number [***]; Sort Code: [***], Swift Code: [***] (payments may be routed
through Barclays Bank Plc, New York, ABA Routing Code: [***]; Swift Code: [***])
or such other bank account as CAT may from time to time notify Micromet. Any
payments or portions thereof due hereunder which are not paid on the date such
payments are due will bear interest from the due date until the date of payment
at the rate which is the lower of (i) [***]percentage points above the overnight
London Interbank Offering Rate in effect on the due date or (ii) the highest
rate permitted by applicable law.
          5.4.4 Currency Conversion for Milestone Payments and Calculation of
Net Sales. For any currency conversion required in connection with any payment
hereunder, or in determining the amount of royalties due, such conversion will
be made at the prevailing commercial rate of exchange for purchasing the
currency into which an amount is to be converted as publicly announced as the
spot rate quoted by Barclays Bank Plc (or its successor) in London on (i) the
day which is fifteen (15) Business Days following the date of the achievement of
any milestone for which payment is due pursuant to Sections 5.2.1 or 5.3.1 and
(ii) the day which is the last Business Day of the applicable quarterly period
for any royalty payments made pursuant to Sections 5.2.2 or 5.3.2. For purposes
of determining the amount of royalties due, the amount of Net Sales in any
foreign currency will be computed by converting such amount into US Dollars as
provided in this Section. All payments due under this Agreement will be paid
exclusive of value added tax.
 

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          5.4.5 Credit for Royalties Paid on Uncollected Amounts. As set forth
in this Section 5.4.5, Micromet will be entitled to a credit on royalties paid
by Micromet hereunder with respect to any invoiced amounts that are included in
Net Sales but are not collected by Micromet, its Affiliate or sublicensee, as
applicable (each such amount, an “Uncollected Amount”). Such credit may be taken
in the calendar quarter in which the applicable Uncollected Amount is no longer
recorded as a receivable or in one or more subsequent calendar quarter(s) to the
extent that such credit exceeds the amount payable by Micromet to CAT in any
calendar quarter. The amount of such credit will be equal to the difference
between (x) the royalty actually paid by Micromet to CAT hereunder for the
Uncollected Amount, and (y) the royalty actually paid by CAT to [***] [***], its
successors or assigns pursuant to the [***] Agreement for the Uncollected
Amount. Upon the request of Micromet in connection with this Section 5.4.5, CAT
will provide to Micromet payment records supporting payment to [***] by CAT in
respect of such Uncollected Amount. Micromet agrees that an Uncollected Amount
will only be recorded as not receivable once Micromet has used its reasonable
endeavors to recover such amount from the relevant Third Party in accordance
with its usual practice for recovering unpaid debts. To the extent that an
Uncollected Amount recorded as not receivable is in fact subsequently received
by Micromet, Micromet will pay to CAT the corresponding amount of any credit
previously taken by Micromet in accordance with Section 5.4.2.
     5.5 Records; Audits. Micromet will at all times keep or cause or procure to
be kept and for at least [***] retain accurate data, accounts and supporting
documentation of all Licensed Products produced and/or sold, used or disposed of
by or on behalf of Micromet and the Net Sales thereof (collectively, “Records”)
to the extent such Records are reasonably required for the computation and
verification of royalties and all other sums payable under this Agreement.
Micromet will give to or procure for CAT’s nominated representative, upon
reasonable request in writing and no more than [***], access to Micromet’s
facilities during normal business hours to inspect all Records kept in
accordance with this Section 5.5 and to make copies or to take extracts from
these Records. However, CAT’s nominated representative will not disclose to CAT
or any Third Party any Confidential Information belonging to Micromet but will
merely report on any under or over payment discovered as a result of his
inspection. CAT will bear all costs of such audit, unless the audit reveals an
underpayment of more than [***]% from payments otherwise due and payable
hereunder, in which case Micromet will bear the cost of the audit.
     5.6 Payment of Additional Amounts. If, based on the results of any audit,
additional payments are owed to CAT under this Agreement, Micromet will make
such additional payments promptly after the accounting firm’s written report is
delivered to both Parties. If, based on the results of any audit, payments made
by Micromet pursuant to Sections 5.2 or 5.3 exceeded payments indicated by the
audit as being due thereunder, such excess will be credited against future
amounts owed by Micromet under Sections 5.2 or 5.3.
     5.7 Confidentiality. CAT will treat all information provided to it pursuant
to any audit performed under Section 5.5 in accordance with the confidentiality
provisions of Section 7 and will cause its accounting firm or other designated
representative to enter into a reasonably
 

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acceptable confidentiality agreement with Micromet obligating such firm or
representative to maintain all such financial information in confidence pursuant
to such confidentiality agreement.
     5.8 Withholdings.
          5.8.1 Micromet will be entitled (if required to do so) to deduct tax
from the payments it makes to CAT under this Section 5 above (“Withholding Tax”)
provided that:
               (a) Micromet will pay over such Withholding Tax to the relevant
revenue authority and will provide to CAT such documentary evidence as CAT may
reasonably require regarding (i) the amount so deducted, and (ii) evidence of
payment to such authority; and
               (b) Micromet will provide to CAT such assistance as CAT may
reasonably require (including submission of documents to relevant revenue
authorities) to obtain a repayment of the Withholding Tax or (as the case may
be) to obtain the benefit of such Withholding Tax whether by credit against
taxes or otherwise.
          5.8.2 If, pursuant to a relevant double taxation agreement, a Party
has the right to claim relief (whether in whole or in part) from any Withholding
Tax, then:
               (a) Micromet will co-operate with CAT in seeking a written
direction from the relevant revenue authorities to the effect that either:
(i) no Withholding Tax should be operated in respect of payments under this
Agreement, or (ii) the rate of Withholding Tax will be such lower rate as
specified by the relevant revenue authority, and Micromet will comply with any
such direction given; and
               (b) pending such written direction, Micromet will deduct
Withholding Tax in accordance with Section 5.8.1 above, but will, in addition to
the sums otherwise payable under this Agreement, pay to CAT such further sum as
will ensure that, after operation of Withholding Tax on all such sums, the net
amount received by CAT equals the amount that CAT would have received had the
relevant revenue authority already issued the written direction described in
Section 5.8.2(a)(i) above or, as the case may be, Section 5.8.2(a)(ii) above.
          5.8.3 If, as a result of any change in corporate status or location of
CAT, or permitted assignment of this Agreement by CAT, Withholding Tax becomes
due on payments from Micromet to CAT or its permitted assignee and CAT is not
able to claim a credit or reimbursement for such tax, in whole or in part, then
any amount of Withholding Tax deducted by Micromet on amounts payable by
Micromet to CAT hereunder will be treated as if the amount of Withholding Tax
was paid directly to CAT, to the extent that a credit or reimbursement could not
be claimed by CAT.
          5.8.4 If, as a result of any change in corporate status or location of
Micromet, or permitted assignment of this Agreement by Micromet, Withholding Tax
becomes due on payments from Micromet to CAT or its permitted assignee and CAT
is not able to claim a credit or reimbursement for such tax, in whole or in
part, then Micromet will deduct Withholding Tax in accordance with Section 5.8.1
above, but will, in addition to the sums otherwise payable under this Agreement,
pay to CAT such further sum as will ensure that, after operation of Withholding
Tax on all such sums, the net amount received by CAT equals the amount that CAT
would have

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received had the non-creditable or non-deductible amount of such Withholding Tax
not been deducted. To the extent that any such amount deducted by Micromet in
accordance with this Section 5.8.4 is in fact subsequently able to be claimed by
CAT as a credit or reimbursement for such tax otherwise deducted, then CAT will
pay to Micromet the corresponding amount of any such credit or reimbursement for
such tax otherwise eligible to be deducted by CAT.
6. Representation and Warranties; Covenants
     6.1 Representations of CAT. CAT represents to Micromet that as of the
Effective Date: (a) it Controls the CAT Licensed Patents and the CAT Background
Know-How licensed under this Agreement (subject to the exclusions in the
Excluded Field and Excluded Technology); (b) the CAT Licensed Patents includes
all Patents relating to Phage Display that both (i) are owned by CAT or are
licensed from the [***] to CAT, and (ii) would be infringed by Micromet’s
performance of activities in the Micromet Research Field or the Development,
manufacture, importation, use or sale of Antibody Products resulting from such
activities; provided, however, that it will not be a breach of the foregoing
representation if CAT has in good faith inadvertently omitted a Patent from
Schedule I and is not otherwise in breach of its covenant under Section 6.3
regarding such Patent; (c) except as disclosed in Schedules I and VI, it has not
received any written communication that expressly threatens interference actions
or oppositions to any Patents within the CAT Licensed Patents or other
litigation before any patent office, court, or any other governmental entity in
any jurisdiction in regard to the CAT Licensed Patents; (d) except as disclosed
in Schedules I and VI, it has not been served with any complaint alleging
infringement of a Third Party’s patents arising from the practice of the claims
in the Patents within the CAT Licensed Patents; and (e) Schedule VI includes a
complete list of all pending claims of Third Parties (other than oppositions) in
regard to the entitlement, validity or enforceability of the CAT Licensed
Patents.
     6.2 Reciprocal Representations and Warranties. Each Party represents and
warrants to the other Party that: (a) this Agreement is a legal and valid
obligation binding upon its execution and enforceable against it in accordance
with its terms and conditions; and (b) the execution, delivery and performance
of this Agreement by such Party has been duly authorized by all necessary
corporate action, and the person executing this Agreement on behalf of such
Party has been duly authorized to do so by all requisite corporate actions.
     6.3 Additional Covenants. CAT hereby covenants and agrees that (a) it will
maintain throughout the Term all agreements with Third Parties granting CAT
rights in and to the CAT Licensed Patents and CAT Background Know-How that are
necessary to grant Micromet the licenses granted in Section 2 of this Agreement
(including, without limitation, the [***] Agreement) and (b) it will promptly
upon discovery of any omission amend Schedule I as of the Effective Date to
include any Patent omitted from Schedule I.
     6.4 DISCLAIMER OF WARRANTY. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN
THIS AGREEMENT, EACH PARTY MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES,
EXPRESS OR IMPLIED,
 

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EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND CAT AND
MICROMET EACH SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR
ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, OR ANY WARRANTY
AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES.
7. Confidentiality
     7.1 Definition. During the Term and subject to the terms and conditions of
this Agreement, a Party (the “Disclosing Party”) may communicate to the other
Party (the “Receiving Party”) confidential information in connection with this
Agreement or the performance of its obligations hereunder, including, without
limitation, any Dossier or update thereto, any Know-How, any information
regarding CAT Phage Display Improvements or Micromet Phage Display Improvements,
any reports provided pursuant to this Agreement, any scientific and
manufacturing information and plans, marketing and business plans, and financial
and personnel matters relating to a Party or its present or future products,
sales, suppliers, customers, employees, investors or business (collectively,
“Confidential Information”).
     7.2 Exclusions.
          7.2.1 Notwithstanding the foregoing, information of a Disclosing Party
will not be deemed Confidential Information with respect to a Receiving Party
for purposes of this Agreement if such information:
               (a) was already known to the Receiving Party or its Affiliates,
other than under an obligation of confidentiality or non-use, at the time of
disclosure to the Receiving Party;
               (b) was generally available or known to parties reasonably
skilled in the field to which such information or Know-How pertains, or was
otherwise part of the public domain, at the time of its disclosure to the
Receiving Party;
               (c) became generally available or known to parties reasonably
skilled in the field to which such information or Know-How pertains, or
otherwise became part of the public domain, after its disclosure to the
Receiving Party through no fault of or breach of its obligations under this
Section 7 by the Receiving Party;
               (d) was disclosed to the Receiving Party other than under an
obligation of confidentiality or non-use, by a party other than the Disclosing
Party who had no obligation to the Disclosing Party not to disclose such
information or Know-How to others; or
               (e) was independently discovered or developed by the Receiving
Party or its Affiliates, as evidenced by contemporaneous written records,
without the use of or reference to, and by personnel who had no knowledge of or
access to, any Confidential Information of the Disclosing Party.

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          7.2.2 Specific aspects or details of Confidential Information will not
be deemed to be within the public domain or in the possession of a person or
entity merely because the Confidential Information is embraced by more general
information in the public domain or in the possession of such person or entity.
Further, any combination of Confidential Information will not be considered in
the public domain or in the possession of a person or entity merely because
individual elements of such Confidential Information are in the public domain or
in the possession of such person or entity unless the combination and its
principles are in the public domain or in the possession of such person or
entity.
     7.3 Disclosure and Use Restriction. Except as expressly provided herein,
the Parties agree that, during the Term and for [***] years thereafter (unless
one or more of the exceptions described in 7.2.1 apply), a Receiving Party and
its Affiliates and sublicensees will keep completely confidential and will not
publish or otherwise disclose and will not use for any purpose except for the
purposes contemplated by this Agreement any Confidential Information of the
Disclosing Party, its Affiliates or sublicensees.
     7.4 Authorized Disclosure. A Receiving Party may disclose Confidential
Information of the Disclosing Party to the extent that such disclosure is:
          7.4.1 made in response to a valid order of a court of competent
jurisdiction or other governmental or regulatory body of competent jurisdiction;
provided, however, that the Receiving Party will first have given notice to the
Disclosing Party and given the Disclosing Party a reasonable opportunity to
quash such order and to obtain a protective order requiring that the
Confidential Information and documents that are the subject of such order be
held in confidence by such court or governmental or regulatory body or, if
disclosed, be used only for the purposes for which the order was issued; and
provided, further, that if a disclosure order is not quashed or a protective
order is not obtained, the Confidential Information disclosed in response to
such court or governmental order will be limited to that information which is
legally required to be disclosed in response to such court or governmental
order;
          7.4.2 otherwise required by law or mandatory regulation; provided,
however, that the Disclosing Party will provide the Receiving Party with notice
of such disclosure in advance thereof to the extent practicable;
          7.4.3 made by the Receiving Party to the regulatory authorities as
required in connection with any application, filing, or similar requests for
regulatory approvals; provided, however, that reasonable measures will be taken
to assure confidential treatment of such information;
          7.4.4 made by the Receiving Party, in connection with the performance
of this Agreement, to Affiliates, permitted sublicensees, employees,
consultants, representatives or agents, each of whom prior to disclosure must be
bound by obligations of confidentiality and non-use at least equivalent in scope
to those set forth in this Section 7;
 

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          7.4.5 made by the Receiving Party to existing or potential acquirers
or merger candidates, potential collaborators (to the extent contemplated
hereunder), investment bankers, existing or potential investors, venture capital
firms or other financial institutions or investors for purposes of obtaining
financing, each of whom prior to disclosure must be bound by obligations of
confidentiality and non-use at least equivalent in scope to those set forth in
this Section 7; or
          7.4.6 a disclosure of the terms of this Agreement and disclosed in
accordance with Section 7.6.
     7.5 Use of Name. Neither Party will make public use of the other Party’s
name except (i) in connection with announcements and other permitted disclosures
relating to this Agreement and the activities contemplated hereby, (ii) as
required by applicable law, and (iii) otherwise as agreed in writing by such
other Party.
     7.6 Terms of Agreement to be Maintained in Confidence. Subject to the other
provisions of this Section 7 (including the exception for any public disclosures
made in compliance with the terms of this Section 7.6), the Parties agree that
the terms of this Agreement are confidential and will not be disclosed by either
Party to any Third Party (except to a Party’s professional advisor) without
advance written permission of the other Party; provided, however, that either
Party may make any filings of this Agreement required by law or regulation in
any country so long as such Party uses its reasonable efforts to obtain
confidential treatment for portions of this Agreement as available, consults
with the other Party, and permits the other Party to participate, to the extent
practicable, in seeking a protective order or other confidential treatment; and
provided, further, that either Party may disclose the terms of this Agreement to
a Third Party (and its professional advisors) when such disclosure is reasonably
necessary in connection with (i) the grant of a license or sublicense of the CAT
Licensed Patents to such Third Party, (ii) a merger, acquisition, placement,
investment, or other such transaction with such Third Party, or (iii) the sale
of securities to or other financing from such Third Party or a financing
underwritten by such Third Party, in which case disclosure may be made to any
person or entity to whom such Third Party sells such securities (and its
professional advisors). Advance written permission for disclosure will not be
required when a Party is ordered to disclose information concerning the
Agreement by a competent tribunal or such disclosures are required by law,
regulation, or stock exchange rules, except that such Party will make all
reasonable efforts to limit any disclosure as may be required in the course of
legal proceedings by entry of an appropriate protective and confidentiality
order, and will provide the other Party with as much advance notice of such
circumstances as is practicable.
     7.7 Press Release.
          7.7.1 The Parties will make a joint press release regarding the
execution of this Agreement, the final form of which will be subject to approval
of the Parties prior to its release to the public. For subsequent press releases
and other written public disclosures relating to this Agreement or the Parties’
relationship hereunder (each, a “Proposed Disclosure”), each Party will use
reasonable efforts to submit to the other Party a draft of such Proposed
Disclosure for

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review and comment by the other Party at least [***] prior to the date on which
such Party plans to release such Proposed Disclosure, and in any event will
submit such drafts at least [***] prior to the release of such Proposed
Disclosure, and will review and consider in good faith any comments provided in
response.
          7.7.2 If a Party is unable to comply with the foregoing [***] notice
requirement because of a legal obligation or stock exchange requirement to make
more rapid disclosure, such Party will not be in breach of this Agreement but
will in that case give telephone notice to a senior executive of the other Party
and provide a draft disclosure with as much notice as possible prior to the
release of such Proposed Disclosure.
          7.7.3 A Party may publicly disclose without regard to the preceding
requirements of this Section 7.7 information that was previously disclosed in a
Proposed Disclosure that was in compliance with such requirements.
8. Filing, Prosecution and Maintenance of Patent Rights
     8.1 Prosecution and Maintenance. As between the Parties, CAT will be solely
responsible and bear all costs for the preparation, filing, prosecution and
maintenance of the CAT Licensed Patents in its discretion, subject to the terms
and conditions of this Agreement.
     8.2 Costs. As between the Parties, CAT will be solely responsible and bear
all costs for (and enjoy all recovery from) any actions concerning the CAT
Licensed Patents, including but not limited to reexaminations, oppositions,
interferences, and infringement actions, all in its sole and absolute
discretion.
     8.3 No Challenge. CAT will be permitted to terminate this Agreement if
Micromet or its Affiliates challenge, or intentionally direct or intentionally
assist (other than under compulsion of a legal process) a third party to
challenge, the validity or enforceability of any of the Patents within CAT
Licensed Patents; provided, however, that the foregoing termination right will
not apply in the event that such challenge to a patent within the CAT Licensed
Patents is brought by Micromet or its Affiliates in response to a suit or
proceeding on such patent brought by CAT (or its Affiliates) against Micromet or
its Affiliates. If a sublicensee of Micromet or its Affiliates (or an Affiliate
of such sublicensee) challenges the validity or enforceability of or otherwise
opposes any such Patent under which such sublicensee is sublicensed, then
Micromet upon notice by CAT will terminate such sublicense. Micromet and its
Affiliates will include provisions in all agreements that grant sublicense
rights under the Patents within CAT Licensed Patents that if the sublicensee or
its Affiliates challenge the validity or enforceability of or otherwise oppose
any such Patents under which the sublicensee is sublicensed, Micromet may
terminate its sublicense agreement with such sublicensee.
     8.4 Notice. CAT will notify Micromet of any successful challenge to the CAT
Licensed Patents by any Third Party and will, upon request by Micromet, provide
Micromet with reasonable documentation regarding any such challenge. Micromet
will notify CAT of any
 

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infringement by a Third Party of any Patent in the CAT Licensed Patents of which
Micromet becomes aware and will provide CAT with the available evidence, if any,
of such infringement.
     8.5 Enforcement. As between the Parties, CAT will have the exclusive right
and sole discretion during the Term to stop infringement of the CAT Licensed
Patents, including by bringing suit or other proceeding against the infringer in
its own name. Upon request by CAT, Micromet will provide reasonable assistance
to CAT as a party to the lawsuit or other proceeding, at CAT’s expense;
provided, however, that CAT will retain control of the prosecution of such suit
or proceeding. CAT will bear all its costs incurred in connection with such
lawsuit or other proceeding, and, consequently, will be entitled to collect and
retain for its own account such damages and profits as may be accrued as a
result of such lawsuit or other proceeding.
     8.6 Release. As of the Effective Date, each of CAT, and its Affiliates,
assigns, successors, and predecessors, and any directors and officers of the
foregoing (each, a “CAT Entity”), hereby releases and forever discharges
Micromet, its Affiliates, assigns, successors, and predecessors, and any
directors and officers of the foregoing (each, a “Micromet Entity”), from any
and all actions, causes of action, claims or demands for damages, suits, debts,
sums of money, accounts, costs, expenses, compensation, consequential damages,
covenants, interest, liens or any other thing whatsoever, in law, equity or
otherwise, whether now known or unknown or which have ever existed, now exist or
which may exist in the future (except to enforce the terms of this Agreement),
which any CAT Entity may have against any Micromet Entity arising out of, or
relating to, agreements, events or conduct related to any use by Micromet of the
CAT Licensed Patents prior to and including the Effective Date in relation to
the EpCAM Target. For the avoidance of doubt nothing in this Section 8.6 will
prevent CAT from pursuing Micromet for any injunctive relief or any loss,
damage, claim or expense suffered or incurred by CAT as a result of any breach
by Micromet of the terms of this Agreement.
9. Improvements; Ownership
     9.1 Phage Display Improvements.
          9.1.1 Disclosure of Micromet Phage Display Improvements. Within [***]
following conception or discovery by or on behalf of Micromet, its Affiliates or
sublicensees of any Micromet Phage Display Improvements, Micromet will provide
CAT with notice of such Micromet Phage Display Improvements.
          9.1.2 Ownership. As between the Parties, and subject to the licenses
granted in Section 9.1.3, Micromet will retain all right, title and interest in
and to any and all Micromet Phage Display Improvements. Micromet will ensure
that to the extent permitted by law, any Third Party, including Micromet’s
sublicensees, performing work related to Phage Display is under an obligation:
(a) to assign all inventions, Patents, and Know-How relating to any Micromet
Phage Display Improvements to Micromet, or where this obligation is not
permitted, (b) to exclusively license all such inventions, Patents, and Know-How
to Micromet, with the
 

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right to sublicense, or where neither of the obligations described in the
preceding clause (a) or (b) is permitted then, (c) to non-exclusively license
all such inventions, Patents, and Know-How to Micromet, with the right to
sublicense.
          9.1.3 License to CAT. Subject to the terms and conditions of this
Agreement, Micromet hereby grants to CAT a perpetual, irrevocable,
non-exclusive, worldwide, royalty-free, fully paid license, with the right to
grant and authorize the grant of sublicenses (in accordance with the terms of
Section 2.1 relating to sublicenses by Licensee, mutatis mutandis), under the
Micromet Phage Display Improvements and any intellectual property rights therein
to use and practice any Micromet Phage Display Improvements for the purpose of
identifying, producing, developing, making, importing and selling products
(other than BiTE Products) containing or comprising one or more Antibodies or
for any other purpose. CAT hereby covenants and agrees not to use or sublicense
any of its rights under the foregoing license except as expressly permitted in
this Agreement. The license set forth in this Section 9.1.3 will survive
expiration or termination of this Agreement, except if this Agreement (or, after
expiration or termination of this Agreement, this Section 9.1.3) is terminated
by Micromet for breach of the foregoing covenant by CAT, in which case such
license will terminate immediately and entirely.
     9.2 CAT Phage Display Improvements. Within [***] following conception or
discovery by or on behalf of CAT or its Affiliates of any CAT Phage Display
Improvements, CAT will promptly provide Micromet with written notice of such CAT
Phage Display Improvements (to the extent that such disclosure would not violate
CAT’s non-disclosure obligations to one or more Third Parties). If Micromet
elects to include any Patents claiming or covering one or more of such CAT Phage
Display Improvements, then Micromet will provide CAT with written notice of such
election and, upon receipt by CAT of such notice, any such Patents will be
deemed CAT Licensed Patents hereunder. Subject to the licenses granted in
Section 2, CAT will retain all right, title and interest in and to any and all
CAT Phage Display Improvements.
     9.3 Further Assurances. Each Party agrees to take all necessary and proper
acts, and will cause its employees, Affiliates, contractors, sublicensees, and
consultants to take such necessary and proper acts, to effectuate the ownership
provisions set forth in this Section 9.
10. Term and Termination
     10.1 Term. This Agreement is effective as of the Effective Date and will
expire upon the last date upon which the royalties payable by Micromet to CAT
under Section 5.2.2 or 5.3.2 expire unless terminated earlier as expressly
provided otherwise in this Agreement (the “Term”).
     10.2 Termination for Material Breach.
          10.2.1 Any material breach or failure by a Party to comply with any of
its obligations contained herein (including, without limitation any such breach
or failure during an Insolvency Event) will entitle the Party not in default to
give to the Party in default written notice
 

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specifying the nature of the default, requiring the defaulting Party to make
good or otherwise cure such default. The Parties agree and acknowledge that in
no event will a material breach or failure of any of Micromet’s obligations with
regard to the research license granted in Section 2.1 be deemed to be a material
breach of any obligation with regard to any Licensed Product nor otherwise
permit termination by CAT of this Agreement, including without limitation, the
license rights granted by Section 2.2 with respect to any Licensed Product.
          10.2.2 Subject to Section 10.2.3 below if, after a Party’s receipt of
notice pursuant to Section 10.2.1 above, such default is not cured within [***]
days (or, if such default cannot be cured within such [***]-day period, if the
Party in default does not commence actions to cure such default within such
[***]-day period and thereafter diligently continue such actions and cure such
default within [***] days after the receipt of such notice, except in the case
of a payment default, as to which the defaulting Party will have only a
[***]-day cure period), then the Party not in default will be entitled, on
written notice to the other Party and without prejudice to any other rights
conferred on it by this Agreement or available to it or them by law or in
equity, to terminate this Agreement immediately.
          10.2.3 If a Party receiving a notice pursuant to Section 10.2.1 above,
is also at the time of receiving such notice subject to an Insolvency Event and
such default is not cured within [***] days (except in the case of payment
default, as to which the defaulting party will only have a [***] day cure
period), then the Party not in default will be entitled, on written notice to
the other Party and without prejudice to any other rights conferred by this
Agreement or available to it or them by law or in equity, to terminate this
Agreement immediately.
     10.3 Amendment or Termination of [***] Agreement.
          10.3.1 Upon any amendment of the [***] Agreement that materially
reduces the obligation of CAT to pay royalties to [***] in connection with a
sale of “Products” (as defined therein) by CAT or its sublicensee (without a
corresponding material payment by CAT of cash or in-kind consideration
therefor), then CAT will promptly notify Micromet of such amendment and the
Parties will in good faith promptly amend the applicable provisions of this
Agreement in order to provide to Micromet, as best as practicable, the economic
benefits (or reduction of obligations) resulting from such amendment to the
[***] Agreement.
          10.3.2 Upon termination of the [***] Agreement, and upon request by
Micromet, CAT will use commercially reasonable efforts to obtain a direct
license for Micromet from [***], its successors or assigns to any CAT Licensed
Patents licensed to CAT under such agreement upon the terms set forth herein
(including, without limitation, pursuant to Section [***] of the [***]
Agreement); provided, however, that CAT will have no such obligation if
Micromet’s acts or omissions under this Agreement caused such termination of the
[***] Agreement.
     10.4 Additional Termination Right Regarding the Research License. Subject
to the terms of this Section 10.4, at any time during the Term, CAT will be
entitled to terminate the
 

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license to Micromet under Section 2.1 solely in the event that (i) Micromet has
ceased all research and development activities in respect of the EpCAM Target
Program for a continuous period of at least [***] and (ii) Micromet has not
[***]. CAT will provide to Micromet written notice at least [***] in advance of
any such proposed termination. If there is any dispute regarding whether the
terms and conditions of this Section 10.4 are satisfied, then CAT will not be
entitled to terminate the license grant under Section 2.1 pending final
resolution of such dispute in accordance with Section 13.3 of this Agreement.
     10.5 Consequences of Expiration and Termination.
          10.5.1 Material Breach. Upon termination of this Agreement by a Party
pursuant to Section 10.2, (i) all licenses granted by the terminating Party to
the defaulting Party will terminate (except as provided in Section 9.1.3 and
Section 10.5.2); (ii) the licenses granted by the defaulting Party will survive
(subject to continued performance by the terminating Party of its royalty
obligations, if any); and (iii) the milestone and royalty obligations set forth
in Section 5 with respect to the surviving licenses will continue.
          10.5.2 Survival of Certain Sublicenses. Sublicenses granted by a
defaulting Party to a Third Party will survive termination of the defaulting
Party’s license under Section 10.5.1(i); provided, however, that (x) such Third
Party is not the cause of the default, (y) such Third Party is not in breach of,
and continues to fully perform all obligations under its sublicense agreement
and any surviving provisions in this Agreement applicable to such sublicensee,
and (z) the terminating Party continues to receive from such Third Party all
royalty and milestone payments set forth in Section 5.
          10.5.3 Effect of Termination of Research License. Notwithstanding
anything herein to the contrary, termination by CAT of Micromet’s rights under
Section 2.1 (as a result of Micromet’s material breach of that Section or
pursuant to Section 10.4 above) will, provided that Micromet is complying with
its other obligations under this Agreement, in no way terminate Micromet’s
rights under Section 2.2 with regard to any Licensed Product or relieve the
Parties of any other obligation under this Agreement.
          10.5.4 Return of Confidential Information. Upon any expiration or
termination of this Agreement, each Party will, at the other Party’s option,
promptly return or destroy any of such other Party’s Confidential Information
(including all Know-How) in its possession or control; provided, however, that
each Party may retain: (a) a single archival copy of the Confidential
Information of the other Party solely for the availing itself of the rights
accorded to it, or to perform its obligations, under the surviving provisions of
this Agreement (including, without limitation any and all license or sublicense
rights expressly made to survive termination or expiration hereof); and (b) any
portion of the Confidential Information of the other Party which a Party is
required by applicable law to retain.
     10.6 Survival. Expiration or termination of this Agreement for any reason
will not relieve the Parties of any obligation accruing prior to such expiration
or termination, including
 

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without limitation Micromet’s obligation to pay royalties under Section 5 above
on the sale of Licensed Products prior to the effective date of such expiration
or termination. The provisions of Sections 3.1.3, 5 (solely as to accrued and
unpaid amounts and Sections 5.5 and 5.7), 6.4, 7, 8.6, 9.1.3, 10.5, 10.6, 11, 12
and 13, together with any definitions used or schedules referenced therein, will
survive termination or expiration of this Agreement.
11. Indemnification and Insurance
     11.1 Indemnification By Micromet. Micromet will indemnify CAT, its
Affiliates, and their respective directors, officers, employees and agents, and
defend and save each of them harmless, from and against any and all losses,
damages, liabilities, costs and expenses (including reasonable attorneys’ fees
and expenses)(collectively, “Losses”) in connection with any and all liability
suits, investigations, claims or demands by Third Parties (each, a “Third Party
Claim”) to the extent arising out of: (a) any theory of product liability
(including, but not limited to, actions in the form of tort, warranty or strict
liability) concerning a Licensed Product that is Exploited by Micromet or its
Affiliates pursuant to any right or license granted under this Agreement, or
(b) any failure by any sublicensee of Micromet to comply with the obligations of
Sections 2.4, 5.5, 5.7, 7, 8 and 9 of this Agreement imposed on such sublicensee
pursuant to Sections 2.1 and 2.2 of this Agreement, as applicable; in each case,
except to the extent that such Losses arise out of or result from (i) the gross
negligence or reckless misconduct of a party seeking indemnification hereunder,
or (ii) a material breach by a party seeking indemnification hereunder of any
provision of this Agreement.
     11.2 Indemnification Procedure.
          11.2.1 Notice of Claim. All indemnification claims in respect of a
Party, its Affiliates or their respective directors, officers, employees and
agents (collectively, the “Indemnitees” and each an “Indemnitee”) will be made
solely by such Party to this Agreement (the “Indemnified Party”). The
Indemnified Party will give the indemnifying Party (the “Indemnifying Party”)
prompt written notice (an “Indemnification Claim Notice”) of any Losses or
discovery of fact upon which such Indemnified Party intends to base a request
for indemnification under this Section 11, but in no event will the Indemnifying
Party be liable for any Losses that result from any delay in providing such
notice. Each Indemnification Claim Notice must contain a description of the
claim and the nature and amount of such Loss (to the extent that the nature and
amount of such Loss are known at such time). The Indemnified Party will furnish
promptly to the Indemnifying Party copies of all papers and official documents
received in respect of any Losses.
          11.2.2 Prosecution of Claims. The obligations of an Indemnifying Party
under this Section 11 will be governed by and be contingent upon the following
additional terms and conditions:
               (a) Control of Defense.
                    (i) At its option, the Indemnifying Party may assume the
defense of any Third Party Claim by giving written notice to the Indemnified
Party within thirty (30) days after the Indemnifying Party’s receipt of an
Indemnification Claim Notice.

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                    (ii) Upon assuming the defense of a Third Party Claim, the
Indemnifying Party may appoint as lead counsel in the defense of the Third Party
Claim any legal counsel selected by the Indemnifying Party. In the event the
Indemnifying Party assumes the defense of a Third Party Claim, the Indemnified
Party will immediately deliver to the Indemnifying Party all original notices
and documents (including court papers) received by any Indemnitee in connection
with the Third Party Claim. Should the Indemnifying Party assume the defense of
a Third Party Claim, the Indemnifying Party will not be liable to the
Indemnified Party or any other Indemnitee for any legal expenses subsequently
incurred by such Indemnified Party or other Indemnitee in connection with the
analysis, defense or settlement of the Third Party Claim.
               (b) Right to Participate in Defense. Without limiting
Section 11.2.2(a), any Indemnitee will be entitled to participate in, but not
control, the defense of such Third Party Claim and to employ counsel of its
choice for such purpose; provided, however, that such employment will be at the
Indemnitee’s own expense unless (i) the employment thereof has been specifically
authorized by the Indemnifying Party in writing, or (ii) the Indemnifying Party
has failed to assume the defense and employ counsel in accordance with
Section 11.2.2(a) (in which case the Indemnified Party will control the
defense).
               (c) Settlement. With respect to any Losses relating solely to the
payment of money damages in connection with a Third Party Claim and that will
not result in the Indemnitee’s becoming subject to injunctive or other relief or
otherwise adversely affect the business of the Indemnitee in any manner, and as
to which the Indemnifying Party will have acknowledged in writing the obligation
to indemnify the Indemnitee hereunder, the Indemnifying Party will have the sole
right to consent to the entry of any judgment, enter into any settlement or
otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its
sole discretion, will deem appropriate, and will transfer to the Indemnified
Party all amounts which said Indemnified Party will be liable to pay prior to
the time prior to the entry of judgment. With respect to all other Losses in
connection with Third Party Claims, where the Indemnifying Party has assumed the
defense of the Third Party Claim in accordance with Section 11.2.2(a), the
Indemnifying Party will have authority to consent to the entry of any judgment,
enter into any settlement or otherwise dispose of such Loss provided it obtains
the prior written consent of the Indemnified Party (which consent will be at the
Indemnified Party’s sole and absolute discretion). The Indemnifying Party will
not be liable for any settlement or other disposition of a Loss by an Indemnitee
that is reached without the written consent of the Indemnifying Party.
Regardless of whether the Indemnifying Party chooses to defend or prosecute any
Third Party Claim, no Indemnitee will admit any liability with respect to, or
settle, compromise or discharge, any Third Party Claim without the prior written
consent of the Indemnifying Party.
               (d) Cooperation. Regardless of whether the Indemnifying Party
chooses to defend or prosecute any Third Party Claim, the Indemnified Party
will, and will cause each other Indemnitee to, cooperate in the defense or
prosecution thereof and will furnish such records, information and testimony,
provide such witnesses and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested in connection
therewith. Such cooperation will include access during normal business hours
afforded to the Indemnifying Party to, and reasonable retention by the
Indemnified Party of, records and information that are reasonably relevant to
such Third Party Claim, and making Indemnitees and

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other employees and agents available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder, and
the Indemnifying Party will reimburse the Indemnified Party for all its
reasonable out-of-pocket expenses in connection therewith.
     11.3 Expenses. Except as provided above, the reasonable and verifiable
costs and expenses, including fees and disbursements of counsel, incurred by the
Indemnified Party in connection with any claim will be reimbursed on a calendar
quarter basis by the Indemnifying Party, without prejudice to the Indemnifying
Party’s right to contest the Indemnified Party’s right to indemnification and
subject to refund in the event the Indemnifying Party is ultimately held not to
be obligated to indemnify the Indemnified Party.
     11.4 Insurance. During the Term, each Party will have and maintain such
types and amounts of liability insurance as is normal and customary in the
industry generally for parties similarly situated, and will upon request provide
the other Party with a copy of its policies of insurance in that regard, along
with any amendments and revisions thereto.
12. Limitation of Liability
     12.1 NOTHING IN THIS AGREEEMNT WILL RESTRICT OR LIMIT EITHER PARTY’S
LIABILITY FOR DEATH OR PERSONAL INJURY CAUSED BY SUCH PARTY’S NEGLIGENCE OR
WILLFUL MISCONDUCT.
     12.2 SUBJECT TO SECTION 12.1 ABOVE, IN NO EVENT WILL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR LOST PROFITS, LOSS OF DATA, OR FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF
LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES, ARISING UNDER ANY CAUSE OF ACTION AND ARISING IN ANY WAY OUT OF
THIS AGREEMENT. THE FOREGOING LIMITATIONS WILL NOT APPLY TO DAMAGES ARISING FROM
A BREACH OF SECTION 7 ABOVE OR AN AWARD OF ENHANCED DAMAGES AVAILABLE UNDER THE
PATENT LAWS FOR WILLFUL PATENT INFRINGEMENT, AND WILL NOT LIMIT EITHER PARTY’S
INDEMNITY OBLIGATIONS TO THE OTHER PARTY UNDER THIS AGREEMENT.
13. Miscellaneous
     13.1 Assignment. Without the prior written consent of the other Party
(which such consent may be granted, withheld or conditioned at the other Party’s
sole and absolute discretion), neither Party will sell, transfer, assign,
delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by
operation of law or otherwise, this Agreement or any of its rights or duties
hereunder; provided, however, that either Party may assign or transfer this
Agreement or any of its rights or obligations hereunder without the consent of
the other Party:
               (a) to any Affiliate of such Party; provided, further, that
                    (i) such Affiliate may not otherwise sell, transfer, assign,
delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by
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or otherwise (except pursuant to any merger, consolidation or asset sale subject
to Section 13.1(b) below), this Agreement or any of its rights or duties
hereunder without the prior written consent of the other Party and such consent
may be granted, withheld or conditioned at the other Party’s sole and absolute
discretion; and
                    (ii) that if any such Affiliate is subsequently sold by or
otherwise ceases to be an Affiliate of the relevant Party (except pursuant to
any merger, consolidation or asset sale subject to Section 13.1(b) below) this
Agreement must be assigned back to the relevant Party before such sale or other
event becomes effective; or
               (b) to any Third Party with which it merges or consolidates, or
to which it transfers all or substantially all of its assets to which this
Agreement relates.
In each case described in this Section 13.1 the relevant Affiliate assignee,
Third Party assignee or surviving entity will assume in writing all of the
assigning Party’s obligations under this Agreement and the assigning Party will
promptly provide notice to the other Party of such assignment. The assigning
Party (except if it is not the surviving entity) will remain jointly and
severally liable under this Agreement with the relevant Affiliate assignee. Any
purported assignment or transfer in violation of this Section will be void ab
initio and of no force or effect.
     13.2 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, then (a) such
provision will be fully severable, (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance from this Agreement, and (d) the
Parties will use good faith efforts to promptly replace such illegal, invalid or
unenforceable provision with a valid and enforceable provision having similar
terms such that the objectives contemplated by the Parties when entering this
Agreement may be realized. To the fullest extent permitted by applicable law,
each Party hereby waives any provision of law that would render any provision
prohibited or unenforceable in any respect.
     13.3 Governing Law; Dispute Resolution.
          13.3.1 This Agreement, all disputes between the Parties related to or
arising out of this Agreement, the Parties’ relationship created hereby, and/or
the negotiations for and entry into this Agreement, including any dispute
concerning its conclusion, binding effect, amendment, coverage, or termination,
will be governed by the laws of England and Wales without reference to any
choice of law principles that would cause the application of the laws of a
different jurisdiction, and will (subject to Section 13.3.2 below) be subject to
the non-exclusive jurisdiction of the courts of competent jurisdiction located
in England and Germany.
          13.3.2 The Parties will try to settle their differences amicably
between themselves. In the event of any controversy or claim arising out of or
relating to any provision of this Agreement or the performance or alleged
non-performance of a Party of its obligations under this Agreement (“Dispute”),
a Party may notify the other Party in writing of such Dispute.

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If the Parties are unable to resolve the Dispute within [***] of receipt of the
written notice by the other Party, such dispute will be referred to [***] who
will use their good faith efforts to resolve the Dispute within [***] after it
was referred to [***]. If [***] fail to resolve the Dispute, each Party may
pursue its rights and remedies as described in Section 13.3.1 above.
Notwithstanding the foregoing, no Dispute relating to Section 7 will be subject
to this Section 13.3.2. In addition, nothing in this Section 13.3.2 will limit
either Party’s right to seek immediate injunctive or other equitable relief
whenever the facts or circumstances would permit a Party to seek such relief in
a court of competent jurisdiction.
     13.4 Notices. All notices or other communications that are required or
permitted hereunder will be in writing and delivered personally, sent by
facsimile (and promptly confirmed by personal delivery or overnight courier as
provided herein), or sent by internationally-recognized overnight courier
addressed as follows:
     If to CAT, to:
Cambridge Antibody Technology Ltd
Milstein Building, Granta Park
Cambridgeshire CB1 6GH
England
Attention: the Company Secretary
Facsimile: +44 (0)1223 471472
     If to Micromet, to:
Micromet AG
Staffelseestrasse 2
D-81477Munich, Germany
Attention: Chief Business Officer
Facsimile: +49 89 895-277-285
with a copy to:
Cooley Godward LLP
One Freedom Square
Reston Town Center
11951 Freedom Drive
Reston, Virginia 20190-5656
Attention: Matthias Alder, Esq.
Facsimile: +1 (703) 456-8100
or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. Any such
communication will be deemed to have been given (i) when delivered, if
personally delivered or sent by facsimile on a Business Day,
 

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and (ii) on the second Business Day after dispatch, if sent by
internationally-recognized overnight courier. It is understood and agreed that
this Section 13.4 is not intended to govern the day-to-day business
communications necessary between the Parties in performing their duties, in due
course, under the terms of this Agreement.
     13.5 Entire Agreement; Modifications. This Agreement, together with any
schedules attached hereto (each of which is hereby incorporated herein by
reference), sets forth and constitutes the entire agreement and understanding
between the Parties with respect to the subject matter hereof and all prior
agreements, understanding, promises and representations, whether written or
oral, with respect thereto are hereby superceded and of no further force and
effect. Each Party confirms that it is not relying on any representations or
warranties of the other Party except as specifically set forth herein. For the
avoidance of doubt, nothing in this Agreement is intended to or shall be
construed to provide that (a) a representation, covenant or obligation under
this Agreement shall be a representation, covenant or obligation under any other
agreement or instrument executed by the Parties, except as expressly provided
otherwise herein, or (b) a default under this Agreement shall constitute a
default under any other agreement or instrument executed by the Parties, except
as expressly provided otherwise herein. No amendment or modification of this
Agreement will be binding upon the Parties unless made in writing and duly
executed by authorized representatives of both Parties.
     13.6 Relationship of the Parties. It is expressly agreed that the Parties’
relationship under this Agreement is strictly one of licensor-licensee, and that
this Agreement does not create or constitute a partnership, joint venture, or
agency. Neither Party will have the authority to make any statements,
representations or commitments of any kind, or to take any action, which will be
binding (or purport to be binding) on the other. All persons employed by a Party
will be employees of such Party and not of the other Party and all costs and
obligations incurred by reason of any such employment will be for the account
and expense of such Party.
     13.7 Waiver. Any term or condition of this Agreement may be waived at any
time by the Party that is entitled to the benefit thereof, but no such waiver
will be effective unless set forth in a written instrument duly executed by or
on behalf of the Party waiving such term or condition. The waiver by either
Party of any right hereunder or of claims based on the failure to perform or a
breach by the other Party will not be deemed a waiver of any other right
hereunder or of any other breach or failure by said other Party whether of a
similar nature or otherwise.
     13.8 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
     13.9 No Benefit to Third Parties. The representations, warranties,
covenants and agreements set forth in this Agreement are for the sole benefit of
the Parties hereto and their successors and permitted assigns, and they will not
be construed as conferring any rights on any other parties.
     13.10 Further Assurance. Each Party will duly execute and deliver, or cause
to be duly executed and delivered, such further instruments and do and cause to
be done such further acts and things, including the filing of such assignments,
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instruments, as may be necessary or as the other Party may reasonably request in
connection with this Agreement or to carry out more effectively the provisions
and purposes, or to better assure and confirm unto such other Party its rights
and remedies under this Agreement.
     13.11 English Language. This Agreement has been written and executed in the
English language. Any translation into any other language will not be an
official version thereof, and in the event of any conflict in interpretation
between the English version and such translation, the English version will
control.
     13.12 Force Majeure. Neither Party will be deemed to be in breach of this
Agreement as a result of default, delay or failure to perform by such Party that
results from any cause beyond the reasonable control of such Party that could
not reasonably be foreseen by such Party, including without limitation, fire,
earthquake, acts of God, acts of war, strikes, lockouts, or other labor
disputes, riots, civil disturbances, actions or inactions of governmental
authorities (except actions in response to a breach of applicable laws by such
Party), or epidemics. This Section 13.12 will not operate to excuse payment by a
Party of any amounts due to any other Party under this Agreement. In the event
of any such force majeure, the Party affected will promptly notify the other
Party, will use commercially reasonable efforts to overcome such force majeure,
and will keep the other Party informed with respect thereto. If the event of
force majeure continues for a period greater than one hundred and eighty
(180) days, then the unaffected Party may terminate this Agreement immediately
by notice in writing to the affected Party.
     13.13 Construction. Except where the context otherwise requires, wherever
used, the singular will include the plural, the plural the singular, the use of
any gender will 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 “including” as used herein means including, without limiting
the generality of any description preceding such term. No rule of strict
construction will be applied against either Party.
     [Remainder of this page is left blank intentionally. Signature page
follows.]

31

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     In Witness Whereof, the Parties have executed this Agreement by their
respective authorized representatives as of the date first written above.

              Cambridge Antibody Technology Limited    
 
            By:   /s/ Diane Mellett               Name:   Diane Mellett        
      Title:   General Counsel              
 
            Micromet AG    
 
            By:   /s/ Christian Itin                   Christian Itin, Ph.D    
    Chief Business Officer    
 
            By:   /s/ Gregor K. Mirow              
 
  Name:
Title:   Gregor K. Mirow
 
CFO
 
    

[Signature Page to the MT-201 Non-Exclusive Product License Agreement]

 

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Schedule I
CAT Licensed Patents

                              [***]   [***]   [***]   [***]
PUBLISHED PCT
  [***]   [***]   [***]   [***]   [***]   [***]
US
  [***]   [***]   [***]   [***]   [***]   [***]
EUROPE
  [***]   [***]   [***]   [***]   [***]   [***]
AUSTRALIA
  [***]   [***]   [***]   [***]   [***]   [***]
JAPAN
  [***]   [***]   [***]   [***]   [***]   [***]
CANADA
  [***]   [***]   [***]   [***]   [***]   [***]
SOUTH KOREA
  [***]   [***]   [***]   [***]   [***]   [***]

 

*   Patents in opposition proceedings.   ***   Certain information on this page
has been omitted and filed separately with the Commission. Confidential
treatment has been requested with respect to the omitted portions.

 

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Schedule II
CAT Background Know-How
     [***]:[***]
 

***   Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect to
the omitted portions.

 

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Schedule III
EpCAM Target
     The EpCAM Target sequences are:
[***]
     EpCAM nucleotide sequence
[***]
 

***   Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect to
the omitted portions.

 

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Schedule IV
Excluded Field
“Excluded Field” means:
the discovery, isolation, characterization, research, development, and/or
commercialization of an Antibody useful for the diagnosis, treatment and/or
prevention of one or more of the following disease conditions wherein the
primary scientific rationale or activity is [***]:

  i.   [***]);     ii.   [***];     iii.   [***],     iv.   [***];     v.  
[***]; and/or     vi.   [***],

provided, however, that for the purpose of this Agreement the term “Excluded
Field” will not include the diagnosis, treatment and/or prevention of the above
disease conditions caused by [***].
 

***   Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect to
the omitted portions.

 

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Schedule V
Excluded Technologies
“Excluded Technology” means:

1.   “[***],” meaning the technology claimed in the following [***] to which CAT
has sole right, title and interest: [***]”

2.   “[***],” meaning the technology claimed in the following Patents to which
CAT has sole right, title and interest: [***];

3.   “[***],” meaning solely Antibodies which [***] and in which [***];

4.   “Research Products,” meaning those certain research products for which CAT
has granted certain exclusive rights to a Third Party under the [***] License
Agreement, as may then be in effect.

5.   “[***],” meaning any Antibody [***] for the purpose of simultaneously
detecting and/or measuring Antigens whereby such product:

  (a)   Contains or comprises:

  (i)   an [***] of [***] Antibodies of different [***] [***] (excluding
Antibodies serving a purpose as controls), or     (ii)   an [***] of [***]
Antibodies of the same [***] [***], provided that such Antibody is used to [***]
[***] [***] data points for the purpose of [***] (excluding Antibodies serving a
purpose as controls), and

  (b)   contains or comprises an array of Antibodies [***], and     (c)   is in
a format where the [***], and     (d)   employs any type of [***], and     (e)  
may be used [***] or [***] (as appropriate), and     (f)   is not, by way of
example, (i) any type of [***] technology; (ii) any type of [***] technology;
(iii) any type of [***] assay.

 

***   Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect to
the omitted portions.

 

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Schedule VI
CAT Third Party Claims
[***]
 

***   Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect to
the omitted portions.

 

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Table of Contents

                            Page   1.   DEFINITIONS     1   2.   GRANT OF
LICENSES     7  
 
  2.1   Research License     7  
 
  2.2   Commercialization License     8  
 
  2.3   Reservation of Rights     8  
 
  2.4   Excluded Technology     8  
 
  2.5   Know-How Transfer     9   3.   IDENTIFICATION OF LICENSED PRODUCTS AND
REPORTING     9  
 
  3.1   Identification of Licensed Products     9  
 
  3.2   Abandonment of a Licensed Product     9  
 
  3.3   Dossier Updates     9   4.   GATEKEEPING AND THE EXCLUDED FIELD     10  
 
  4.1   EpCAM Target     10  
 
  4.2   Micromet Representations     10  
 
  4.3   Limitation     10   5.   PAYMENTS     10  
 
  5.1   Initial License Fee     10  
 
  5.2   Therapeutic Licensed Product Milestone Payments and Royalty Rates     10
 
 
  5.3   Diagnostic Licensed Product Milestone Payments and Royalty Rates     11
 
 
  5.4   Payment     12  
 
  5.5   Records; Audits     14  
 
  5.6   Payment of Additional Amounts     14  
 
  5.7   Confidentiality     14  
 
  5.8   Withholdings     14   6.   REPRESENTATION AND WARRANTIES; COVENANTS    
15  
 
  6.1   Representations of CAT     16  
 
  6.2   Reciprocal Representations and Warranties     16  
 
  6.3   Additional Covenants     16  
 
  6.4   DISCLAIMER OF WARRANTY     16   7.   CONFIDENTIALITY     16  

-i-

 

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Table of Contents
(continued)

                 
 
            Page  
 
  7.1   Definition     16  
 
  7.2   Exclusions     17  
 
  7.3   Disclosure and Use Restriction     17  
 
  7.4   Authorized Disclosure     18  
 
  7.5   Use of Name     18  
 
  7.6   Terms of Agreement to be Maintained in Confidence     18  
 
  7.7   Press Release     19   8.   FILING, PROSECUTION AND MAINTENANCE OF
PATENT RIGHTS     19  
 
  8.1   Prosecution and Maintenance     20  
 
  8.2   Costs     20  
 
  8.3   No Challenge     20  
 
  8.4   Notice     20  
 
  8.5   Enforcement     20  
 
  8.6   Release     20   9.   IMPROVEMENTS; OWNERSHIP     21  
 
  9.1   Phage Display Improvements     21  
 
  9.2   CAT Phage Display Improvements     21  
 
  9.3   Further Assurances     22   10.   TERM AND TERMINATION     22  
 
  10.1   Term     22  
 
  10.2   Termination for Material Breach     22  
 
  10.3   Amendment or Termination of [***] Agreement     23  
 
  10.4   Additional Termination Right Regarding the Research License     23  
 
  10.5   Consequences of Expiration and Termination     23  
 
  10.6   Survival     24   11.   INDEMNIFICATION AND INSURANCE     24  
 
  11.1   Indemnification By Micromet     24  
 
  11.2   Indemnification Procedure     24  
 
  11.3   Expenses     26  
 
  11.4   Insurance     26  

-ii-
 

[***]   Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect to
the omitted portions.

 

--------------------------------------------------------------------------------

 

Table of Contents
(continued)

                            Page   12.   LIMITATION OF LIABILITY     26   13.  
MISCELLANEOUS     27  
 
  13.1   Assignment     27  
 
  13.2   Severability     27  
 
  13.3   Governing Law; Dispute Resolution     28  
 
  13.4   Notices     28  
 
  13.5   Entire Agreement; Modifications     29  
 
  13.6   Relationship of the Parties     29  
 
  13.7   Waiver     29  
 
  13.8   Counterparts     30  
 
  13.9   No Benefit to Third Parties     30  
 
  13.10   Further Assurance     30  
 
  13.11   English Language     30  
 
  13.12   Force Majeure     30  
 
  13.13   Construction     30  

-iii-

 

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Exhibit 10.37
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2
AMENDMENT
TO
NON-EXCLUSIVE PRODUCT LICENSE AGREEMENT
     This Amendment (the “Amendment”) is made as of this 17th day of March, 2005
by and between Micromet AG, located at Staffelseestrasse 2, D-81477, Munich,
Germany (“Micromet”) and Cambridge Antibody Technology Limited, located at The
Milstein Building, Granta Park, Cambridgeshire CB 1 6GH, England (“CAT”) (each
of Micromet, and CAT, a “Party” and, collectively, the “Parties”).
Recitals
     A. The Parties have entered into that certain Non-Exclusive Product License
Agreement, dated as of September 3, 2003 (the “Agreement”), pursuant to which
the Parties have granted certain intellectual property licenses for the MT201
Product and other products in respect of the EpCAM target and for the purposes
described therein. Capitalized terms used herein without definition shall have
the meanings given to such terms in the Agreement.
     B. The Parties desire to amend the Agreement to delete the Excluded Field.
Agreement
     Now, Therefore, for and in consideration of the mutual promises and
covenants set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
     1. Expiration of Excluded Field. The Parties acknowledge and agree that,
effective as of 22 February, 2004, CAT has ceased to be bound by the Excluded
Field restriction pursuant to its agreement with [***] dated [***] and,
consequently, pursuant to the terms of Section 2.4 of the Agreement, any
restrictions set forth in the Agreement relating to the Excluded Field have
ceased to apply as of 22 February 2004.
     2. 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.
     3. Effectiveness. This Amendment shall become effective upon the execution
hereof by both Parties.
     4. Continuing Effect. Other than as set forth in this Amendment, all of the
terms and conditions of the Agreement shall continue in full force and effect.
 

***   Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect to
the omitted portions.

1.

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     In Witness Whereof, the parties have executed this Amendment to the
Non-Exclusive Product License Agreement as of the date first written above.

                      Micromet AG   Cambridge Antibody Technology Limited    
 
                   
By:
  /s/ Christian Itin
 
      By:   /s/ Alasdair Moodie
 
   
 
                   
Name:
  Christian Itin
 
      Name:   Alasdair Moodie
 
   
 
                   
Title:
  CEO
 
      Title:   Assistant General Counsel
 
   
 
                   

2.