Document:

2009
Management Incentive Compensation Plan

    
      
         

      

      
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    2009
Management Incentive Compensation Plan

     

    
      	
              1.

            	
              Purpose
      of the Plan

            

    

     

    The
Management Incentive Compensation Plan (the “Plan”) is designed to offer
incentive compensation to officers and management-level employees (the “Associates”) of Micromet, Inc.
and its subsidiary Micromet AG (collectively, “Micromet”) by rewarding the
achievement of corporate goals and specifically measured individual goals that
are consistent with and support the achievement of the corporate
goals.  The Plan will create an environment that will focus Associates
on the achievement of objectives.  Since cooperation between
departments and Associates is required to achieve the corporate goals and
because such corporate goals represent a significant portion of the incentive
compensation paid under the Plan, the Plan fosters teamwork and a cohesive
management team.  The Plan is designed to:

     

    
      	
               
      

            	
              ·

            	
              Provide
      an incentive program to achieve overall corporate objectives and to
      enhance shareholder value

            

    

     

    
      	
               
      

            	
              ·

            	
              Reward
      those individuals who significantly impact corporate
    results

            

    

     

    
      	
               
      

            	
              ·

            	
              Encourage
      increased teamwork among all disciplines within
  Micromet

            

    

     

    
      	
               
      

            	
              ·

            	
              Incorporate
      an incentive program in the overall compensation program of Micromet to
      help attract and retain key
Associates

            

    

     

    
      	
              2.

            	
              Plan
      Governance

            

    

     

    The
President and CEO of Micromet, Inc. (the “Chief Executive Officer”) will
be responsible for the administration of the Plan for Associates of Micromet,
Inc., and the Vorstand
of Micromet AG (“Executive
Management Board”) will be responsible for the administration of the Plan
for Associates of Micromet AG, except that the Compensation Committee (the
“Committee”) of the
Board of Directors of Micromet, Inc. (the “Board”) will be responsible
for approving any incentive awards to officers of Micromet, Inc. and for
determining and approving any incentive awards to the Chief Executive
Officer.

     

    
      	
              3.

            	
              Eligibility
      of Associates (other than Executive
Officers)

            

    

     

    
      	
              3.1.

            	
              The
      Associates who may be eligible to participate in the Plan will be selected
      at the sole discretion of Micromet (each such Associate a “Plan
      Participant”).

            

    

     

    
      	
              3.2.

            	
              In
      order to be eligible to receive any incentive award under this Plan, an
      Associate (a) must have been in an eligible position for at least three
      (3) consecutive months during the Plan year; (b) must not be a part-time
      Associate (i.e. working fewer than 30 hours per week); and (c) must have
      had at least a rating of 3.0 on his or her most recent performance review
      (on a scale of 1.0 to 5.0, with 5.0 being the highest
      rating).  If an eligible Associate has been on probation for
      performance or other issues at any time during the Plan year or during the
      period from the end of the Plan year until the time at which bonus
      determinations are made, any award to such individual will be subject to
      the discretion of Micromet.

            

    

    
      
         

      

      
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              4.

            	
              Form
      of Incentive Award Payments

            

    

     

    Incentive
award payments may be made in cash, through the issuance of stock or stock
options, or by a combination of cash, stock and/or stock options, at the
discretion of the Committee, subject to the approval of the
Board.   In the event that the Committee and the Board elect to
pay incentive awards in stock or stock options, the Committee, in its sole
discretion, will make a determination of the number of shares of stock or stock
options to be issued to each Plan Participant based, in part, upon the Plan
Participant’s achievement of corporate and individual goals, as described
below.  The issuance of stock and stock options may also be subject to
the approval of Micromet, Inc.’s stockholders, and any stock options issued will
be subject to the terms and conditions of Micromet, Inc.’s 2003 Equity Incentive
Award Plan, as amended from time to time by Micromet, Inc.

     

    
      	
              5.

            	
              Target
      Award Multiplier

            

    

     

    
      	
              5.1.

            	
              Incentive
      awards will be determined by applying an “achievement multiplier” to the
      base salary of Plan Participants.  The following target award
      multipliers will be used for this
purpose:

            

    

    

    
      
        
          
            
              
                	
                        Micromet, Inc. Position

                      	 	
                        Micromet AG Position

                      	 	
                        Target Award Multiplier

                      	 
	
                        President
      & CEO

                      	 	
                        n.a.

                      	 	 	50	%
	
                        Senior
      Vice President

                      	 	
                        Vorstand

                      	 	 	35	%
	
                        Vice
      President

                      	 	
                        Vorstand

                      	 	 	35	%
	
                        Executive
      Director

                      	 	
                        Vice
      President

                      	 	 	25	%
	
                        Senior
      Director

                      	 	
                        Senior
      Director

                      	 	 	20	%
	
                        Director

                      	 	
                        Director

                      	 	 	20	%
	
                        Associate
      Director

                      	 	
                        Associate
      Director

                      	 	 	15	%
	
                        Senior
      Manager

                      	 	
                        Senior
      Manager

                      	 	 	15	%

              

            

          

        

      

    

    

    
      	
              5.2.

            	
              The
      target award multiplier will be used to establish the target incentive
      award at the beginning of each year.  The target award
      multiplier will be equal to the actual award multiplier used at year-end
      in situations where corporate and individual objectives have been met for
      the year.

            

    

     

    
      	
              6.

            	
              Corporate
      and Individual Performance

            

    

     

    
      	
              6.1.

            	
              Prior
      to or within 90 days after the beginning of the Plan year, the Chief
      Executive Officer will present to the Committee a list of the overall
      corporate goals for the Plan year, which are subject to approval of the
      Committee and the Board of Directors of Micromet, Inc.  All Plan
      Participants will then develop a list of personal goals, which must be
      approved by the immediate supervisor and the executive officer responsible
      for the applicable department, or by the Chief Executive Officer for
      personal goals of the executive
officers.

            

    

    
      
         

      

      
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              6.2.

            	
              The
      Plan calls for incentive awards based on the achievement of annual
      corporate and personal goals that have been approved as indicated
      above.  The relative weight between corporate goals and personal
      goals varies based on the individual’s level within the
      organization.  The weighting will be reviewed annually and may
      be adjusted, as necessary or appropriate.  The weighting for the
      Plan year will be as follows:

            

    

    

    
      
        
          
            
              
                
                  	
                          Micromet, Inc.

                        	 	
                          Micromet AG

                        	 	
                          Corporate

                        	 	 	
                          Individual

                        	 
	
                          President
      & CEO

                        	 	
                          n.a.

                        	 	 	100	%	 	 	0	%
	
                          Senior
      Vice President

                        	 	
                          Vorstand

                        	 	 	75	%	 	 	25	%
	
                          Vice
      President

                        	 	
                          Vorstand

                        	 	 	75	%	 	 	25	%
	
                          Executive
      Director

                        	 	
                          Vice
      President

                        	 	 	75	%	 	 	25	%
	
                          Senior
      Director

                        	 	
                          Senior
      Director

                        	 	 	50	%	 	 	50	%
	
                          Director

                        	 	
                          Director

                        	 	 	50	%	 	 	50	%
	
                          Associate
      Director

                        	 	
                          Associate
      Director

                        	 	 	25	%	 	 	75	%
	
                          Senior
      Manager

                        	 	
                          Senior
      Manager

                        	 	 	25	%	 	 	75	%

                

              

            

          

        

      

    

     

    
      	
              7.

            	
              Assessment
      of Performance

            

    

     

    
      	
              7.1.

            	
              Achievement
      of Corporate Goals

            

    

     

    Within 30
days after the end of the Plan year, the Chief Executive Officer will present to
the Committee his assessment of the achievement of the corporate goals for that
Plan year.  The Committee will review and discuss the assessment with
the Chief Executive Officer, and will determine the percentage of the
achievement of the corporate goals during a meeting of the Committee in a closed
session.  The same payment multiplier for the corporate goals
component will be used for all Plan Participants in any given year.

     

    
      	
              7.2.

            	
              Achievement
      of Personal Goals

            

    

     

    Within 30
days after the end of the Plan year, the Chief Executive Officer will present to
the Committee his assessment of the achievement of the personal goals of each
executive officer for that Plan year.  The Committee will review and
discuss the assessment with the Chief Executive Officer, and will determine the
percentage of the achievement of the corporate goals during a meeting of the
Committee in consultation with the Chief Executive Officer.

     

    Each
supervisor will determine the achievement of the personal goals of the
Associates reporting to him, subject to the approval of the executive officer
responsible for the applicable department.

    
      
         

      

      
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              7.3.

            	
              Determination
      of Award Multiplier

            

    

     

    The
following scale will be used to determine the actual award multiplier for
incentive award calculations based upon the achievement of corporate and
personal goals.  Separate payment multipliers will be established for
both the corporate and the personal goals components of each
award.  In making a determination with respect to the achievement of a
particular goal, the Committee (when assessing the achievement of corporate
goals and the achievement of personal goals of the executive officers) or the
assessing supervisor may take into account any measurable factors as well as the
overall performance in view of prevailing conditions.

    

    
      
        
          
            
              	
                      Performance Category

                    	 	
                      Award Multiplier

                    
	
                      1.    
      Goal was achieved or exceeded

                    	 	
                      75%
      - 150%

                    
	
                      2.    
      Goal was mostly achieved

                    	 	
                      50%
      - 75%

                    
	
                      3.    
      Goal was partially achieved

                    	 	
                      25%
      - 50%

                    
	
                      4.    
      Goal was mostly not achieved

                    	 	
                      0%

                    

            

          

        

      

    

     

    
      	
              8.

            	
              Calculation
      of Cash Incentive Award

            

    

     

    
      	
              8.1.

            	
              The
      example below shows sample cash incentive award calculations under the
      Plan.  First, a total target award is calculated by multiplying
      the Plan Participant’s base salary by the target award
      multiplier.  This dollar figure is then divided between its
      corporate component and its individual component based on the performance
      factor mix for that specific position.  This calculation
      establishes specific dollar target awards for the performance period for
      both the individual and corporate components of the
  award.

            

    

     

    
      	
              8.2.

            	
              At
      the end of the performance period, corporate and individual award
      multipliers will be established using the criteria described
      above.  The corporate award multiplier, which is based on
      overall corporate performance, is used to calculate corporate performance
      awards for all Plan Participants.  This is accomplished by
      multiplying the target corporate award established for each individual at
      the beginning of the performance period by the actual award
      multiplier.  The individual award multiplier, which is based on
      an individual’s performance against objectives, is used in the same way to
      calculate the actual individual performance
  award.

            

    

    
      
         

      

      
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                                  Example:

                                	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	
                                  Target Award Calculation

                                	 	 
      	 	 
      
	
                                  Position:

                                	 	
                                  Executive
      Director

                                
	
                                  Base
      Salary:

                                	 	
                                  $120,000

                                	 	 
      
	
                                  Target
      Award Multiplier:

                                	 	
                                  25%

                                	 	 
      
	
                                  Target
      Award (in dollars):

                                	 	
                                  $30,000

                                	 	
                                  ($120,000
      x 25%)

                                
	 
      
	
                                  Weighting of Corporate and Personal Goals for
      Executive Directors

                                
	
                                  Corporate
      goals:

                                	 	
                                  75%

                                	 	 
      
	
                                  Personal
      goals:

                                	 	
                                  25%

                                	 	 
      
	 
      	 	 
      	 	 
      
	
                                  Target Award

                                	 	 
      	 	 
      
	
                                  Target
      Award based on corporate goals:

                                	 	
                                  $22,500

                                	 	
                                  ($30,000
      x 75%)

                                
	
                                  Target
      Award based on personal goals:

                                	 	
                                  $7,500

                                	 	
                                  ($30,000
      x 25%)

                                
	 
      
	
                                  Assumed payment multipliers based on assessment of
      corporate and personal goal achievement:

                                
	
                                  Award
      Multiplier for corporate goals

                                	 	
                                  75%

                                	 	 
      
	
                                  Award
      Multiplier for personal goals

                                	 	
                                  125%

                                	 	 
      
	 
      	 	 
      	 	 
      
	
                                  Actual Incentive Award

                                	 	 
      	 	 
      
	
                                  Corporate
      component

                                	 	
                                  $16,875

                                	 	
                                  ($22,500
      x 75%)

                                
	
                                  Individual
      component

                                	 	
                                  $9,375

                                	 	
                                  ($7,500
      x
125%)

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      	
              9.

            	
              Payment
      of the Incentive Award

            

    

     

    
      	
              9.1.

            	
              Annual
      performance reviews for Plan Participants will be completed before March
      31 of the year following the Plan year.  Payment of incentive
      awards will be made as soon as practicable
      thereafter.  Incentive award calculations will be based on the
      Plan Participant’s base salary as of December 31 of the Plan
      year.  In addition to the required review process, incentive
      award payments to the President & CEO and to the Senior Vice President
      and CFO will be made after the completion and issuance of Micromet, Inc.’s
      year-end audited Financial Statements for the Plan
  year.

            

    

     

    
      	
              9.2.

            	
              Plan
      Participants, who have been in an eligible position for less than a year,
      but for at least three months, will receive a pro-rata bonus based on the
      number of days in an eligible
      position.  Pla  Participants promoted during the year
      from one “Target Award Multiplier” level to another will have their
      incentive award calculated using their base pay on December 31 of the Plan
      year.  Providing the promotion occurred prior to October 1 of
      the Plan year, the calculation will be pro-rated, based on the number on
      months at each Target Award Multiplier level.  If the promotion
      occurred after October 1 of the Plan year, the entire calculation will be
      based on the Target Award Multiplier percentage applicable prior to the
      promotion.

            

    

     

    
      	
              10.

            	
              Termination

            

    

     

    If a Plan
Participant has given or received a notice of termination or if a Plan
Participant’s employment is terminated prior to the payment of the incentive
award under this Plan, Micromet will have sole and absolute discretion as to
whether or not to pay an incentive award. If Micromet decides to pay an
incentive award to such Plan Participant, Micromet will have sole and absolute
discretion as to whether to pay the full amount or a portion of the amount of
the incentive award that may be payable to the Plan Participant in accordance
with the provisions of this Plan.

    
      
         

      

      
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              11.

            	
              Absolute
      Right to Alter or Abolish the Plan

            

    

     

    Micromet
reserves the right in its absolute discretion to abolish the Plan at any time or
to alter the terms and conditions under which incentive compensation will be
paid.  Such discretion may be exercised any time before, during, and
after the Plan year is completed.  No Plan Participant will have any
vested right to receive any compensation hereunder until actual delivery of such
compensation.

     

    
      	
              12.

            	
              Employment
      Duration/Employment Relationship

            

    

     

    This Plan
does not, and Micromet’s policies and practices in administering this Plan do
not, constitute a contract or other agreement concerning the duration of any
Plan Participant’s employment with Micromet.  The employment
relationship of each Plan Participant of Micromet, Inc. is “at will” and may be
terminated at any time by Micromet, Inc. or by the Plan Participant, with or
without cause.  The employment relationship of each Plan Participant
of Micromet AG is governed by the employment agreement of the Plan Participant
and applicable German law.

    
      
         

      

      
        7***Text
Omitted and Filed Separately

    Confidential
Treatment Requested

    Under
17 C.F.R. §§ 200.80(b)(4), and 240.24b-2

     

    OPTION,
COLLABORATION AND LICENSE AGREEMENT

     

    This
Option, Collaboration and License Agreement (the “Agreement”) is made and
entered into effective as of January 12, 2009 (the “Effective Date”), by and
between Micromet
AG, having its principal place of business at Staffelseestrasse 2, 81477
Munich, Germany (“Micromet”), and Bayer
Schering Pharma AG, having its principal place of business at
Muellerstrasse 178, 13353 Berlin, Germany (“Bayer”).  Micromet
and Bayer each may be referred to herein individually as a “Party,” or collectively as the
“Parties.”

     

    Recitals

     

    A.           Micromet
has developed a proprietary platform for discovery, research, and development of
BiTE®
antibodies, which may have applications in the treatment of cancer and other
diseases.

     

    B.           Bayer
is a pharmaceutical company with experience in the development and
commercialization of pharmaceutical products.

     

    C.           Micromet
desires to grant, and Bayer desires to receive an option to collaborate with
Micromet on the research and parts of the development of products comprising
BiTE antibodies binding to a specific target in accordance with the terms
described below.

     

    D.           Upon
exercise of the option rights provided hereunder, the Parties will collaborate
on the development of such products, with Bayer being responsible for the
further development and commercialization of such products on a worldwide
basis.

     

    In
consideration of the foregoing premises and the mutual promises and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

     

    Agreement

     

    
      	
              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.

     

    
      1.2           [***]
has the meaning as defined in Section 4.6.5.

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    1.3           “Applicable Law” means the
laws, rules, and regulations, including any statutes, rules, regulations,
guidelines, or other requirements that may be in effect from time to time and
apply to the development, manufacture, registration, and marketing of the
Product in the countries of the Territory, including any such statutes, rules,
regulations, guidelines, or other requirements of the FDA or the
EMEA.

     

    1.4           “[***]” means any Third
Party performing an activity pursuant to the [***] on the basis of a contractual
arrangement with Bayer.

     

    1.5           [***]
means any Patents or Know-How generated by employees or agents of a [***] in the
course of, in furtherance of, and as a direct result of such employees or agents
performing an activity pursuant to the [***] that (i) are [***], (ii) [***] of
[***] or [***] of [***], and (iii) [***.]

     

    1.6           [***]
has the meaning as defined in Section 7.3.1.

     

    1.7           “[***] Development Plan” means the
description of the development activities for the Product under the [***] from
the date of the plan.

     

    1.8           “[***] Technology” means any Patent
or Know-How (i) owned or Controlled by [***] or its Affiliates as of the
Effective Date; or (ii) independently discovered or reduced to practice after
the Effective Date by [***] or its Affiliates in performing activities other
than the [***] or [***] conducted pursuant to this Agreement.

     

    1.9           “[***]” means the
development program conducted by or on behalf of [***] or any of [***] under
this Agreement for the Product [***] for such Product.

     

    1.10           “[***]” means any Patents or
Know-How that (i) [***] that perform activities pursuant to the [***] conducted
under this Agreement in the course of, in furtherance of, and as a direct result
of such employees, agents or independent contractors performing an activity
pursuant to the [***]; (ii) [***]of [***] or [***] of [***]; and (iii) are [***]
[***] [***] [***] [***] [***] [***;] provided that the foregoing will not
include (a) any [***] Technology; and (b) any [***] by [***] of [***] of the
[***] in the course of, in furtherance of, and as a direct result of such
employees, agents or independent contractors performing an activity
[***].

     

    1.11           “BiTE Antibody” means any
bi-specific, single-chain antibody binding via [***] to T cells.

     

    1.12           “BLA” means a Biologics License
Application, supplemental Biologics License Application, or similar application
to be filed with the FDA, and any equivalent applications in jurisdictions
outside the United States of America, including a marketing approval application
for submission to the EMEA.

     

    1.13           “Business Day” means any day
that is not a public holiday in the Federal Republic of Germany, the State of
Berlin, or the State of Bavaria.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.14           “Change of Control” means with
respect to any entity (the “Acquired Entity”) (a) any
sale, exchange, transfer, or issuance to or acquisition by one or more Third
Parties of shares representing more than fifty percent (50%) of the aggregate
ordinary voting power entitled to vote for the election of directors represented
by the issued and outstanding stock of the Acquired Entity or any Affiliate that
directly or indirectly controls the Acquired Entity (whether by sale or merger,
but excluding the issuance of shares in financing transactions), whether such
sale, exchange, transfer, issuance or acquisition is made directly or
indirectly, beneficially or of record or in one transaction or a series of
related transactions; (ii) a merger or consolidation under applicable law of the
Acquired Entity with a Third Party in which the shareholders of the Acquired
Entity or any Affiliate that directly or indirectly controls the Acquired Entity
immediately prior to such merger or consolidation do not continue to hold
immediately following the closing of such merger or consolidation at least fifty
percent (50%) of the aggregate ordinary voting power entitled to vote for the
election of directors represented by the issued and outstanding stock of the
entity surviving or resulting from such consolidation; or (iii) a sale or other
disposition of all or substantially all of the assets of the Acquired Entity to
one (1) or more Third Parties in one transaction or a series of related
transactions.

     

    1.15           “Collaboration Target” means
the whole or part of [***] (“[***]”) identified by the [***] entry name [***]
and [***]  and all of [***].

     

    1.16           “Collaboration Program” means
the [***] conducted pursuant to this Agreement with respect to the Collaboration
Target.

     

    1.17           “[***]” means (i) any
invention that is conceived, and any Know-How that is generated solely or
jointly by employees, agents or independent contractors of either or both
Parties in the course of, in furtherance of, and as a direct result of such
employees, agents or independent contractors performing an activity pursuant to
the [***], and (ii) any Patent to the extent claiming such invention or
Know-How.

     

    1.18           “Commercialization” means the
manufacture, marketing, promotion, advertising, selling and distribution of the
Product in a country after all required Marketing Approvals have been obtained
in such country.  The term “Commercialize” has a
correlative meaning.

     

    1.19           “Commercially Reasonable
Efforts” means the level of efforts consistent with the reasonable
practices of (i) in the case of Bayer: a company in the
prescription pharmaceutical industry comparable in size and operations to Bayer,
or (ii) in the case of Micromet: a company in the discovery, research and
development of antibodies, determined, in each case, based upon conditions then
prevailing, [***] provided,
however, that Commercially Reasonable Efforts requires that the Party in
accordance with its standard practices [***].

     

    1.20           “Control” and, with correlative
meaning, the term “Controlled”, means, with
respect to a Party and any Patent, Know-How, or other intellectual property
right, the ability to grant the other Party access, a license, a sublicense or
the right to use (as applicable) such Patent, Know-How, or intellectual property
right as provided in this Agreement without violating the terms of any license
granted by, or agreement or other arrangement with, any Third
Party.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1.21           “D2 Decision” means the
decision by Bayer whether or not to continue the development of a Product
following the review of the data and information as further described in Exhibit
A.

     

    1.22           “D3 Decision” means the
decision by Bayer whether or not to continue the development of a Product
following the review of the data and information as further described in Exhibit
A.

     

    1.23           “Development Expenses” means
all costs and expenses incurred by a Party in carrying out any activities to be
performed pursuant to the [***] Development Plan, calculated in accordance with
U.S. generally accepted accounting principles (or IFRS, if and when enacted in
the U.S.) consistently applied and such Party’s cost accounting systems,
provided that the cost of a Party’s FTEs performing such activities will be
calculated at the FTE Rate.

     

    1.24           “EMEA” means the European
Medicines Agency, or any successor agency thereto.

     

    1.25           “Executive Officer” means (a)
in the case of [***], the [***] of [***]; and (b) in the case of [***], the
[***].

     

    1.26           “FDA” means the United States
Food and Drug Administration, or any successor agency thereto.

     

    1.27           “Field” means the treatment of
diseases and conditions in humans or animals.

     

    1.28           “First Commercial Sale” means
the date on which Bayer or an Affiliate or a licensee of Bayer first sells
commercially for use or consumption by the public, following receipt of all
Marketing Approvals necessary to commence regular commercial sales, a Product to
a Third Party. A sale of a Product by Bayer to an Affiliate or licensee will not
constitute a First Commercial Sale.  Sales prior to receipt of all
Marketing Approvals necessary to commence regular commercial sales in a
particular country that are made in furtherance of obtaining Marketing Approval
in such country, such as so-called “treatment IND sales,” “named patient sales”
and “compassionate use sales,” will not be construed as a First Commercial
Sale.

     

    1.29           “FTE” means the equivalent of a total of [***]
hours per year of scientific or technical work on or directly related to the
execution or implementation of the [***] Development Plan, or other tasks to be
performed under this Agreement, carried out by a qualified employee or
consultant of a Party.  Scientific or technical work may include, but
is not limited to, research, experimental laboratory work, developing
manufacturing processes for the Product, conducting pre-clinical and clinical
development of the Product, recording and writing up results, reviewing
literature and references, holding scientific discussions, and attending
conferences in the relevant field.

     

    1.30           “FTE Rate” means €[***] per
FTE, which amounts include, for each FTE, [***] and [***] (excluding items
provided for separately under the applicable Development Plan), [***] and a
[***] plus [***].

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    1.31           “IND” means any clinical trial
application, including any Investigational New Drug Application filed or to be
filed with the FDA, and any equivalent application in jurisdictions outside the
United States of America, including Investigational Medicinal Product Dossier
filed or to be filed with the EMEA.

     

    1.32           “Indication” means a tumor of
an organ or any discrete form or precursor condition of a tumor or treatment
thereof for which a BLA may be filed.

     

    1.33           [***]
has the meaning as defined in Section 7.3.1.

     

    1.34           “[***] Development Plan” means the
plan and budget for the research and development of the Product during the
[***], as may be amended in accordance with Section 4.3.

     

    1.35           “[***]” means the research and
development program of the Product conducted [***] up to and including [***]
that have been initiated prior to the [***] for the Product.

     

    1.36           “JPT” has the meaning as
defined in Section 3.6.1.

     

    1.37           “JSC” has the meaning as
defined in Section 3.1.

     

    1.38           “Know-How” means (a) any
scientific or technical information, results and data of any type whatsoever, in
any tangible or intangible form whatsoever, that is not in the public domain or
otherwise publicly known, including databases, practices, methods, techniques,
specifications, formulations, formulae, knowledge, know-how, skill, experience,
test data including pharmacological, medicinal chemistry, biological, chemical,
biochemical, toxicological and clinical test data, analytical and quality
control data, stability data, studies and procedures, and manufacturing process
and development information, results and data, and (b) any biological, chemical,
or physical materials that are not in the public domain or otherwise available
to the public; all to the extent not claimed or disclosed in a
Patent.

     

    1.39           “License Effective Date” has
the meaning as defined in Section 2.3.

     

    1.40           “Licensed Technology” means the
Micromet Technology and Sublicensed Technology.

     

    1.41           “Major Market” means each of
the [***], the [***], [***], [***], [***], [***] and [***].

     

    1.42           “Marketing Approval” means with
respect to a regulatory jurisdiction, any and all approvals, [***] of any
federal, state or local regulatory agency, department, bureau or other
governmental entity, necessary for [***], Commercialization or sale of a Product
in such regulatory jurisdiction, including, where applicable, (a) [***] in such
regulatory jurisdiction, (b) [***] (including any prerequisite manufacturing
approval or authorization related thereto), (c) [***] approval and (d) [***] and
[***].

     

    1.43           [***]
means any Third Party engaged in the research, development or Commercialization
of BiTE Antibodies on the basis of a license under the Micromet Technology or
any other contractual arrangement with Micromet relating to the Micromet
Technology.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    1.44           “[***]” means any Patents or
Know-How of a [***] that (i) are [***] (ii) [***] and (iii) [***].

     

    1.45           “[***] Technology” means (i) [***]
generated solely by [***] Affiliates’ employees or by
a Third Party on Micromet’s behalf; and (ii) any Patent or Know-How generated by
an employee or independent contractor of [***] during the [***] conducting
research and development activities on BiTE Antibodies binding to the
Collaboration Target, excluding the [***] Patent or any Know-How
comprising inventions claimed therein.

     

    1.46           “[***]” means any Patents or
Know-How licensed or acquired by Micromet from a Third Party other than a [***]
that (i) [***], and (ii) [***].

     

    1.47           “Micromet Product” means any product
consisting of or containing a BiTE Antibody binding to a target other than the
Collaboration Target.

     

    1.48           “Micromet Technology” means (i)
the Patents listed on Exhibit C and any
Know-How necessary or useful for the development and Commercialization of the
Product in the Field, each to the extent Controlled by Micromet as of the
Effective Date; and (ii) any [***] [***] and [***] with respect to which the
Parties have executed an amendment to this Agreement pursuant to Section
7.4.2.

     

    1.49           [***]” means any Patents or
Know-How, other than [***], that (i) [***] (ii) [***] and (iii)
[***].

     

    1.50           “Net Sales” means the amount
invoiced by  Bayer, its Affiliates or sublicensees for sales of the
Product to unaffiliated Third Parties less the following deductions applicable
to the Product determined in accordance with U.S. GAAP or IFRS and with Bayer’s,
or its Affiliate’s or sublicensee’s standard methods as generally and
consistently applied:

     

    (a)           transportation
charges, distribution, packing and handling charges, and insurance charges to
the extent included in the invoice price;

     

    (b)           sales
and excise taxes or customs duties or any other governmental charges imposed
upon the sale of the Product (other than taxes based on income), to the extent
included in the invoice price;

     

    (c)           sales
performance bonuses paid to distributors, and rebates and premiums granted or
allowed in connection with the sale of a Product;

     

    (d)           allowances
or credits to customers on account of governmental requirements, price
differences arising in connection with sales in countries where the price is
fixed in local currency, but payments are made in another currency, rejection,
outdating, returns or recalls of the Product;

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        6

        
          

        

      

      
         

      

    

     

    (e)           quantity
discounts, cash discounts or chargebacks granted in connection with the sale of
the Product;

     

    (f)           provisions
for retroactive price reductions;

     

    (g)           costs
of customer programs agreed upon by the Parties in writing such as cost
effectiveness or patient assistance studies or programs designed to aid in
patient compliance with medication schedules in connection with the sale of a
Product;

     

    (h)           [***].

     

    Sales
between the Parties, or between the Parties and their Affiliates or
sublicensees, for resale will be disregarded for purposes of calculating Net
Sales.  The Parties recognize that (a) Bayer’s customers may include
persons in the chain of commerce who enter into agreements with Bayer as to
price even though title to the Product does not pass directly from Bayer to such
customers and even though payment for such Product is not made by such customers
directly to Bayer and (b) in such cases, chargebacks paid by Bayer to or through
a third party (such as a wholesaler) can be deducted by Bayer pursuant to
subsection (e) above. Any deductions above which involve a payment by Bayer will
be taken as a deduction against aggregate sales for the period in which the
payment or deduction is made. Any of the items set forth above that would
otherwise be deducted from the invoice price in the calculation of Net Sales but
which are separately charged to, and paid by, Third Parties will not be deducted
from the invoice price in the calculation of Net Sales. In the case of any sale
of a Product for consideration other than cash, such as barter or countertrade,
Net Sales will be calculated on the fair market value of the consideration
received as agreed by the Parties. If any discounts or other similar deductions
are granted or allowed in connection with sales of  the Product
together with other products of Bayer, its Affiliates or sublicensees, the
discounts or deductions will be allocated to Products and such other products on
a pro rata basis based on the respective list prices of the Product and such
other products.

     

    In the
event a Product is sold in the form of a combination product containing one or
more active ingredients in addition to a Product, Net Sales for such combination
product will be adjusted by multiplying actual Net Sales of such combination
product by the fraction A / (A+B) where A is the invoice price of the Product,
if sold separately, and B is the invoice price of any other active ingredient or
ingredients in the combination, if sold separately. If, on a country-by-country
basis, the other active ingredient or ingredients in the combination are not
sold separately in that country, Net Sales will be calculated by multiplying
actual Net Sales of such combination product by the fraction A / C where A is
the invoice price of the Product if sold separately, and C is the invoice price
of the combination product. If, on a country-by-country basis, neither the
Product nor the other active component or components of the combination product
is sold separately in said country, Net Sales will be determined between the
Parties in good faith.

     

    1.51           “Patents” means (a) all patents
and patent applications in any country or supranational jurisdiction, and (b)
any provisionals, substitutions, divisions, continuations, continuations in
part, reissues, renewals, registrations, confirmations, reexaminations,
extensions, supplementary protection certificates and the like, of any such
patents or patent applications.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        7

        
          

        

      

      
         

      

    

     

    1.52           “Phase 1 Trial” means a
clinical trial of a pharmaceutical product on healthy subjects or patients with
the primary purpose of determining safety, metabolism and pharmacokinetic
properties and clinical pharmacology of such product, as more fully defined in
21 C.F.R. § 312.21(a), or its successor regulation, or the equivalent in any
foreign country, including any clinical trial that is a combination Phase 1
Trial and Phase 2 Trial.

     

    1.53           “Phase 2 Trial” means a
clinical trial in human patient population to determine the safe and effective
dose range in the proposed therapeutic indication, as more fully defined in 21
C.F.R. § 312.21(b), or its successor regulation, or the equivalent in any
foreign country.

     

    1.54           “Phase 3 Trial” means a
clinical trial in human patients designed to (a) establish that a drug is safe
and efficacious for its intended use; (b) define warnings, precautions and
adverse reactions that are associated with the drug in the dosage range to be
prescribed; and (c) support BLA Approval of such drug, as more fully defined in
21 C.F.R. § 312.21(c), or its successor regulation, or the equivalent in any
foreign country.

     

    1.55           “Pivotal Trial” means (a) Phase
3 Trial or (b) a Phase 2 Trial that is of appropriate size and design to
establish that a pharmaceutical product is safe and effective for its intended
use, to define warnings, precautions and adverse reactions that are associated
with the pharmaceutical product in the dosage range to be prescribed, and to
support a BLA for such pharmaceutical product or label expansion of such
pharmaceutical product. For clarity, the determination of whether a Phase 2
Trial is a Pivotal Trial for purposes of this Agreement will be based upon a
determination by the relevant Regulatory Authority that such trial could be
sufficient, depending on its outcome, to support the filing of a BLA for such
pharmaceutical product or label expansion of such pharmaceutical
product.

     

    1.56           “Positive D2 Decision” means a
D2 Decision to continue a [***].

     

    1.57           “Positive D3 Decision” means a
D3 Decision to continue a [***].

     

    1.58           “Product” means any product
containing or comprising a BiTE Antibody binding to the Collaboration Target
developed pursuant to this Agreement, including all forms, presentations, doses
and formulations thereof alone or in combination with other therapeutically
active ingredients; it being understood that all pharmaceutical products that
contain the same BiTE Antibody will be considered the same Product.

     

    1.59           “Project Team Leader” has the
meaning as defined in Section 3.6.2.

     

    1.60           [***] Patent” means the patent
application filed on [***] under the no. [***] on the BiTE Antibody directed
against [***] and any Patents arising therefrom.

     

    1.61           “Regulatory Authority” means
any national (e.g., the FDA), supra-national (e.g., the European Commission, the
Council of the European Union, or the European Medicines Agency), regional,
state or local regulatory agency, department, bureau, commission, council or
other governmental entity in each country of the world involved in the granting
of Marketing Approval for the Product.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        8

        
          

        

      

      
         

      

    

     

    1.62           “Regulatory Submission” means
any submission or application made or filed with a Regulatory Authority,
including any IND or BLA.

     

    1.63           “Sublicensed Technology” means
any Patent or Know-How Controlled by Micromet pursuant to the Agreements listed
in Exhibit D-1
and Exhibit
D-2.

     

    1.64           “Territory” means all countries
of the world, [***].

     

    1.65           “Third Party” means any entity
other than Micromet, Bayer or their respective Affiliates.

     

    1.66           “Valid Claim” means (a) an
issued claim of an issued patent that has not (i) expired or been canceled, (ii)
been declared invalid by a decision of a court or other appropriate body of
competent jurisdiction, from which no appeal is or can be taken, (iii) been
admitted to be invalid or unenforceable through reissue, disclaimer or
otherwise, or (iv) been abandoned or disclaimed; and (b) a claim included in a
pending patent application that is being actively prosecuted and that has not
been (i) canceled, (ii) withdrawn from consideration, (iii) finally determined
to be unallowable by the applicable governmental authority (from which no appeal
is or can be taken), or (iv) abandoned or disclaimed, provided, however, that if a
claim of a patent application has been pending for more than [***] years, such
claim will not constitute a Valid Claim for the purposes of this Agreement
unless and until a Patent issues with such claim.

     

    
      	
              2.

            	
              Grant
      of Option

            

    

     

    2.1           Option
Grant.  Micromet hereby grants Bayer an exclusive option (the
“Option”) during the
Option Period (defined below) to license the Licensed Technology for the
development and Commercialization of the Product and to collaborate with
Micromet regarding such development and Commercialization of such Product on the
terms set forth in this Agreement.

     

    2.2           Option Fee.  Bayer
will pay to Micromet a non-refundable, non-creditable option fee of €4,500,000
in accordance with the terms of Section 9.1 within thirty (30) days after the
Effective Date.

     

    2.3           Option
Exercise.  Bayer may exercise the Option at any time during a
period commencing on the Effective Date and ending at midnight (Central European
Time) of January 5, 2010 (the “Option Period”) by providing
Micromet with written notice (“Option Exercise Notice”) of
Bayer’s desire to exercise the Option and making a payment to Micromet in the
amount of €[***](the “Option Exercise Fee”). Bayer
will notify Micromet, on a non-binding basis, of its intent regarding the
exercise of the Option not later than ninety (90) days prior to the expiration
of the Option Period.  Promptly after receipt of such declaration of
intent, Micromet will provide to Bayer a schedule listing the exceptions, if
any, to the representations and warranties made by Micromet in Section 15.2 or
provide a written confirmation that there are none. Micromet will continuously
provide updates to such schedule or confirmation whenever there is a change
until one (1) Business Day after receipt of the Option Exercise Notice where
Micromet will provide a final schedule or confirmation. If such final schedule
or confirmation deviates from the last schedule or confirmation received from
Micromet prior to dispatch of the Option Exercise Notice, Bayer may withdraw the
Option Exercise Notice by providing written notice to Micromet within ten (10)
Business Days from receipt of the final schedule or confirmation. Upon receipt
by Micromet of the Option Exercise Notice and the Option Exercise Fee (the
“License Effective
Date”) prior to the expiration of the Option Period, Bayer will be
granted the rights in this Agreement and all of the terms and conditions of this
Agreement will be binding on the Parties, unless it withdraws its Option
Exercise Notice in accordance with this Section 2.3.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        9

        
          

        

      

      
         

      

    

     

    2.4           Exclusivity.  During
the Option Period, Micromet will not (i) negotiate, offer, enter into, or
otherwise discuss with any Third Party any agreement granting any option or
license with respect to the Licensed Technology for the Collaboration Target; or
(ii) collaborate or provide services to a Third Party with respect to the
Micromet Technology for the Collaboration Target or otherwise grant rights that
would prevent, upon the exercise of the Option, the grant of the rights,
licenses, and interests to Bayer under the terms and conditions of this
Agreement.

     

    2.5           Updates.  During the
Option Period, Micromet will provide
Bayer with a quarterly update regarding its activities in respect of the BiTE
Antibody binding to the Collaboration Target. Micromet will provide such update
by telephone conference or a meeting, if the Parties agree, to designated
representatives of Bayer. In addition, Micromet will provide a written report on
the status and the results of such activities by September 30, 2009 and will
thereafter, upon request of Bayer, provide Bayer the opportunity to review and
discuss with Micromet any data and results generated during the Option
Period.

     

    2.6           Binding
Effect.  Prior to the License Effective Date, (a) only the
following Sections are legally binding on the Parties: 1, 2, 4.5.1, 4.6.1,
7.8.2, 7.8.3, 9.1, 10, 11, 12, 13.4, 15, 16 and 17, and (b) the foregoing terms
(other than Section 10, 13.4, 15, 16 and 17) will terminate and be of no further
force and effect upon the earlier of (i) termination of this Agreement by Bayer
pursuant to Section 12.3.1 or (ii) expiration of the Option Period without
exercise of the Option in accordance with Section 2.3.

     

    
      	
              3.

            	
              Collaboration
      Governance

            

    

     

    3.1           Establishment of Joint Steering
Committee.  Promptly after the License Effective Date, the
Parties will establish a joint steering committee (the “JSC”) to oversee the
[***].  Each Party will appoint three employees to serve as their
representatives on the JSC. From time to time, on written notice to the other
Party, Micromet and Bayer each may substitute any of its representatives on the
JSC unable to attend a meeting or replace a representative by a new one. Each
Party will designate one of its members of the JSC as the “Co-Chair.” Subject to
the provisions of this Section 3, the JSC will establish its own procedural
rules for its operation.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    3.2           Tasks of the
JSC.  The JSC will: (a) review and approve any updates or
amendments to the [***] Development Plan, including, subject to Section 4.3, any
changes to the budget for the [***]; (b) monitor the progress of and coordinate
the activities undertaken pursuant to the [***] Development Plan; (c) decide on
the achievement of scientific or technical objectives and any go/no go criteria
as described in the [***] Development Plan; (d) discuss and consider which Party
files and prosecutes Patents for an invention within the [***] in accordance
with the provisions of Section 7.8.1; (e) resolve any issues that could not be
resolved by the JPT; (f) propose and consider amendments to the terms of this
Agreement, provided that any such amendment will be made by the Parties solely
pursuant to Section 17.6; and (g) take such other actions as are expressly
delegated to the JSC in this Agreement.  The JSC will not have any
power to amend this Agreement and will have only such powers as are specifically
delegated to it under this Agreement.

     

    3.3           JSC Meetings.  The
JSC will meet not less than once every calendar quarter during the first year
after the License Effective Date, and not less than once every six months
thereafter. Meetings may be held in person or by means of telecommunication
(telephone, video, or web conferences); provided that at least two meetings
during the first year after the License Effective Date and one meeting per year
thereafter will be held in person. The JSC may meet more frequently by agreement
of the Parties or at the reasonable request of a Party with not less than twenty
(20) Business Days notice to the other.  The Co-Chairs will
alternately be responsible for organizing the meetings of the JSC and for
distributing the agenda of the meetings.  The Co-Chairs will include
on the agenda any item within the scope of the responsibility of the JSC that is
requested to be included by a Party, and will distribute the agenda to the
Parties no less than one week before any meeting of the JSC.  Each
Party may, with the prior approval of the other Party which will not be
unreasonably withheld, invite non-voting employees, consultants or advisors
(which consultants and advisors will be under an obligation of confidentiality
no less stringent than the terms set forth in Section 10) to attend any meeting
of the JSC.  Each Party will bear its own costs associated with
holding and attending JSC meetings.

     

    3.4           Meeting
Minutes.  The Co-Chair (or its designee) responsible for the
organization of the respective JSC meeting will prepare the minutes, and send it
to all members of the JSC for review and approval within twenty (20) days after
the meeting.  Each Party will send any objections against the accuracy
or completeness of such minutes by providing written notice to the other members
of the JSC within fourteen (14) days of receipt of the minutes.  In
the event of any such objection that is not resolved by mutual agreement of the
Parties, such minutes will be amended to reflect such unresolved
dispute.

     

    3.5           Decision
Making

     

    3.5.1           The
JSC will take action on matters within its power by unanimous consent of the
Parties, with each Party having a single vote, irrespective of the number of
representatives actually in attendance at a meeting, or by a written resolution
signed by its representatives.

     

    3.5.2           If
the JSC is unable to reach unanimous consent on a particular matter, such matter
will be resolved in a second JSC meeting to be held within twenty (20) Business
Days from the meeting in which the disputed matter has remained unresolved. In
the event that the JSC is again unable to resolve the matter, either Party may
provide written notice of such dispute to the Executive Officer of the other
Party.  The Executive Officers (or their respective designees, who
must be members of the Party’s senior management, but who are not members of the
JSC) of each Party will meet at least once in person to discuss the dispute and
use their good faith efforts to resolve the JSC dispute within thirty (30) days
after submission of such dispute to such officers. If the Executive Officers (or
their designees) cannot reach agreement with respect to a JSC dispute within the
thirty (30) day time period, [***].

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
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    3.5.3           Notwithstanding
the terms of Section 3.5.2 above, if the matter concerns a dispute regarding the
interpretation of this Agreement, the performance or alleged nonperformance of a
Party’s obligations under this Agreement, or any other alleged breach of this
Agreement, such matter will be resolved in accordance with the terms of Section
17.4.

     

    3.6           Joint
Project Team.

     

    3.6.1           Promptly
after the License Effective Date, the Parties will establish a joint project
team (the “JPT”) for
managing the day-to-day work within the [***], consisting of an appropriate
number of representatives of each Party.  In particular, the JPT will
have the following tasks: (a) developing and proposing any updates or amendments
to the [***] Development Plan; (b) coordinating the activities undertaken
pursuant to the [***] Development Plan, including assigning specific development
tasks to the appropriate Party consistent with the terms of Section 4; (c)
ensuring timely performance of the activities under the [***] Development Plan;
(d) monitoring the expenses of the [***] and compliance with the budget in the
[***] Development Plan; (e) making proposals on achievement of scientific or
technical objectives and go/no go criteria pursuant to the [***] Development
Plan; (f) making proposals on which Party files and prosecutes Patents for an
invention within the [***] in accordance with the provisions of Section 7.8.1;
(g) supporting each Party’s Patent filings within the [***]; and (h) preparing
update reports for the Product and presenting such updates at the JSC
meetings.

     

    3.6.2           Each
Party will designate one of its JPT members as the project team leader (the
“Project Team Leader”)
who will be the primary contact person for the other Party for matters relating
to the development of the Product by such Party.  In order to ensure
regular information of the JSC on the progress with respect to the [***], the
Project Team Leaders will be permanent guests of the JSC.

     

    3.6.3           The
JPT will meet not less than once a quarter. Meetings may be held in person or by
means of telecommunication (telephone, video, or web
conferences).  The JPT may meet more frequently by agreement of the
Parties or at the reasonable request of a Party with not less than twenty (20)
Business Days notice to the other.  The Project Team Leaders will
alternately be responsible for organizing the meetings of the JPT and for
distributing the agenda of the meetings.  The Project Team Leaders
will include on the agenda any item within the scope of the responsibility of
the JPT that is requested to be included by a Party, and will distribute the
agenda to the Parties no less than one week before any meeting of the
JPT.  Each Party may, with the prior approval of the other Party which
will not be unreasonably withheld, invite non-voting employees, consultants or
advisors (which consultants and advisors will be under an obligation of
confidentiality no less stringent than the terms set forth in Section 10) to
attend any meeting of the JPT.  Each Party will bear its own costs
associated with holding and attending JPT meetings.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    3.6.4           The
Project Team Leader (or his or her designee) responsible for the organization of
the respective JPT meeting will prepare the minutes, and send it to all members
of the JPT for review and approval within twenty (20) days after the
meeting.  Each Party will send any objections against the accuracy or
completeness of such minutes by providing written notice to the other members of
the JPT within fourteen (14) days of receipt of the minutes.  In the
event of any such objection that is not resolved by mutual agreement of the
Parties, such minutes will be amended to reflect such unresolved
dispute.

     

    3.6.5           The
JPT will take action by unanimous consent of the Parties, with each Party having
a single vote, irrespective of the number of representatives actually in
attendance at a meeting, or by a written resolution signed by the designated
representatives of each Party.  If the JPT is unable to reach
unanimous consent on a particular matter, such matter will be submitted to the
JSC for resolution in accordance with Section 3.5.  The JPT will not
have any power to amend this Agreement and will have only such powers as are
specifically delegated to it under this Agreement.

     

    3.7           [***] of JSC and
JPT.  The JSC and the JPT will be [***].

     

    
      	
              4.

            	
              Product
      Development

            

    

     

    4.1           [***] Development
Plan.  The initial [***] Development Plan is attached
as  Exhibit
B.  Promptly following the License Effective Date, the Parties
will consider and discuss amendments to the initial [***] Development Plan to
reflect the anticipated activities, budgets and timelines then
applicable.  The [***] Development Plan and any amendments thereto
will be designed to accomplish the filing of INDs for the Product in one or more
Major Markets, will set specific objectives for carrying out development
activities in the course of the [***], will include a budget for such
activities, and will be reviewed and updated as necessary or appropriate by the
JPT and JSC in accordance with the provisions of Section 4.3.

     

    4.2           Allocation of
Responsibilities.  As and to the extent described in the [***]
Development Plan, the Parties will be responsible for the performance of the
activities as follows:

     

    4.2.1           Micromet
will be responsible for research and preclinical development of the Product up
to the filing of the first IND for the applicable Product, including any protein
engineering, and in vitro and in vivo pharmacology and laboratory studies within
the toxicology testing, except that Bayer will conduct certain preclinical
studies (e.g. imaging studies) as well as the in-life phase and histopathologic
evaluation of toxicology studies prior to the filing of the first IND for such
Product as further detailed in the [***] Development Plan.  Unless
otherwise agreed by the Parties, Micromet will generate BiTE Antibodies binding
to the Collaboration Target.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    4.2.2           Micromet
will be responsible for the development of a production cell line,
pre-formulation studies, bioanalytics and process development, and the
manufacturing of research-grade material, and Bayer will be responsible for
scale up, further process optimization and the manufacturing, fill & finish
of Product for GLP tox testing and clinical trials.

     

    4.2.3           The
Parties will collaborate on the Phase 1 Trials of the Product conducted during
the [***], with [***] holding the IND for the Product and taking the lead in the
performance of Phase 1 Trials and associated regulatory activities, and [***]
performing [***] and participating in the [***] of such Phase 1 Trials
(including [***] and the review and assessment of [***] and participation in the
discussions with the meetings with the [***] and the [***] for the various the
clinical trials).

     

    4.2.4           Bayer
will be fully responsible for the further development of the Product after
completion of [***] in accordance with the
[***] Development Plan, and the regulatory activities, including BLA
filings.

     

    4.3           Revisions of the [***] Development
Plan.  The JPT will periodically review and propose to the JSC
updates of the [***] Development Plan to reflect the progress achieved and the
further development activities to be undertaken by the Parties in the
development of the Product, but not less than once every year in conjunction
with the Parties’ budget and program review cycle.  Notwithstanding
anything in this Agreement, any of the following changes to a [***] Development
Plan may be implemented only by an amendment of this Agreement executed by two
duly authorized officers of Micromet and Bayer: (a) any reduction or increase of
any budget set forth in such [***] Development Plan by more than [***]; (b) any
reduction or increase of the aggregate amount to be spent during the [***] or in
a calendar year pursuant to such [***] Development Plan by more than [***]; (c)
any change to the allocation of responsibilities between the Parties set forth
in Section 4.2 with respect to such [***] Development Plan; and (d) the
allocation of responsibility for any tasks unassigned in the then-current [***]
Development Plan. In addition, any revisions to the [***] Development Plan must
be approved by the JSC in accordance with Section 3.2.

     

    4.4           Development
Expenses.  Bayer will bear its own Development Expenses and any
Development Expenses incurred by Micromet that have been budgeted in the [***]
Development Plan, and will pay such Development Expenses of Micromet as
specified in Section 8.1; provided, however, that Micromet will not have
any obligation to perform any activities under the [***] for which it is not
being reimbursed by Bayer, and provided further, that
Micromet will be reimbursed for activities that have been either delayed or
accelerated as required by Bayer in an amended [***] Development
Plan.

     

    4.5           Diligence
in Development

     

    4.5.1           Micromet
will use Commercially Reasonable Efforts to generate a BiTE Antibody binding to
the Collaboration Target, and to perform the activities assigned to it in the
[***] Development Plan.  All efforts of Micromet’s Affiliates will be
considered efforts of Micromet for the purpose of determining Micromet’s
compliance with its obligations under this Section 4.5.1.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    4.5.2           Bayer
will use Commercially Reasonable Efforts to perform the activities assigned to
it in the [***] Development Plan, to perform the [***] Development Plan, and to
develop and obtain Marketing Approval for the Product in the Major Markets. All
efforts of Bayer’s Affiliates, contractors or sublicensees will be considered
efforts of Bayer for the purpose of determining Bayer’s compliance with its
obligations under this Section 4.5.2. If Bayer fails to utilize such diligence
and if such failure constitutes a material breach of this Agreement, Micromet
may terminate the Agreement in accordance with and under the conditions
specified in Section 12.2. [***].

     

    4.6           Records;
Reports.

     

    4.6.1           Micromet
Records.  All activities performed by or on behalf of Micromet
during the Option Period and under the [***] Development Plan will be completely
and accurately recorded in written records, in sufficient detail and in good
scientific manner appropriate for patent and regulatory purposes. Such records
will be retained by Micromet for at least [***] after the termination of this
Agreement or for such longer period as may be required by any Applicable
Law.

     

    4.6.2           Bayer Records.  All
activities performed by or on behalf of Bayer in the course of the Collaboration
Program (including all Regulatory Submissions and activities and records related
to Bayer’s regulatory activities) will be completely and accurately recorded in
written records, in sufficient detail and in good scientific manner appropriate
for patent and regulatory purposes. Such records will be retained by Bayer for
at least [***] after the termination of this Agreement or for such longer period
as may be required by any Applicable Law.

     

    4.6.3           Inspection of Records. Each
Party will have the right, during normal business hours and upon reasonable
notice, to inspect and copy any such records, except that a Party may provide
copies with redactions of any information that either is not licensed to the
other Party or does not relate to the development, manufacture or
Commercialization of the Product.

     

    4.6.4           Reports on [***].  Each Party will
provide the JPT with regular oral or written reports detailing its development
activities under the [***] Development Plan and the results of such
activities.

     

    4.6.5           [***] Development Plan; Reports on
[***].  Prior to the
[***], Bayer will create and submit to Micromet a copy of the initial
[***]Development Plan for the [***], which plan may be revised by Bayer from
time- to-time. Bayer will report to Micromet on the [***] (including a [***] and
one or more representatives of [***]  The [***] will provide Micromet
in advance of [***] with a copy of the then-current [***] Development Plan.
Representatives of other relevant Bayer functions may participate in the [***]
In addition, Bayer will provide to Micromet on [***] written progress reports
with a summary of past activities in the performance of the [***] and an updated
[***] Development Plan not later than [***] following the end of the
[***].

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    4.7           Subcontracting.  Each
Party may perform any of its obligations under the Joint Development Plan
through service providers such as e.g. contract research organizations,
consultants or universities with the other Party’s prior written consent which
will not be unreasonably withheld. The Party using a service provider will
remain responsible to the other Party for the work performed by the service
provider. Each Party will ensure that such service providers are bound in
writing by obligations of confidentiality and non-use regarding Confidential
Information that are substantially the same as those undertaken by the Parties
pursuant to Section 10 hereof, that the agreement with such service providers
contains customary terms providing for the assignment to such Party (sufficient
for a Party to grant to the other Party the rights provided herein but subject
to normal and customary retained rights of university or government
collaborators) of all results developed in the course of performing the services
for such Party and that any publication of such results will be subject to the
other Party’s prior written consent.

     

    4.8           Third Party
Agreements.  The JPT will monitor and discuss during the JPT
meetings the technologies, materials, and processes used in or required for the
development or Commercialization of the Product. If either Party identifies any
such technology, material, or process that is not yet licensed by either Party,
then the Project Team Leader of such Party will bring the matter to the
attention of the JPT at the next JPT meeting, or, if the JPT does no longer
exist, of the other Party as soon as reasonably practicable. The Party who will
be responsible for payments to the Third Party in accordance with Section 8.4
will have the first right to negotiate and enter into an agreement with respect
to such technology, material or process, subject to the terms and conditions of
this Agreement (including, without limitation, the allocation of costs described
in Section 8.4). If the respective Party [***] or if it fails to [***] within
[***] following the notice described above, then the other Party will have the
right to [***] in its discretion, [***] with respect to such technology,
material or process, subject to the terms and conditions of this Agreement. In
any case, the Party negotiating such Third Party agreement will use reasonable
efforts to secure a license that is sublicensable to the other Party for the
Product on the same terms and conditions applicable to the negotiating
Party.

     

    4.9           Follow-up Program. If the
first Product candidate fails and development of such Product is discontinued
before [***], a new [***] for a replacement Product candidate (a “Replacement Product”) will be
started at Bayer’s request, which request will be made in writing within [***] after Bayer has decided to
discontinue the development of the first Product candidate, or Bayer will
terminate this Agreement  by giving [***] written notice to Micromet
within such period. Promptly following the receipt of such request, the Parties
will: (a) [***], if they have been [***] pursuant to Section [***]; (b) prepare a [***]
Development Plan; and (c) conduct the development and Commercialization of the
Replacement Product in accordance with the provisions of this
Agreement.

     

    
      	
              5.

            	
              Product
      Manufacture and Commercialization

            

    

     

    5.1           Commercial
Manufacturing.  Except as expressly otherwise provided in the
[***] Development Plan, Bayer will be responsible for all commercial
manufacturing activities related to the Product, including without limitation,
process development and scale-up, further process optimization and the
manufacturing, fill & finish of Product for GLP toxicology testing, clinical
trials and commercial sale.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    5.2           Commercialization.  Subject
to Section 5.5, Bayer will be solely responsible for the Commercialization of
the Product in the Territory during the Term.

     

    5.3           Diligence in
Commercialization.  Bayer’s diligence obligation during
Commercialization will be [***] to [***] in the Major Markets after having
received Marketing Approval for such countries; provided, however, where
Bayer is marketing the Product through a Third Party or sublicensee, such Third
Party or sublicensee will be obliged to [***] to Commercialize the Product in
the Major Markets. If Bayer fails to comply with its obligation under this
Section 5.3 and if such failure constitutes a material breach of this Agreement,
Micromet may terminate the Agreement in accordance with and under the conditions
specified in Section 12.2. [***]

     

    5.4           Branding, Trademarks, Trade Dress,
and Logos.  Bayer will solely own, and will be solely
responsible for selecting, the trademark used to identify any Product that will
be Commercialized in the Territory pursuant to this Agreement.  Bayer
will oversee the filing, prosecution and maintenance of all trademark
registrations for the Product in the Territory, and Bayer will be responsible
for the payment of any and all costs relating to such filing, prosecution, and
maintenance.  Bayer will have sole responsibility for, and will be
sole owner of, all trade dress, logos, slogans, and designs used on and in
connection with any Product that will be Commercialized in the Territory
pursuant to this Agreement.

     

    5.5           Right of First Negotiation for
[***].  If [***] desires
to [***] a Product through one or more Third Parties in any country, it will
notify [***] and will offer to [***] a right to [***] in such
country.  If [***] does not notify [***] of its interest in [***]
within [***] from receipt of [***] notice or if the Parties have not [***], or
such longer period as the Parties may agree, [***] will be free to
[***].

     

    
      	
              6.

            	
              Regulatory
      Matters

            

    

     

    6.1           Regulatory Submissions;
Inspections.  Bayer will be responsible for the preparation,
filing, prosecution and maintenance of any Regulatory Submissions for the
Product.  Bayer will promptly notify Micromet in writing and, to the
extent reasonably possible, in advance of any meeting with or inspection by any
Regulatory Authority relating to the Product.  Micromet will assist
Bayer, as may be reasonably necessary, in the preparation of Regulatory
Submissions and inspections by Regulatory Authorities, including providing
necessary documents or other materials required by Applicable Law, and will, if
requested by a Regulatory Authority, grant access to its personnel and
facilities to representatives of Bayer and the Regulatory Authority, all at
Bayer’s expense. With [***], Micromet may [***] with and [***] by [***] as
[***].

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    6.2           INDs; Regulatory Approvals; Adverse
Drug Experiences.  [***] will be responsible for obtaining and
maintaining any [***] and [***] and other [***] for the Commercialization of the
Product in the Territory, including communicating and preparing and filing all
reports (including adverse drug experience reports) with the applicable
regulatory authorities, provided that [***] will provide [***] with a reasonable
opportunity to provide comments to such portions of filings where data generated
by [***] are presented to the Regulatory Authorities. To the extent either Party
receives any information regarding relevant safety information related to the
use of the Product, such Party will promptly provide the other Party with such
information as is required under Applicable Laws.  Prior to the
enrolment of the first patient in a study related to a Product, the Parties will
agree on a standard operating procedures implementing the requirements under
Applicable Law for safety information exchange, which procedures, as may be
amended from time to time upon mutual agreement of the Parties, will be
incorporated in this Agreement by reference.

     

    6.3           Communications with Regulatory
Authorities.  [***] will be solely responsible
for any communications with the regulatory authorities occurring or required in
connection with obtaining or maintaining any [***] and [***] for the Product. [***] will provide [***] with
[***]  relating to the Product, [***].

     

    
      	
              7.

            	
              Intellectual
      Property

            

    

     

    7.1           License
and Sublicense Grants by Micromet.

     

    7.1.1             Micromet Technology and
[***].  Subject to the terms and conditions set forth in this
Agreement, Micromet grants to Bayer an exclusive,  royalty-bearing
license, under the Micromet Technology (except for any Sublicensed Technology),
the [***] and Micromet’s interest in the [***], to perform any activities
assigned to Bayer in the [***] Development Plan and to develop, have developed,
make, have made, use, have used, offer for sale, have offered for sale, sell,
have sold, import and have imported Product in the Field in the
Territory.

     

    7.1.2             Sublicensed
Technology.  Subject to the terms and conditions set forth in
this Agreement, Micromet grants to Bayer an exclusive, royalty-bearing
sublicense, under the Sublicensed Technology, to perform any activities assigned
to Bayer in the [***] Development Plan and to develop, have developed, make,
have made, use, have used, offer for sale, have offered for sale, sell, have
sold, import and have imported Product in the Field in the Territory. Bayer
acknowledges and agrees that the rights, licenses and sublicenses granted by
Micromet to Bayer in this Agreement are subject to this Agreement and [***] Bayer covenants not to take
or fail to take any action that violates [***].

     

    7.2           License
Grants by Bayer.

     

    7.2.1             Bayer
Technology.  Subject to the terms and conditions set forth in
this Agreement, Bayer grants to Micromet a non-exclusive, royalty-free license,
under any applicable Patents or Know-How Controlled by Bayer during the [***] of
the [***] (including the [***] and Bayer’s interest in the [***]), for the sole purpose of
conducting those development responsibilities assigned to Micromet under the
[***] Development Plan.  Such license will be sublicensable solely to
subcontractors approved by Bayer, such approval not be unreasonably
withheld.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    7.2.2             [***]
Technology.  Subject to the terms and conditions set forth in
this Agreement, Bayer grants to Micromet a worldwide, sole (i.e. exclusive
except as to Bayer and its Affiliates) royalty-free license under the [***]
Technology to develop, have developed, make, have made, use, have used, offer
for sale, have offered for sale, sell, have sold, import and have imported
Micromet Products in the Field.  Sections [***], [***] and [***] will
apply to the license to Micromet mutatis
mutandis.

     

    7.2.3             [***].  Subject to the
terms and conditions set forth in this Agreement, Bayer grants to Micromet an
exclusive, worldwide, royalty-free license under [***] in the [***] to develop,
have developed, make, have made, use, have used, offer for sale, have offered
for sale, sell, have sold, import and have imported Micromet Products in the
Field. Sections [***], [***] and [***] will apply to the license to Micromet
mutatis
mutandis.

     

    7.2.4             [***].  Micromet will
have the right to [***], under the license granted under Section 7.2.2 and
Section 7.2.3 only to [***] and only to those [***] that [***] the [***] of
[***] to [***] pursuant to this Agreement.

     

    7.3           [***].

     

    7.3.1             Ownership. Micromet will own
all right, title and interest in and to any [***] Technology. Bayer will own all
right, title and interest in and to any [***] generated solely by Bayer’s or
Bayer’s Affiliates’ employees or by a Third Party on Bayer’s behalf (the
[***]”). Any [***] generated [***] by employees of [***] or their respective
Affiliates will be [***] by the Parties [***]”).

     

    7.3.2             Disclosure of [***].  Each Party will
disclose to the other Party the development, making, conception or reduction to
practice of any [***] within [***], and will ensure that such [***] is disclosed
to it by its Affiliates and contractors as necessary for such Party to comply
with its own obligations under this Section 7.3.2. The Parties will make such
disclosure to the [***] or the [***] in the course of the performance of the
[***]. If such [***] within [***] Technology or [***] Technology, the owner
thereof pursuant to Section 7.3.1 above may withhold the disclosure to the other
Party until after the filing of a patent application claiming such
invention.

     

    7.4           [***]

     

    7.4.1             Bayer
will have the right to request from time to time the disclosure of [***], any
[***] and any [***]. Upon receipt of such request, Micromet undertakes to use
reasonable efforts to provide Bayer a summary of such [***], [***], and [***] in
such detail as is reasonably required for Bayer to determine its interest in
[***] a [***] thereunder pursuant to this Section 7.4.  If Bayer
desires to use or apply any [***] or [***] within the [***], [***], or [***] in
the development or Commercialization of a Product, Bayer will notify Micromet
thereof in writing, and the Parties will meet to discuss the extent to which
such [***], [***], or [***] would be necessary for the development or
Commercialization of the Product.  If Bayer determines that such
[***], [***] or [***] would be necessary for the development or
Commercialization of the Product and [***], then Bayer will provide Micromet
with written notice of such determination, and the Parties will [***] the [***]
for [***] such [***], [***] or [***] in the licenses granted to [***] under this
Agreement (it being understood that Bayer will be responsible for [***] on
account of any [***] or [***] to the extent arising from Bayer’s practice of
[***] to such [***] except as provided in Section 7.12.2 or Section 8.4.2). If
the Parties fail to [***], the procedure described in Section [***] will
apply.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        19

        
          

        

      

      
         

      

    

     

    7.4.2             Upon
execution of a [***] identifying the [***], [***], or [***] and reflecting the
[***] by the [***] or established pursuant to Section 17.4.3(a), such [***]
[***] and [***] will be deemed [***] and [***] under this Agreement; provided, however, that [***]
or [***] to Third Parties, if such Third Parties are [***] that do not [***] of
[***] to Micromet pursuant to this Agreement; and provided further, that
[***] under this Agreement to [***] and [***] will be subject to any terms and
conditions of [***] under which Micromet receives [***] to such [***] and
[***].

     

    7.5           [***];
[***].  Micromet will have the right to request from time to time the
disclosure of [***] and [***].  Upon receipt of such request, Bayer
undertakes to use reasonable efforts to provide Micromet a summary of such [***]
and [***] in such detail as is reasonably required for Micromet to determine its
interest in [***] pursuant to this Section 7.5. If Micromet desires to use or
apply any [***] or [***] within the [***] or [***] in the development or
Commercialization of a Micromet Product, Micromet will notify Bayer thereof in
writing, and the Parties will meet to discuss the extent to which such [***] or
[***] would be necessary for the development or Commercialization of a Micromet
Product.  If Micromet determines that such [***] or [***] would be
necessary for the development or Commercialization of a Micromet Product and
[***], then Micromet will provide Bayer with written notice of such
determination, and the Parties will [***] for the development and
Commercialization of [***] (it being understood that Micromet will be
responsible for all payments due to a Third Party on account of any [***] to any
[***] to the extent arising from Micromet’s practice of [***]; provided, however, that such
[***] will only be [***] by [***] to [***] and only to those [***] that [***] of
[***] to [***] pursuant to this Agreement; provided further, that the
license granted under this Agreement to [***] will be subject to any terms and
conditions of the [***] under [***]; and provided further that
Sections [***] and [***] of this Agreement shall apply [***] mutatis mutandis. If the
Parties fail to [***] of Micromet’s notice, the procedure described in Section
[***] will apply.

     

    7.6           [***] by
Bayer.  Subject to the terms and conditions of this Agreement,
[***], Bayer will have the right [***] to a Third Party the [***] through [***];
provided, however, that
(a) Bayer may not [***],  on a country-by-country basis in all or a
portion of Europe or the United States other than for purposes of [***] after
[***], (b) Bayer will [***] for the performance of Bayer’s obligations under
this Agreement (either directly by Bayer or by [***]), and (c) Bayer provides to
Micromet a [***] of such [***] that the [***], and [***] of this Agreement. For
clarity, the Parties agree and acknowledge that [***] will be deemed to be the
[***] for purposes of this Agreement if such Third Party has [***] and that
Section 7.6 (a) shall not [***]

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
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    7.7           Reservation of Rights. Bayer hereby covenants
and agrees not to use or practice any Licensed Technology, nor cause or
authorize any Affiliate or Third Party to use or practice any Licensed
Technology, other than as expressly permitted in this
Agreement.  Except for the rights specifically granted in this
Agreement, Micromet reserves all rights to the Licensed Technology and reserves
the right to utilize or allow Third Parties to utilize the Licensed Technology
consistent with the terms of this Agreement.  In addition, Micromet
reserves all rights in the Licensed Technology to the extent necessary for it to
conduct those development responsibilities assigned to it under the [***]
Development Plan.  No implied licenses are granted under this
Agreement.

     

    7.8           Filing,
Prosecution and Maintenance of Patents.

     

    7.8.1        [***]. Micromet will have the
first right to file, prosecute, defend and maintain at its costs and in its name
any Patents claiming inventions or discoveries that are [***].  Bayer will
have the first right to file, prosecute, defend and maintain at its costs and in
its name any Patents claiming inventions or discoveries that are [***] Technology.  With regard to
inventions or discoveries within the [***], the Parties will discuss on
a case-to-case basis who will file, prosecute, defend and maintain Patents
claiming such inventions or discoveries, based on the Parties’ understanding
that Micromet will bear such responsibility with respect to Patents within [***] more [***] to the [***] and that Bayer will bear
such responsibility with respect to Patents within [***] more [***] to the [***].  Any such
filing, prosecution and maintenance will be made [***], but at the [***] costs.  The
filing Party will reasonably inform the other Party and consult with the other
Party and, to the extent possible, will undertake the filing, prosecution and
defense of any Patents within [***] in a way that will not
be detrimental to the prosecution, issuance and validity of Patents that are
part of [***], or the
development or Commercialization of the Product.  If the filing Party
does not want to continue the prosecution of a patent application in the [***], it will inform the
other Party thereof in writing with sufficient advance notice to reasonably
enable the other Party to assume the filing or prosecution of such Patent at its
cost. If the other Party decides to assume the filing or prosecution of such
Patent, the filing Party will assign such Patent to the other
Party.

     

    7.8.2        [***]
Patent.  Micromet will have the right to file, prosecute,
defend and maintain at its costs the [***]
Patents.  Micromet will reasonably inform Bayer and consult with Bayer
and will undertake the filing, prosecution and defense of such Patents in a way
that will not be detrimental to the prosecution, issuance and validity of
Patents that are part of [***]
or the [***] or
[***].  If
Micromet does not want to continue the prosecution of any such Patent, it will
inform Bayer thereof in writing with sufficient advance notice to reasonably
enable Bayer to assume the filing or prosecution of such Patent at its cost. If
Bayer decides to assume the filing or prosecution of such Patent, Micromet will
assign such Patent to Bayer.  Notwithstanding the generality of the
foregoing, Micromet will provide to Bayer [***]of the [***] Patent by providing to
Bayer all draft filings in advance of submission to the relevant patent
authorities so that Bayer can comment, provide input and demand changes to such
documents.  Micromet will implement such proposed changes, unless
those changes would, in Micromet’s reasonable belief, [***] or [***].  In any
event, Micromet will not abandon any claims or will not limit any claims
specific to the [***]
without Bayer’s prior written consent.  Micromet will file and
maintain such Patents at its costs in the countries specified in Exhibit H and advance notice
regarding the timing of filings in such countries.  If Bayer wishes
any such Patents to be filed and maintained in additional countries, it will
notify Micromet accordingly and Micromet will file such Patents in such
countries at Bayer’s cost.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    7.8.3        Micromet Licensed
Patents.  Except as provided in Section 7.8.2, Micromet will
file, prosecute, defend and maintain at its costs and in its name any Patents
within the Micromet Technology.  Micromet will provide Bayer with an
annual oral report summarizing the status of patent applications, office actions
(including restriction requirements) and substantive correspondence with the
applicable patent office for such Patents and made during such annual
year.

     

    7.8.4        Cooperation. Each Party will
keep the other Party reasonably informed of progress with regard to its filing,
prosecution and maintenance of the Patents pursuant to this Section 7.8, and
will consider in good faith the requests and suggestions of the other Party with
respect to the foregoing.  Each Party will provide the other Party
with quarterly reports summarizing (or providing copies as reasonably requested)
of patent applications, office actions (including restriction requirements) and
substantive correspondence with the applicable patent office for such Patents
and made during such preceding calendar quarter.   Further, each
Party will cooperate with the other Party, execute all lawful papers and
instruments and make all rightful oaths and declarations as may be necessary in
the preparation, prosecution and maintenance of all patents and other filings
referred to in this Section 7.8.

     

    7.9           Enforcement of
Patents.

     

    7.9.1        Notice.  If either
Party learns that a Third Party is infringing or allegedly infringing any Patent
within the Licensed Technology or the [***] to the extent related to a Product,
it will promptly notify the other Party thereof including available evidence of
infringement.  The Parties will cooperate and use reasonable efforts
to stop such alleged infringement without litigation.

     

    7.9.2        Enforcement
Actions.

     

    (a)           The
Party owning a Patent within the Licensed Technology or the [***] will have the
first right (but not the obligation) to take the appropriate steps to remove the
infringement or alleged infringement thereof by a Third Party, including, by
initiation, prosecution and control at its own expense of any suit, proceeding
or other legal action by counsel of its own choice.

     

    (b)           The
Party that is not the plaintiff in an action brought by the other Party pursuant
to this Section 7.9.2 will have the right, at its own expense, to be represented
in any such action by counsel of its own choice. In addition, such Party agrees
to be joined as party plaintiff if necessary to prosecute the action or
proceeding and to give the other Party reasonable assistance and authority to
file and prosecute the suit; provided, however, that neither Party
will be required to transfer any right, title or interest in or to any property
to the other Party or any other party to confer standing on a Party
hereunder.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (c)           If
the alleged infringement of a Patent is based on the fact that a Third Party is
selling a product that is competing with a Product, and if a Party fails to
bring an action or proceeding to remove the infringement pursuant to subsection
(a) above within [***]of
a written request for such action by the other Party, then such other Party will
have the right (but not the obligation) to bring any such action or proceeding
by counsel of its own choice; provided, however, that the
Party owning such Patent will have the right to assume control of the litigation
if the alleged infringer claims invalidity or non-enforceability of any such
Patent as a defense.

    (d)           If
the alleged infringement of a Patent within the Licensed Technology or the [***]
is based on the fact that a Third Party is selling a product that is competing
with a Product, any settlements, damages or other monetary awards (the “Recovery”) recovered by a
Party in an action pursuant to this Section 7.9.2 will be allocated first to the
costs and expenses of the Party bringing suit, and second to the costs and
expenses (if any) of the other Party, with any remaining amounts (if any) to be
allocated as follows:

     

    (i)           If
Bayer pursued such action, the Recovery will be deemed to be Net Sales and Bayer
will pay a royalty to Micromet as provided in Section 8.3.

     

    (ii)           If
Micromet pursued such action, the Recovery will be retained by Micromet to the
extent that the Recovery is based on the damages incurred by Micromet, and
deemed Net Sales to the extent based on the damages (i.e. lost sales) incurred
by Bayer, and Micromet will pay the portion of such Recovery based on the
damages incurred by Bayer to Bayer after deducting the royalty due to Micromet
thereon pursuant to Section 8.3.

     

    7.10           Consequences of Patent Challenge by
Bayer.

     

    7.10.1        Micromet
will have the right to terminate this Agreement by written notice effective upon
receipt if Bayer or any of its Affiliates directly, or indirectly through
assistance granted to a Third Party, commence any interference or opposition
proceeding, challenge the validity or enforceability of, or oppose any extension
of or the grant of a supplementary protection certificate with respect to, any
Patent within the Licensed Technology (each such action a “Patent
Challenge”).

     

    7.10.2        Bayer
will include provisions in all agreements granting sublicenses of Bayer’s rights
hereunder providing that, if the sublicensee or any of its affiliates undertake
a Patent Challenge with respect to any Patent within the Licensed Technology
under which the sublicensee is sublicensed, Bayer will be permitted to terminate
such sublicense agreement.  If a sublicensee of Bayer (or an affiliate
of such sublicensee) undertakes a Patent Challenge of any such Patent under
which such sublicensee is sublicensed, then Bayer, upon receipt of notice from
Micromet of such Patent Challenge, will terminate the applicable sublicense
agreement.  If Bayer fails to so terminate such sublicense agreement,
Micromet may terminate this Agreement.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
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    7.11           Consequences of Patent Challenge by
Micromet.

     

    7.11.1        Bayer
will have the right to terminate the licenses granted to Micromet in Sections
7.2.2, 7.2.3 or 7.5 by written notice effective upon receipt if Micromet or any
of its Affiliates directly, or indirectly through assistance granted to a Third
Party, commence any interference or opposition proceeding, challenge the
validity or enforceability of, or oppose any extension of or the grant of a
supplementary protection certificate with respect to, any Patent licensed to it
hereunder (each such action a “Patent
Challenge”).

     

    7.11.2        Micromet
will include provisions in all agreements granting sublicenses
of  rights licensed from Bayer hereunder providing that if the
sublicensee or any of its affiliates undertake a Patent Challenge with respect
to any Patent licensed hereunder under which the sublicensee is sublicensed,
Micromet will be permitted to terminate such sublicense agreement.  If
a sublicensee of Micromet (or an affiliate of such sublicensee) undertakes a
Patent Challenge of any such Patent under which such sublicensee is sublicensed,
then Micromet, upon receipt of notice from Bayer of such Patent Challenge, will
terminate the applicable sublicense agreement.  If Micromet fails to
so terminate such sublicense agreement, then Bayer may terminate the licenses
granted to Micromet hereunder.

     

    7.12           [***].

     

    7.12.1        If
Micromet [***] that [***] of an invention claimed in a Patent [***], such [***] will
[***].

     

    7.12.2        If
Micromet Controls (or has the legally binding right to obtain Control) any [***]
or [***] that [***] of an invention claimed in a Patent [***], then such [***]
will, at [***] and [***], provided that any [***] made by [***] on account of
[***] will be subject to the terms of Section [***].

     

    7.12.3        If
Bayer files any [***], it will grant to
Micromet a [***] under such Patent with a scope identical to [the license]
granted under Section [***].

     

    7.13           Change in
Control.  In the event of any Change of Control of Micromet (or
any applicable controlling Affiliate), then (i) [***], [***], and [***] will not
include intellectual property rights owned or controlled by a Third Party
acquiror as of the closing of such Change of Control; and (ii) [***] will not
include intellectual property rights generated by or on behalf of a Third Party
acquiror or its Affiliates after the closing of such Change of Control; provided, however, that if
the Change in Control [***], then [***] will include Patents and Know-How that
(i) without the Change of Control would be [***] and (ii) that arise during the
period of the [***] and are generated by or on behalf of the entity following
such transaction that is conducting all or substantially all of the activities
relating to the development of [***].

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
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              8.

            	
              Fees
      and Payments

            

    

     

    8.1           Development
Expenses.  Bayer will pay to Micromet on or before the first
day of each calendar quarter the amount of Development Expenses budgeted to be
incurred by Micromet in such calendar quarter as set forth in the applicable
Development Plans following submission of an invoice by Micromet for such
amounts in accordance with Section 9.1.2.  Within [***] of the end of
the calendar quarter, Micromet will provide Bayer with quarterly reports
containing a detailed account of activities performed and Micromet’s Development
Expenses incurred during the preceding calendar quarter. The Parties will work
together to reconcile, in a timely fashion, the Development Expenses set forth
in the reports presented by Micromet with Bayer’s payments for such
quarter.  If the parties determine that such payments exceed
Micromet’s reported Development Expenses, then the amount of such excess will be
credited against the next payment of Development Expenses by Bayer hereunder
(or, if no such payment is anticipated, refunded by Micromet to Bayer within
[***] of such
determination). If the parties determine that Micromet’s reported Development
Expenses exceed the amount paid by Bayer, then Bayer will pay the excess amount
to Micromet within [***] of such determination but no later than the next
quarterly advance payment made by Bayer under this Section 8.1.

     

    8.2           Development
Milestones.  Bayer will inform Micromet within [***] of the occurrence of
any milestone event specified in Exhibit E attached
hereto and will pay Micromet each of the non-refundable, non-creditable payments
in the amounts set forth on Exhibit E within
[***] after the later of
the first occurrence of the corresponding event described on such exhibit with
respect to each Product and receipt of a corresponding invoice from
Micromet.

     

    8.3           Royalties.

     

    8.3.1        Royalty
Rates.  Bayer will pay to Micromet a royalty equal
to:

     

    (a)           [***]%
of worldwide Net Sales of the Product for that portion of the total amount of
aggregate worldwide Net Sales of the Product in any calendar year that is less
than or equal to €[***];

     

    (b)           [***]%
of worldwide Net Sales of the Product for that portion of the total amount of
aggregate worldwide Net Sales of the Product in any calendar year that is
greater than €[***] but less than or equal to €[***];

     

    (c)           [***]%
of worldwide Net Sales of the Product for that portion of the total amount of
aggregate worldwide Net Sales of the Product in any calendar year that is
greater than €[***] but less than or equal to €[***]; and

     

    (d)           [***]%
of worldwide Net Sales of the Product for that portion of the total amount of
aggregate worldwide Net Sales of the Product in any calendar year that is
greater than €[***].

     

    8.3.2        Aggregation of Net Sales; Royalty
Term.

     

    (a)           The
determination of aggregate worldwide Net Sales for the tiers described in
Section 8.3.1 will be based upon the Net Sales of the Product then accrued
during each applicable calendar year (or portion thereof) and the determination
of a particular royalty rate then-applicable to a particular sale of Product
will be made as of the date such sale was invoiced.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
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    (b)           Royalties
due under the preceding Section 8.3.1 will commence upon First Commercial Sale
of a Product in a particular country in the Territory and will expire on a
country-by-country and Product-by-Product basis upon the later of: (i) the
expiration of the last-to-expire Patent within the Licensed Technology
containing a Valid Claim claiming or covering the use or sale of such Product in
such country, or (ii) [***] years from the First Commercial Sale of such Product
in such country.

     

    8.4           Payments under Third Party
Agreements.

     

    8.4.1        Bayer
Obligations.  In addition to the payments under Section 8.2 to
8.3, Bayer will make to Micromet the payments described on Exhibit D-1 in
consideration of Micromet’s obligations under the license agreements listed in
Exhibit D-1. In
addition, Bayer will be responsible for the payments that become due under any
future agreement Bayer enters into with a Third Party with regard to the
Product, except as set forth in Section 8.4.2.

    8.4.2        Micromet
Obligations.  Micromet will be responsible for the payments
made prior to the Effective Date or that become due after the Effective Date to
the licensor or assignors under the agreements listed in Exhibit D-2. In addition, Micromet
will be responsible for the payments that
become due under any license to or
acquisition of Patents (whether entered into by Bayer or Micromet) from a Third
Party (including a [***]) to the extent payments are payable for a license to or
acquisition of Patents owned by a Third Party that would [***] by [***], except excluding
any such invention relating to the [***] Notwithstanding the foregoing, in no
event will payments applicable under this Section 8.4.2, considered in the
aggregate, reduce the effective royalty rate retained by Micromet hereunder on
Net Sales of the Product to less than [***]% on a country-by-country basis
during any calendar quarter. Bayer will be responsible for any payments due to
Third Parties by virtue of Bayer’s development or Commercialization of the
Product under this Agreement that would reduce Micromet’s effective royalty rate
in any calendar quarter below [***]%.

     

    For
example and without limitation, the Parties agree that (i) Micromet will be
responsible (subject to the limitations described in Section 8.4.2) for any
Patents covering or claiming the [***], the [***], the [***], and the [***], and (ii) Bayer will be
responsible (subject to the limitations in Section 8.4.1) for any Patents
covering or claiming [***] or [***] elements, including
[***], [***], and [***].

     

    8.4.3        In
the event either Party (“Contracting Party”) is bound
to a Third Party for payments described in this Section 8.4 for which the other
Party (“Paying Party”)
is responsible, then the Paying Party will make such payments directly to the
Contracting Party and the Contracting Party will be obligated to make such
payment directly to the Third Party in accordance with the terms of such Third
Party agreement. Promptly following the Effective Date, the Parties will
establish a mutually acceptable process to facilitate the timely and accurate
payment from the Paying Party with sufficient time for the Contracting Party to
make the corresponding payment to the Third Party in a timely
fashion.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    8.4.4        If
Micromet enters into any Third Party agreement for which Bayer would be entirely
or in part financially responsible in accordance with the cost allocation
described in this Section 8.4, Bayer will only be obliged to make respective
payments to Micromet under Section 8.4.3, if Bayer has given its consent to the
terms of the agreement. If Bayer enters into an agreement for which Micromet is
financially responsible without Micromet’s consent, Micromet will not be obliged
to make any payments for amounts payable to the Third Party until [***] in which
case Bayer can [***] to the Third Party under such agreements [***] from [***]
due to Micromet; provided,
however, that in no case the effective royalty rate paid to Micromet in
any calendar quarter will be below [***]%.

     

    By way of
example, if Bayer has paid to a Third Party [***] Euros in [***] and has Net
Sales of [***] Euros in each of the first and second quarter of a year (and
consequently would have to pay to Micromet [***]%, i.e. [***] Euros in royalties
for each of the respective quarters), Bayer could in the first quarter deduct
[***] Euros (i.e. bring the net royalty to [***]%) and in the following quarter
the remaining [***] Euros.

     

    8.5           Payments for Follow-Up
Program.  If the Parties are developing a Replacement Product
in accordance with Section 4.9, Bayer will not be required to pay an additional
Option Fee. Milestone payments pursuant to Section 8.2 for such Replacement
Product will only be due for milestone payments that have not yet been made for
the Product, which development has been discontinued in accordance with Section
4.9.

     

    8.6           Taxes.  All
remunerations mentioned in this agreement are net values. Value added tax, sales
tax or similar taxes will be charged and invoiced additionally with the
appropriate rate if legally required.

     

    
      	
              9.

            	
              Payment
      Terms

            

    

     

    9.1           Payment Method;
Interest. 

     

    9.1.1        All
amounts due hereunder will be paid in Euros by wire transfer in immediately
available funds to an account designated by the other Party in writing, in case
of payments to Micromet to the following account:

     

    
      
        	
                Account
      Name:

              	
                Micromet
      AG

              
	
                Banking
      Institution:

              	
                [***]

              
	
                Account
      Number:

              	
                [***]

              
	
                Bank
      Code:

              	
                [***]

              
	
                BIC:

              	
                [***]

              
	
                IBAN:

              	
                [***]

              

      

    

    
       

      9.1.2        Payments
will only be made after receipt of an invoice and, unless otherwise specified
herein, will be payable within [***] from receipt of such invoice. Invoices to
Bayer will include in the reference line the cost center and such other
information as may be provided by Bayer to Micromet from time to time and will
be sent to the address below (or such other address as may be provided to
Micromet in writing from time to time):

       

      Bayer
Schering Pharma AG,

      Müllerstrasse
178, 13353 Berlin

      c/o
EuroServices Bayer GmbH

      51368
Leverkusen

       

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
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    9.1.3        Any
payments due under this Agreement will be due on such date as specified in the
Agreement and, in the event that such date is not a Business Day, then the next
succeeding Business Day.  Any failure by a Party to make a payment
within [***] after the
date when due will obligate such Party to pay computed interest, the interest
period commencing on the due date and ending on the payment day, to the
receiving Party at a rate per annum equal to the one month EURIBOR as quoted on
REUTERS screen <EURIBOR01> plus a premium of [***]%, or the highest rate
allowed by law, whichever is lower. The interest calculation will be based on
the act / 360 computation method, which means that the numerator is calculated
based on the actual days elapsed while the denominator remains 360
(flat).  The interest rate will be fixed on the due date and adjusted
for any subsequent thirty (30) day period to the rate then in effect on the
first Business Day of such period. Interest will be compounded monthly in
arrears.  Such interest will be due and payable on the tender of the
underlying principal payment.

    9.2           Reports.  Bayer will
provide Micromet a non-binding, good faith estimate of aggregate Net Sales of
Product in the Territory for an applicable calendar quarter within [***] following the end
of  such calendar quarter.  Bayer will provide Micromet with
a report containing a detailed and itemized calculation of Net Sales of the
Product in the Territory during the preceding calendar quarter within [***] following the calendar
quarter for which royalties are due.

     

    9.3           Currency
Conversion.  All payments made under this Agreement will be
payable in Euros regardless of the countries in which sales are made. Net Sales
made in currencies other than Euros will be converted into Euros using the
Exchange Reference Rates published by the European Central Bank Frankfurt /
Main, Germany, on the last business day of the applicable calendar quarter.
These Euro Foreign Exchange Rates are, as of the Effective Date, published on
Reuters screen <ECB37>. Bayer will notify Micromet if this method is
revised, provided that any such revised conversion method will consistent with
Bayer’s current practice consistently applied. If no Euro Foreign Exchange
References Rate is determined for the relevant currency, Bayer will use the same
exchange rate as for its internal accounting process consistently
applied.

     

    9.4           Records
Retention; Audit.

     

    9.4.1        Record
Retention.  Each Party will maintain complete and accurate
books, records and accounts used for the determination of (a) any Development
Expenses that the other Party is required to reimburse under this Agreement and
(b) Net Sales, in sufficient detail to confirm the accuracy of any payments
required under this Agreement, which books, records and accounts will be
retained by such Party until [***] after the end of the period to which such
books, records and accounts pertain.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    9.4.2        Audit.  Each Party
will have the right to have an independent certified public accounting firm of
internationally recognized standing, reasonably acceptable to the other Party,
have access during normal business hours, and upon reasonable prior written
notice, to such of the records of the other Party as may be reasonably necessary
to verify the accuracy of Development Expenses or Net Sales for any calendar
quarter ending not more than [***] prior to the date of such request; provided, however, that no Party will
have the right to conduct more than [***] in any [***].  The
accounting firm will disclose to the Parties only whether the Development
Expenses or Net Sales reported by the audited Party are correct or incorrect and
the specific details concerning any discrepancies.  The auditing Party
will bear all costs of such audit, unless the audit reveals a discrepancy in the
audited Party’s favor of more than [***] ([***]%), in which case the audited
Party will bear the cost of the audit.

     

    9.4.3        Audit
Disagreement.  If there is a dispute between the Parties
following any audit pursuant to Section 9.4.2 above, either Party may refer the
issue (an “Audit Disagreement”) to an independent certified public accountant
for resolution. In the event an Audit Disagreement is submitted for resolution
by either Party, the Parties will comply with the following
procedures:

     

    (a)           The
Party submitting the Audit Disagreement for resolution will provide written
notice to the other that it is invoking the procedures of this Section
9.4.3.

     

    (b)           Within
[***] of the giving of such notice, the Parties will jointly select a recognized
international accounting firm to act as an independent expert to resolve such
Audit Disagreement.

     

    (c)           Each
Party will provide the independent expert with a description of the nature and
circumstances of any Audit Disagreement, which description may be in written or
oral form, within ten (10) days of the selection of such independent
expert.

     

    (d)           The
independent expert will render a decision on the matter as soon as possible, but
in no event later than [***] from submission to the independent
expert.

     

    (e)           The
decision of the independent expert will be final and binding unless such Audit
Disagreement involves alleged fraud, breach of this Agreement or construction or
interpretation of any of the terms and conditions hereof.

     

    (f)           All
fees and expenses of the independent expert, including any Third Party support
staff, or other costs incurred with respect to carrying out the procedures
specified at the direction of the independent expert in connection with such
Audit Disagreement, will be borne by each party in [***] to the [***] awarded to
the Party by the independent expert through such decision. For example, Party A
disputes € [***], the independent expert awards Party A € [***]: Party A must
pay [***] percent and Party B [***] percent of the independent expert’s fees and
expenses.

     

    9.4.4        Payment of Additional
Amounts.  If, based on the results of any audit, additional
payments are owed Micromet under this Agreement, then Bayer 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, any payments
made by Bayer to Micromet exceeded the amounts due and payable under this
Agreement, such excess will be credited against future amounts owed by Bayer
under this Agreement.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    9.4.5        Confidentiality.  Each
party will treat all information subject to review under this Section 9.4 and
the results of any audit in accordance with the provisions of Section 10 and
will cause its accounting firm to enter into a reasonably acceptable
confidentiality agreement with the audited Party obligating such firm to
maintain all such financial information in confidence pursuant to such
confidentiality agreement.

     

    9.4.6        Auditing of
Sublicensees.  Bayer will include in any sublicense agreements
with sublicensees that are granted the right to Commercialize the Product a
clause with provisions regarding record retention of the sublicensee and audit
rights of Bayer that are comparable to or less favorable to the sublicensee than
the provisions in this Section 9.4. If the sublicense agreements do not contain
a right for Micromet to directly audit Net Sales of the sublicensee in
accordance with the provisions in Section 9.4, Bayer will, upon request of
Micromet, exercise its audit right with respect to the determination of Net
Sales, provided that Micromet will bear all costs of such audit, unless the
audit reveals a discrepancy in Micromet’s favor of more than [***] ([***]%), in
which case Bayer will bear the cost of the audit.

     

    9.5        Withholding Tax.

     

    9.5.1        Any
Party required to make a payment under this Agreement will be entitled to deduct
and withhold from the amount payable the tax which the paying Party is liable
under any provisions of tax law.

     

    9.5.2        If
the withholding tax rate is reduced according to the regulations in an
applicable double tax treaty, no deduction will be made or a reduced amount will
be deducted only if the paying Party is timely furnished with necessary
documents (Freistellungsbescheid) by the payee issued from the German Tax
Authority (Bundeszentralamt für Steuern), certifying that the payment is exempt
from tax or subject to a reduced tax rate.

     

    9.5.3        Any
withheld tax will be treated as having been paid by the paying Party to the
payee for all purposes of this Agreement.

     

    9.5.4        The
paying Party will timely forward the tax receipts certifying the payments of
withholding tax on behalf of the payee.

     

    9.5.5        In
case the paying Party cannot deduct the withholding tax due as a result of
fulfilling a payment obligation by settlement or set-off, the payee will pay the
withholding tax to the paying Party separately.

     

    9.5.6        If
the paying Party failed to deduct withholding tax but is still required by tax
law to pay withholding tax on account of the payee to the tax authorities, the
payee will assist the paying Party with regard to all procedures required in
order to obtain reimbursement by tax authorities or, in case the tax authorities
do not reimburse withholding tax to the paying Party, the payee will immediately
refund the tax amount.

     

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
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    9.5.7             Notwithstanding anything in this Section
9.5, if a Party changes its domicile after the Effective Date such that
withholding taxes become due on payments due to the other Party, the Party that
changed its domicile will bear any withholding taxes that the other Party is
unable to recover under applicable double tax treaties.

     

    
      	
              10.

            	
              Confidentiality

            

    

     

    10.1       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”) information
in connection with this Agreement or the performance of its obligations under
this Agreement, including, without limitation, any information in reports
provided pursuant to this Agreement, 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”).  The Parties agree that the terms of this
Agreement, the identity of the Collaboration Target, and the [***] are deemed
Confidential Information of both Parties, that such Confidential Information (a)
will be treated as if first disclosed by one Party to the other Party, and (b)
will be subject to the restrictions on use and disclosure set forth
herein.  Confidential Information also includes any information
disclosed prior to the Effective Date pursuant to that certain Confidentiality
Agreement between the Parties dated [***] and the Secrecy
Agreement executed by Micromet on [***] (as amended effective as
of [***]).

     

    10.2       Exclusions.  Notwithstanding
the foregoing, any information of a Party will not be deemed Confidential
Information with respect to the Receiving Party for purposes of this Agreement
if such information:

     

    10.2.1          was
already known or available to the Receiving Party or its Affiliates at the time
of disclosure to the Receiving Party, other than under an obligation of
confidentiality or non-use to the Disclosing Party; provided, however, that this
exception will not apply to the terms of this Agreement or the identity of the
Collaboration Target;

     

    10.2.2          was
generally available or known to parties reasonably skilled in the field to which
such information pertains or was otherwise part of the public domain at the time
of its disclosure to the Receiving Party;

     

    10.2.3          became
generally available or known to parties reasonably skilled in the field to which
such information pertains or otherwise became part of the public domain after
its disclosure to the Receiving Party, other than through the Receiving Party’s
breach of its obligations under this Section 10;

     

    10.2.4          was
disclosed to the Receiving Party or any of its Affiliates, other than under an
obligation of confidentiality or non-use, by a Third Party who had no obligation
to the Disclosing Party not to disclose such information to others;
or

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        31

        
          

        

      

      
         

      

    

     

    10.2.5          was
independently discovered or developed by the Receiving Party or its Affiliates,
as evidenced by their written records, without the use of Confidential
Information of the Disclosing Party.

     

    10.3       Disclosure and Use
Restriction. 
Except as expressly provided herein, the Parties agree that, during the Term and
for [***] years thereafter, each Party and its Affiliates will keep completely confidential and will
not publish or otherwise disclose any Confidential Information of the other
Party or its Affiliates.  Neither Party will use any Confidential
Information of the other Party without such other Party’s consent, except as
expressly permitted by this Agreement.

     

    10.4       Authorized
Disclosure.  Each Party may use and disclose Confidential
Information of the other Party to the extent that such use and
disclosure:

     

    10.4.1          is
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 such Party will
first have given notice to such other Party and given such other 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 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;

     

    10.4.2          is
otherwise required by applicable laws, regulations or the rules of any
nationally recognized security exchange; provided, however, that the
Disclosing Party will provide such other Party with notice of such disclosure in
advance thereof to the extent practicable;

     

    10.4.3          is
made by such Party to the regulatory authorities as required in connection with
any filing of INDs, BLAs, marketing approval applications, or similar
applications or requests for regulatory approvals; provided, however, that
reasonable measures will be taken to assure confidential treatment of such
information;

     

    10.4.4          is
made by such Party, in connection with the performance of the purposes of this
Agreement, on a need-to-know basis to Affiliates, contractors, employees,
consultants, allowed sub-licensees, 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 10;

     

    10.4.5          is
limited to the terms of this Agreement only (excluding any development plans)
and is made by a Party to existing or potential acquirers or merger candidates,
existing or potential sublicensees, investment bankers or existing or potential
investors, including venture capital firms or other financial institutions, 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 10;
or

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
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    10.4.6          is
made in a patent application expressly permitted to be filed under Section
7.8.

     

    
      	
              11.

            	
              Public
      Communications

            

    

     

    11.1       General
Provisions.  The Parties will cooperate with respect to the
timing and content of communications with the public regarding this Agreement
and any activities within the [***], subject to the
provisions of this Section 11.  Neither Party will make public use of
the other Party’s name except as required by applicable law or regulation, or
otherwise as agreed in writing by such other Party, in which case Bayer will be
referred to as “Bayer Schering Pharma AG, Germany”. Bayer hereby notifies
Micromet that the rights to the Schering name in North America are owned by a
Third Party not under the control of Bayer.

     

    11.2        Press Releases.  On
the Effective Date or first Business Day thereafter, each Party may issue the press
release regarding
the execution of this Agreement in the form attached in Exhibit
F.  For subsequent press releases relating to this Agreement or
the Parties’ relationship hereunder, each Party will submit to the other Party a
draft of such press release for review and comment at least [***] Business Days
prior to the date on which such Party plans to issue such press release, and
will issue such press release only upon the other Party’s written
consent.  Nothing in this Section 11.2 will require a Party to
withhold or delay any disclosure required under Applicable Law.

     

    11.3        Publications and
Presentations.

     

    11.3.1   At
least [***] days prior
to submission of any material related to the activities within the [***] for publication in print
or electronic media or presentation at conferences, the submitting Party will
provide to the other Party a draft of such material for its review and comment.
The receiving Party will provide any comments to the submitting Party within
[***] days of receipt of
such materials, and the submitting Party will withhold the material from
submission for publication or presentation if the receiving Party has not given
its written consent to the publication or presentation, as
applicable.

     

    11.3.2   In
addition, as soon as reasonably possible prior to submission of any material
related to the activities within the [***] (i) for publication in
print or electronic media or (ii) for presentation at a conference if
specifically requested by Micromet from the [***] immediately before a
conference, Bayer will provide to Micromet the final draft of such material for
information purposes, provided that Bayer may make this dependent on Micromet’s
employees signing personal pledges in order to prevent insider trading. For the
avoidance of doubt, the Parties agree that any failure of Bayer to comply with
this Section 11.3.2 shall not be considered a breach of this
Agreement.

     

    11.3.3   Without
limiting a Party’s right under Section 10, a Party may use presentation
materials that have been previously approved by a Party for a presentation by
the other Party in subsequent presentations having a similar context without
additional approvals under this Section 11.3.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
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              12.

            	
              Term
      and Termination

            

    

     

    12.1       Term.  The term of
this Agreement (the “Term”) will commence on the
Effective Date and will expire upon the expiration and satisfaction of all
payment obligations for the Product, unless earlier terminated as provided in
this Agreement.

     

    12.2       Termination
for Material Breach.

     

    12.2.1    If a
Party (the “Breaching
Party”) commits a material breach of this Agreement, the other Party (the
“Non-Breaching Party”)
may give to the Breaching Party written notice specifying the nature of the
material breach and requiring the Breaching Party to make good or otherwise cure
such material breach.

     

    12.2.2    If
such material breach is not cured within [***] days (in the case of a failure to
make a payment due under this Agreement) or [***] days (in the case of any other
material breach) after the receipt of notice pursuant to Section 12.2.1 above,
the Non-Breaching Party will have the right, on written notice to the Breaching
Party, to terminate this Agreement without prejudice to any of its other rights
and remedies conferred on it by this Agreement or by law; provided, however, that in
the case of any breach by Bayer of Section 4.5.2 that is not capable of being
cured within a [***] day period, the foregoing cure period will be extended for
so long as Bayer is conducting the activities set forth in a written plan
submitted by Bayer to Micromet (and subject to the approval of Micromet, such
approval not to be unreasonably withheld) not later than [***] days following
any notice by Micromet under this Section 12.2 with such plan describing in
detail the specific activities and timeframes necessary to cure such breach. If
the breach is limited to specific countries, the right to terminate will be
limited to such countries, provided that if Bayer commits a material breach
relating to the majority of the Major Markets, the Agreement may be terminated
in its entirety.

     

    12.3       Termination [***].

     

    12.3.1    Bayer
may terminate this Agreement in its entirety during the Option Period for any
reason or no reason by [***] days prior written notice to Micromet.

     

    12.3.2    Bayer
may terminate this Agreement in its entirety [***].

     

    12.3.3    Bayer
may terminate this Agreement with respect to a particular country
[***].

     

    
      	
              13.

            	
              Effects
      of Termination

            

    

     

    13.1       Program
Transfer upon Termination.

     

    13.1.1      Promptly
following any notice of termination and Effective Date of such termination
pursuant to Section 4.9, Section 12.2 (except where Micromet is the breaching
Party) or Section 12.3, Bayer will, at Micromet’s cost and to the extent legally
possible without breaching any obligations towards Third Parties, transfer or
assign to Micromet or its designee all materials, documentation, processes,
Regulatory Submissions, Marketing Approvals, any other approvals or licenses
granted by any Regulatory Authority (including all submissions relating to such
approvals or licenses), licenses and other items as are reasonably necessary for
Micromet to continue the development or Commercialization of the Product in the
Territory or country for which this Agreement is terminated (such transfer,
including the actions listed below hereafter referred to as the “Program Transfer”, and the
Territory or country for which this Agreement is terminated hereafter referred
to as the “Terminated
Territory”). Without limiting the generality of the foregoing, Bayer will
(to the extent requested by Micromet and legally possible without breaching any
obligations towards Third Parties):

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        34

        
          

        

      

      
         

      

    

     

    (a)           transfer
to Micromet all data, materials, reports and information in Bayer’s possession
or control that were developed under the Collaboration Program, and treat the
foregoing as “Confidential Information” of Micromet under Section
10;

     

    (b)           transfer
to Micromet all Regulatory Submissions, Marketing Approvals and all other
approvals or licenses issued by any Regulatory Authority relating to the Product
(together with copies or originals of all correspondence with or to any
Regulatory Authority in connection with the foregoing) in the Terminated
Territory;

     

    (c)           transfer
to Micromet the management and continued performance of any clinical trials for
the Product ongoing as of the Effective Date of such termination in the
Terminated Territory, subject to an obligation from Micromet to indemnify and
hold Bayer harmless from and against any damages resulting from the continued
performance of the clinical trials;

     

    (d)           transfer
to Micromet all clinical and commercial supplies of the Product in Bayer’s
possession or control;

     

    (e)           
transfer [***] for the
Product [***] on an
[***];

     

    (f)           to
the extent that a[***]
for the Product has been [***] suitable for [***] or [***], to continue to [***] at the [***] as [***] and at [***] to be [***] until [***] has [***] and is [***], but in no event for a
period exceeding [***]
after the effective date of termination; provided, however, that
[***] to continue [***] if [***] of the Product to [***] for such [***] period or if it has
[***] allowing for such
[***] and provided
further that [***] to do
any [***];

     

    (g)           [***] any or all [***], relating solely to the
[***], to the extent
permissible under the terms of [***];

     

    (h)           [***] its entire [***] any [***] relating specifically to
[***], including any
[***] for the foregoing;
and

     

    (i)           [***] a [***], under any [***] and under any [***] that would be [***].

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        35

        
          

        

      

      
         

      

    

    Bayer
will use diligent efforts during the Term to ensure that [***] with a Third Party will
not otherwise [***] in
connection with [***].  If, despite
such diligent efforts, Bayer would [***] described above, then (i)
Bayer will [***]; and
(b) pending any such [***], Bayer will provide
Micromet, during a period no longer than [***] from the effective date
of the termination, with the [***], at no cost to Micromet
(other than the reimbursement of all reasonable costs and expenses directly
incurred by [***] in
performing under the terms of such contract) to the extent possible to achieve
[***].

    

    13.1.2      If
the Agreement is terminated by Micromet under [***] or by Bayer under [***] in
its entirety or with respect to any Terminated Territory [***], in consideration
of the Program Transfer, Micromet will make to Bayer payments according to the
following schedule until such time as Bayer has received an amount equivalent to
[***] times the [***] pursuant to this Agreement in respect of such Terminated
Territory (“the Compensation”):

     

    (a)           In
case Micromet [***] under the Licensed Technology [***] or [***] (a “[***]”) the
following [***] to the extent attributable to the license of rights in and to
the Product:

     

    (i)           [***]
of [***] under the [***] for the Product if such [***] to the [***] anniversary
following the Effective Date of termination;

     

    (ii)         [***]
of [***] under the [***] for the Product if such [***] the [***] but prior to
the [***] anniversary of the Effective Date of termination;

     

    (iii)        [***]
of [***] under the [***] for the Product if such [***] the [***] anniversary but
prior to the [***] anniversary of the Effective Date of termination;
and

     

    (iv)         [***]
of [***] under the [***] for the Product if such [***] the
[***]  anniversary but prior to the [***] anniversary of the Effective
Date of termination, if the Product is [***].

     

    [***] of
the [***] under the [***] for the Product will be [***] if such [***]
anniversary of the Effective Date of termination.  All payments to
Bayer under this Section will be made by Micromet within thirty (30) days
[***].  In the event of any termination of this Agreement with respect
to a Terminated Territory, the Parties will establish a reasonable allocation of
the aggregate [***] allocable to such Terminated Territory based upon the
relative estimated economic value of such Terminated Territory to the other
remaining territories and any territory specific [***].  If the
Parties fail to reach an agreement on such allocation from [***] months of
Bayer’s termination notice, the procedure described in Section 17.4.3(a) will
apply.

     

    (b)           In
case of a Change of Control of Micromet prior to the effective date of
termination involving a company with an annual turnover of more than [***]
Euros:

     

    (i)           [***]
percent [***]%) of the [***] within thirty (30) days of the effective date of
termination;

     

    (ii)         [***]
percent [***]%) of the [***] within thirty (30) days from Market Approval for
the product in the first Major market;

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        36

        
          

        

      

      
         

      

    

     

    (iii)        [***]
percent [***]%) of the [***] within thirty (30) days from the First Commercial
Sale of the product in the first Major Market;

     

    (c)           In
case of a Change of Control of Micromet prior to the effective date of
termination involving a company with an annual turnover of more than [***]
Euros:

     

    (i)           [***]
percent [***]%) of the [***] within thirty (30) days of the effective date of
termination;

     

    (ii)         [***]
percent [***]%) of the [***] within thirty (30) days from Market Approval for
the product in the first Major market;

     

    (iii)        [***]
percent [***]%) of the [***] within thirty (30) days from the First Commercial
Sale of the product in the first Major Market;

     

    (d)           In
case of a Change of Control of Micromet after the effective date of termination
involving a company with an annual turnover of more than [***] Euros, the
acquiror will have [***] from the closing of the Change of Control to
[***].

     

    (i)      
    If the acquiror [***], payments according to Section
[***] or [***], as the case may be, will become due, except that the payments
under Section [***] and [***] will become due within [***] days after the
earlier of the acquiror’s decision and expiry of the [***] period from the
closing of the Change of Control.

     

    (ii)      
   If the acquiror does not continue the development of the
Product, no payments will become due;

     

    (iii)        If
the acquiror decides to grant licenses for the development and Commercialization
of the Product to a Third Party, Sections [***] and [***] will apply
accordingly.

     

    (e)           In
case Micromet itself Commercializes a Product and with regard to the remaining
amount of the Compensation in case of payments according to Sections 13.1.2 (a)
to (d): A royalty on Net Sales of the Product (with the definition amended mutatis mutandis to reflect
that Micromet, its Affiliates or licensees would be selling the Product) based
on the following schedule:

     

    (i)           [***]%
royalties on Net Sales of the Product, if the Agreement is terminated before
enrollment of the first patient in the [***];

     

    (ii)         [***]%
royalties on Net Sales of the Product, if the Agreement is terminated after the
enrollment of the [***] but before enrollment of the [***]

     

    (iii)        [***]%
royalties on Net Sales of the Product, if the Agreement is terminated after the
enrollment of the [***] but before [***];

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
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    (iv)           [***]%
royalties on Net Sales of the Product, if the Agreement is terminated after the
[***].

     

    No other
compensation will be owed by Micromet to Bayer in connection with the Program
Transfer or the license granted under Section 13.1.1(i).

     

    13.2       Termination of
Licenses.  Upon any termination of this Agreement in its
entirety or with respect to one or more countries, all rights and licenses
granted by Micromet to Bayer hereunder with respect to the Terminated Territory
will terminate.

     

    13.3       Rights Upon
Expiration.  Upon expiration of this Agreement pursuant to
Section 12.1, Bayer will have a non-exclusive, fully paid, royalty-free right
and license under the Licensed Technology to make, have made, use, sell, offer
for sale, and import the Product in the Territory in the Field. Notwithstanding
the foregoing, Bayer will continue to make any payments required by Section 8.4
for as long as such payments are due, and Bayer’s rights as a sublicensee under
the Sublicensed Technology will remain subject to Bayer’s compliance with
Section 8.4.

     

    13.4       Accrued
Rights.  Termination of this Agreement for any reason will be
without prejudice to any rights that will have accrued to the benefit of a Party
prior to the Effective Date of such termination.  Such termination
will not relieve a Party from obligations that are expressly indicated to
survive the termination of this Agreement.

     

    13.5       Survival.  Sections
1, 4.6.1, 4.6.2, 4.6.3, 7.2.2, 7.3, 7.8 and 7.9 (with respect to [***] only),
9.1, 9.3, 9.4, 9.5, 10, 11.1, 13, 14, 15, 16 and 17, together with any
definitions used or exhibits referenced therein, will survive any termination or
expiration of this Agreement.

     

    
      	
              14.

            	
              Indemnification
      and Insurance

            

    

     

    14.1       Indemnification of
Micromet.  Bayer will indemnify Micromet and its Affiliates,
and their respective directors, officers, and employees (each, a “Micromet Indemnitee”), and
defend and hold each of them harmless from and against any and all losses,
damages, liabilities, costs and expenses (including reasonable attorneys’ fees
and expenses) (collectively, “Losses”) arising in connection
with any and all claims, demands, lawsuits, or investigations by a Third Party
(each a “Third Party
Claim”) against a Micromet Indemnitee, to the extent caused by or arising
out of: (a) any breach by Bayer of this Agreement, (b) the negligence or willful
misconduct on the part of Bayer or its Affiliates, or contractors in performing
any activity contemplated by this Agreement, or (c) the development or
Commercialization of the Product in the Territory by Bayer, its Affiliates or
licensees; excluding, in each case, indemnification to the extent Micromet has
an obligation to indemnify Bayer pursuant to Section 14.2.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
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    14.2       Indemnification of
Bayer.  Micromet will indemnify Bayer, its Affiliates, and
their respective directors, officers, and employees (each, a “Bayer Indemnitee”), and defend
and hold each of them harmless from and against any and all Losses arising in
connection with any Third Party Claim against a Bayer Indemnitee, to the extent
caused by or arising out of: (a) any breach by Micromet of this Agreement, or
(b) the negligence or willful misconduct on the part of Micromet or its
Affiliates in performing any activity contemplated by this Agreement; (c) the
development or Commercialization of the Product in the Territory by Micromet,
its Affiliates or licensees; or (d) the development or Commercialization of
Micromet Products in the Territory by Micromet, its Affiliates or licensees; in
each case, excluding indemnification to the extent Bayer has an obligation to
indemnify Micromet and its Affiliates pursuant to Section 14.1. In addition and
notwithstanding anything else stated in Section 8.4.1 or 8.4.2, Micromet will
indemnify the Bayer Indemnitees and defend and hold each of them harmless from
and against any and all Losses arising in connection with any Third Party Claim
against a Bayer Indemnitee on the basis of infringement of Third Party
intellectual property rights by Micromet (or its Affiliates or contractors)
prior to the date of exercise of the Option.

     

    14.3       Notice of
Claim.  All indemnification claims in respect of any Bayer
Indemnitee or Micromet Indemnitee seeking indemnity under Sections 14.1 or 14.2
(collectively, the “Indemnitees” and each an
“Indemnitee”) will be
made solely by the corresponding Party (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 Section 14.1 or Section 14.2, provided
that the failure to give prompt notice will not preclude the Indemnified Party
from being identified, 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).  Together with the Indemnification Claim
Notice, the Indemnified Party will furnish promptly to the Indemnifying Party
copies of all notices and documents (including court papers) received by any
Indemnitee in connection with the Third Party Claim.

     

    14.4       Control of
Defense.  At its option, the Indemnifying Party may assume the
defense of any Third Party Claim subject to indemnification as provided for in
Sections 14.1 and 14.2 by giving written notice to the Indemnified Party within
thirty (30) days after the Indemnifying Party’s receipt of an Indemnification
Claim Notice and thereby accepts in a final and binding manner its obligation to
indemnify the Indemnified Party with regard to the respective Third Party Claim.
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 a legal counsel
selected by the Indemnifying Party and reasonably acceptable to the Indemnified
Party and will have control over the defense of 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. If the Indemnifying Party, after receipt of a
Indemnification Claim Notice, declines to assume the defense or does not confirm
its willingness to assume the defense within thirty (30) days from receipt of
the Indemnification Claim Notice, the Indemnitee may assume the defense.
Assumption of the defense in such case will not preclude the Indemnitee from
seeking indemnification from the Indemnifying Party.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        39

        
          

        

      

      
         

      

    

    14.5     
 Right to Participate in
Defense.  Without limiting Section 14.4, 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 (a) the employment thereof has
been specifically authorized by the Indemnifying Party in writing, or (b) the
Indemnifying Party has failed to assume the defense and employ counsel in
accordance with Section 14.4 (in which case the Indemnified Party will control
the defense).

     

    14.6       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
has 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 pursuant to such judgment, settlement or
other disposition in a manner that will allow the Indemnified Party to timely
pay such amounts as requested by the judgment, settlement or other disposition.
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 14.4, 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 that has assumed the
defense of the Third Party Claim in accordance with Section 14.4 will not be
liable for any settlement or other disposition of a Loss by an Indemnitee that
is reached without the written consent of such 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
first offering to the Indemnifying Party the opportunity to assume the defense
of the Third Party Claim in accordance with Section 14.4.

     

    14.7       Cooperation.  If 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 with such Third Party Claim.  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
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 with such cooperation. The
Indemnifying Party will reasonably cooperate and consult with the Indemnitee in
the defense of the Third Party Claim and will give the Indemnitee the
possibility to comment on any filings or writings received from the Third Party
or submitted to the Third Party, its attorneys or any courts in connection with
the defense of the Third Party Claim.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        40

        
          

        

      

      
         

      

    

     

    14.8       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 similarly
situated parties, and will upon request provide the other Party with a written
confirmation of its insurance company in that regard.

     

    
      	
              15.

            	
              Representations
      and Warranties; Compliance

            

    

     

    15.1    
  Mutual
Representations and Warranties.  Each Party hereby represents
and warrants to the other Party that, as of the Effective Date:

     

    15.1.1         Such
Party (a) has the corporate power and authority to enter into this Agreement and
perform its obligations hereunder, and (b) has taken all necessary corporate
action on its part required to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder;

     

    15.1.2       
This Agreement has been duly executed and delivered on behalf of such
Party and constitutes a legal, valid and binding obligation of such Party and is
enforceable against it in accordance with its terms subject to the effects of
bankruptcy, insolvency or other laws of general application affecting the
enforcement of creditor rights and judicial principles affecting the
availability of specific performance;

     

    15.1.3       
The execution and delivery of this Agreement and the performance of such
Party’s obligations hereunder (a) do not conflict with or violate any
requirement of any provision of the articles of incorporation, bylaws or any
similar instrument of such Party in any material way, and (b) do not conflict
with, violate, or breach or constitute a default or require any consent under,
any contractual obligation or court or administrative order by which such Party
is bound.

     

    15.2       Additional Representations and
Warranties of Micromet.  Micromet hereby represents and
warrants to Bayer that, as of the Effective Date, and as of the date of receipt
of the  Option Exercise Notice (except as disclosed in a separate
disclosure schedule to be provided to Bayer pursuant to Section
2.3):

     

    15.2.1       
Micromet is a corporation duly organized, validly existing and in good
standing under the laws of Germany, and has full corporate power and authority
and the legal right to own and operate its property and assets and to carry on
its business as it is now being conducted and as it is contemplated to be
conducted by this Agreement.

     

    15.2.2       
Micromet is the sole and exclusive owner of all right, title and interest
in the Licensed Technology or, as the case may be, has obtained licenses
thereto.

     

    15.2.3        To
Micromet’s knowledge (i) Micromet has not received any written allegation from a
Third Party that any Patent within the Micromet Technology is invalid or
unenforceable and (ii) no Patent within the Micromet Technology is subject to
interference, reexamination, reissue, revocation, opposition, appeal or other
administrative proceedings.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        41

        
          

        

      

      
         

      

    

     

    15.2.4        Micromet
has not received, with respect to the Licensed Technology, any notice of
infringement or any written communication relating in any way to a possible
infringement of any Third Party patent rights by its activities prior to the
Effective Date or the activities of either Party contemplated by this
Agreement.

     

    15.2.5        Micromet
has the right and authority to grant the rights and licenses granted to Bayer
pursuant to the terms and conditions of this Agreement, and Micromet has not
granted (and will not grant during the Term) any right, license, or interest in,
to, or under the Micromet Technology that is inconsistent with the rights,
licenses, and interests granted to Bayer under the terms and conditions of this
Agreement.

     

    15.2.6        Micromet
has not placed, and to Micromet’s knowledge there does not exist, upon the
Micromet Technology any encumbrance, charge or lien (other than licenses granted
under the Micromet Technology that do not violate 15.2.5).

     

    15.2.7        The
Patents listed on Exhibit C represent
all Patents within Micromet’s Control required or useful for the development and
Commercialization of the Product.

     

    15.2.8        The
Patents listed on Exhibit C have been
filed and maintained in a manner consistent with its standard practice in each
applicable country in the Territory and all applicable fees have been paid on or
before the due date for payment.

     

    15.2.9        To
Micromet’s knowledge, all inventors of inventions claimed in the Patents listed
on Exhibit C
have assigned, or have a contractual obligation to assign, their entire right,
title and interest in and to such inventions to Micromet and the inventors
listed are correct and there are no claims or assertions in writing regarding
the inventorship of such Patents alleging that additional or alternative
inventors ought to be listed.

     

    15.2.10      Micromet
did not receive from [***] nor utilize in its activities relating to a BiTE
Antibody binding to the Collaboration Target any [***] (as defined in the [***]
Agreement).

     

    15.3       Additional Representations and
Warranties of Bayer. Bayer hereby represents and warrants to Micromet
that, as of the Effective Date, Bayer is a corporation duly organized, validly
existing and in good standing under the laws of Germany, and has full corporate
power and authority and the legal right to own and operate its property and
assets and to carry on its business as it is now being conducted and as it is
contemplated to be conducted by this Agreement.

     

    15.4       Compliance.  Each
Party will conduct its respective activities with respect to the Product in good
scientific manner, and in compliance in all material respects with all
requirements of Applicable Laws and good laboratory practices, where and if
applicable. Micromet covenants to conduct any assays testing the cytolytic
activity of the Product against cells expressing the Collaboration Target only
in countries where no Patent claiming such assays has been
issued.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        42

        
          

        

      

      
         

      

    

     

    
      	
              16.

            	
              Disclaimer;
      Limitation of Liability

            

    

     

    16.1       Disclaimer of
Warranty.  EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN
SECTION 15, BAYER AND MICROMET MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES,
EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR
OTHERWISE, AND BAYER AND MICROMET EACH SPECIFICALLY DISCLAIMS ANY OTHER
REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, STATUTORY OR
IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR
THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES.

     

    16.2       Limitation of
Liability.  IN NO EVENT WILL EITHER PARTY BE LIABLE 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 LIMIT EITHER PARTY’S
OBLIGATIONS TO THE OTHER PARTY UNDER SECTIONS 10 AND 14.

     

    
      	
              17.

            	
              Miscellaneous

            

    

     

    17.1       Force
Majeure.  Neither Party will be held liable or responsible to
the other Party or be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from events beyond the reasonable
control of the non-performing Party, including fires, floods, embargoes,
shortages, epidemics, quarantines, war, acts of war (whether war be declared or
not), insurrections, riots, civil commotion, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority.  The non-performing Party will notify the
other Party of such force majeure within ten days after such occurrence by
giving written notice to the other Party stating the nature of the event, its
anticipated duration, and any action being taken to avoid or minimize its
effect.  The suspension of performance will be of no greater scope and
no longer duration than is necessary and the non-performing Party will use
commercially reasonable efforts to remedy its inability to perform; provided, however, that in the event
the suspension of performance continues for [***] days after the date of the
occurrence, the Party not affected by such force majeure may terminate this
Agreement immediately upon written notice to the other Party.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        43

        
          

        

      

      
         

      

    

    17.2       Assignment.  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 obligations under this Agreement without the
prior written consent of the other Party (which consent may be granted, withheld
or conditioned at such other Party’s sole and absolute discretion); provided, however, that either Party
may assign or transfer this Agreement or any of its rights or obligations under
this Agreement without the consent of the other Party (a) to any Affiliate of
such Party provided that such transfer and assignment will be effective for only
so long as such Affiliate remains an Affiliate, or (b) to any Third Party with
which it merges or consolidates, or to which it transfers all or substantially
all of its (in the case of Bayer: oncology) assets.  In case of an
assignment pursuant to (a) the assigning Party (unless it is not the surviving
entity) will remain jointly and severally liable with the relevant Affiliate
assignee under this Agreement.  Any such assignment will not be
effective unless and until the relevant Affiliate assignee, Third Party assignee
or surviving entity assumes in writing all of the assigning Party’s obligations
under this Agreement.  A copy of such written assumption of
obligations will be provided to the other Party upon request.  Any
purported assignment or transfer in violation of this section will be void ab initio and of no force or
effect.

     

    17.3       Severability.  If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future law, and if the rights or obligations of either
Party under this Agreement will not be materially and adversely affected
thereby, (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 of this Agreement, (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) in lieu of such illegal, invalid or unenforceable provision,
there will be added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and reasonably acceptable to the
Parties.

     

    17.4       Governing
Law; Dispute Resolution.

     

    17.4.1       
This Agreement, and any claim, dispute, or controversy of whatever nature
arising out of or relating to this Agreement will be governed by and construed
in accordance with the laws of Germany, without giving effect to any principles,
statutory provisions or other rules of choice of law that would require the
application of the laws of a different country or state.

     

    17.4.2         The
Parties will try to settle their differences amicably between
themselves.  If any claim, dispute, or controversy of whatever nature
arising out of or relating to this Agreement, including the performance or
alleged non-performance of a Party of its obligations under this Agreement
arises between the Parties (each a “Dispute”), a Party will,
before initiating any proceedings pursuant to Section 17.4.3, notify the other
Party in writing of such Dispute.  If the Parties are unable to
resolve the Dispute within [***] days of receipt of the written notice by the
other Party, such dispute will be referred to the [***] of [***] who will meet
in person at least once and use their good faith efforts to resolve the Dispute
within [***] days after such referral.

     

    17.4.3     If
a Dispute is not resolved as provided in the preceding Section 17.4.2, whether
before or after termination of this Agreement, the Parties hereby agree
that

     

    (a)           if
the Parties fail to agree on appropriate terms and conditions for a license to
be granted pursuant to Section 7.4 or 7.5, the procedures set forth on Exhibit
G.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        44

        
          

        

      

      
         

      

    

     

    (b)           
all other disputes arising in connection with this Agreement or its validity
will be finally settled in accordance with the Arbitration Rules of the German
Institution of Arbitration e.V. (DIS) without recourse to the ordinary courts of
law. The place of arbitration is Berlin. The arbitral tribunal consists of three
(3) arbitrators, each of them being a lawyer. The language of the arbitral
proceedings is German, but documents in English language may be produced in
their original version.

     

    17.4.4        Notwithstanding
the provisions of this Section 17.4, either Party will have the right to seek
temporary injunctive relief in any court of competent jurisdiction as may be
available to such Party under the laws and rules applicable in such
jurisdiction.

     

    17.5       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 in this Agreement), or
sent by internationally-recognized overnight courier addressed as
follows:

     

    If to Bayer, to:

    

    Bayer
Schering Pharma AG

    Muellerstrasse
178

    13353
Berlin

    Germany

    Attention:
Head of TRG Oncology

    Facsimile:
+49-30-468 18069

    

    With
copies to:

    

    Bayer
Schering Pharma AG

    Muellerstrasse
178

    13353
Berlin

    Germany

    Attention:
Legal Department

    Facsimile:
+49-30-468 14086

    

    And:

    

    Bayer
Schering Pharma AG

    Muellerstrasse
178

    13353
Berlin

    Germany

    Attention:
Head of Global Therapeutic Research

    Facsimile:
+49-30-468 16707

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        45

        
          

        

      

      
         

      

    

    

    If to
Micromet, to:

    

    Micromet
AG

    Staffelseestrasse
2

    81477
Munich

    Germany

    Attention:
Head of Business Development

    Facsimile:
+49 89 895 277 205

    

    with a
copy to:

    

    Micromet,
Inc.

    6707
Democracy Boulevard

    Suite
505

    Bethesda,
MD 20817

    Attention:
General Counsel

    Facsimile:
+1-240-752-1425

    

    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 with this Agreement.  It
is understood and agreed that this Section 17.5 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.

     

    17.6       Entire Agreement;
Modifications.  This Agreement sets forth and constitutes the
entire agreement and understanding between the Parties with respect to the
subject matter of this Agreement and all prior agreements, understanding,
promises and representations, whether written or oral, with respect thereto are
superseded by this Agreement, including the Confidentiality Agreement between
the Parties dated [***] and the Secrecy Agreement executed by Micromet on [***]
(as amended effective as of [***]). Each Party confirms that it is not relying
on any representations or warranties of the other Party except those that are
expressly made in this Agreement.  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.

     

    17.7       Relationship of the
Parties.  It is expressly agreed that the relationship between
the Parties is and will be that of independent contractors, and that the
relationship between the Parties will not 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 actions, which are binding on the other Party, except with
the prior written consent of the other Party to do so.  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.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        46

        
          

        

      

      
         

      

    

    17.8       Waiver.  Any term or
condition of this Agreement may be waived at any time by the Party that is
entitled to the benefit of such term or condition, 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 under this Agreement 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 under this Agreement or of any other breach or failure by said other Party
whether of a similar nature or otherwise.

     

    17.9       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.

     

    17.10     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.

     

    17.11    
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,
agreements, documents and 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.

     

    17.12     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 hereof, and in the event of any conflict in interpretation
between the English version and such translation, the English version will
control.

     

    17.13     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.  References to “Section” or “Exhibit” are references to the
numbered sections of this Agreement and the exhibits attached to this Agreement,
unless expressly stated otherwise.

     

    [Remainder
of this page is left blank intentionally]

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        47

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the date first above written.

    

    
      
        
          	
                  Micromet
      AG

                	 
      	
                  Bayer
      Schering Pharma AG

                
	 
      	 
      	 
      	 
      	 
      
	
                  By:

                	
                  /s/ Jens Hennecke

                	 
      	
                  By:

                	
                  /s/ Andreas Busch

                
	
                  Name:

                	
                  Jens
      Hennecke

                	 
      	
                  Name:

                	
                  Prof.
      Andreas Busch

                
	
                  Title:

                	
                  Vorstand

                	 
      	
                  Title:

                	
                  Member
      of the Board of Management

                
	 
      	 
      	 
      	 
      	 
      
	
                  By:

                	
                  /s/ Patrick Baeuerle

                	 
      	
                  By:

                	
                  ppa.
      /s/ Martin Schneider

                
	
                  Name:

                	
                  Patrick
      Baeuerle

                	 
      	
                  Name:

                	
                  Prof.
      Martin Schneider

                
	
                  Title:

                	
                  Vorstand

                	 
      	
                  Title:

                	
                  Head
      of Global Therapeutic Research

                
	 
      	 
      	 
      	 
      
	
                  Legal
      Department Review:____

                	 
      	 
      	 
      

        

      

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        48

        
          

        

      

      
         

      

    

    ***Text
Omitted and Filed Separately

    Confidential
Treatment Requested

    Under
17 C.F.R. §§ 200.80(b)(4), and 240.24b-2

     

    [Signature Page to the Option,
Collaboration and License Agreement]

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    ***Text
Omitted and Filed Separately

    Confidential
Treatment Requested

    Under
17 C.F.R. §§ 200.80(b)(4), and 240.24b-2

     

    Exhibit
A

     

    D2
and D3 Decision Criteria

     

     [redacted
in full]

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    ***Text
Omitted and Filed Separately

    Confidential
Treatment Requested

    Under
17 C.F.R. §§ 200.80(b)(4), and 240.24b-2

    Exhibit
B

    

    Development
Plan

    

    [redacted
in full]

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        
        

        
          

        

      

      
         

        Confidential

      

    

    
       
Exhibit C

     

    Micromet
Technology Patents

    

    ***

     

    
      
        
          	
                  Application

                  Number

                	 
      	
                  Application

                  Filing Date

                	 
      	
                  Country

                	 
      	
                  Title of Application

                	 
      	
                  Status

                	 
      	
                  ***

                
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	 
      

        

      

    

    ***

     

    
      
        
          	
                  Application

                  Number

                	 
      	
                  Application

                  Filing Date

                	 
      	
                  Country

                	 
      	
                  Title of Application

                	 
      	
                  Status

                	 
      	
                  ***

                
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	
                  [***]

                	 
      	 
      
	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	 
      

        

      

    

    ***

     

    
      
        
          	
                  Application

                  Number

                	 
      	
                  Application

                  Filing Date

                	 
      	
                  Country

                	 
      	
                  Title of Application

                	 
      	
                  Status

                	 
      	
                  ***

                
	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	
                  [***]

                	
                    

                	 
      

        

      

    

    ***

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        1

        
          

        

      

      
         

        Confidential

      

    

    
       

      
        
          
            	
                    Application

                    Number

                  	 
      	
                    Application

                    Filing Date

                  	 
      	
                    Country

                  	 
      	
                    Title of Application

                  	 
      	
                    Status

                  	 
      	
                    ***

                  
	
                    [***]

                  	
                      

                  	
                    [***]

                  	
                      

                  	
                    [***]

                  	
                      

                  	
                    [***]

                  	
                      

                  	
                    [***]

                  	
                      

                  	 
      

          

        

      

    

    
      

        
          
            ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

             

          

          
            2

            
              

            

          

          
             

            Confidential

          

        

Exhibit
D-1

    

     

    As
specified in Section 8.4.1, Bayer will make payments to Micromet in amounts
corresponding to the amounts payable by Micromet listed below:

    

    
      	
               
      

            	
              1.

            	
              Non
      Exclusive Product License Agreement by and between Micromet AG and [***]
      effective as of [***] (the [***]
      Agreement”)

            

    

    

    A.  Therapeutic
Licensed Product Milestone Payments and Royalty Rates:

    

    
      	
               
      

            	
              1.

            	
              Milestones.  As
      part of the consideration for the [***] Agreement, Micromet
      will pay to [***] the following
      non-refundable, non-creditable milestone payments for each Therapeutic
      Licensed Product:

            

    

    

    
      
        
          
            	
                    Milestone Event

                  	 
      	
                    Milestone Payment 

                  
	
                    Initiation
      of Phase I Clinical Trials for such Therapeutic Licensed Product in the
      first Major Market Country

                  	 
      	
                    [***]

                  
	 	 	 
	
                    Acceptance
      of the filing of the first Marketing Approval for such Therapeutic
      Licensed Product in the first Major Market Country

                  	 
      	
                    [***]

                  
	 	 	 
	
                    Receipt
      of first Marketing Approval for such Therapeutic Licensed Product in the
      first Major Market Country

                  	 
      	
                    [***]

                  

          

        

      

    

    

    
      	
               
      

            	
              2.

            	
              Royalties

            

    

     

    
      	
               
      

            	
              a.

            	
              Micromet
      will pay to [***] 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 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 [***] 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) [***] years from first commercial sale for use or
      consumption by the general public of such Therapeutic Licensed Product by
      or on behalf of Licensee 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.

            

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        1

        
          

        

      

      
         

        Confidential

      

    

     

    
      	
               
      

            	
              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 [***] Background
      Know-How and which is first sold commercially after the expiration of the
      last to expire Valid Claim of the [***] 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.

            

    

     

    B.  Diagnostic
Licensed Product Milestone Payments and Royalty Rates:

    

    
      	
               
      

            	
              1.

            	
              Milestones.

            

    

    

    As part
of the consideration for the [***] Agreement, Micromet will pay to [***] the
following non-refundable, non-creditable milestone payments for each Diagnostic
Licensed Product:

    

    
      
        
          	
                  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

                	 
      	
                  [***]

                
	 	 	 
	
                  Receipt
      of first Marketing Approval for each such Diagnostic Licensed Product in
      the first Major Market Country

                	 
      	
                  [***]

                

        

      

    

     

    
      	
               
      

            	
              2.

            	
              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 milestone payments set forth above will
      be payable as if the relevant milestone events had occurred as of the date
      of such first commercial sale.

            

    

     

    
      	
               
      

            	
              3.

            	
              Royalties

            

    

     

    
      	
               
      

            	
              a.

            	
              Micromet
      will pay to [***] 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 Licensee 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 [***] 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) [***] years from
      first commercial sale for use or consumption by the general public of such
      Diagnostic Licensed Product by or on behalf of Licensee 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.

            

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        2

        
          

        

      

      
         

        Confidential

      

    

     

    
      	
               
      

            	
              b.

            	
              Notwithstanding
      anything herein to the contrary, the Parties agree that no royalties will
      be payable by Licensee for a particular country in respect of any
      Diagnostic Licensed Product which does not utilize the [***] Background
      Know-How and which is first sold commercially after the expiration of the
      last to expire Valid Claim of the [***] 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.

            

    

     

    C.  Key
Defined Terms

     

    
      	
               
      

            	
              1.

            	
              “Diagnostic Licensed
      Product” means any Licensed Product (including a composition,
      formulation, device, assay or other product, but excluding Microarrays (as
      defined in Schedule V of the
      [***] Agreement))
      (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.

            

    

     

    
      	
               
      

            	
              2.

            	
              “Licensed Product” means
      any product, substance or formulation arising from the Target Program, and
      (a) the Development, manufacture, importation, use or sale of which would
      but for the provisions of this Agreement infringe one or more Valid Claims
      under the [***] Licensed Patents, or
      (b) which utilizes the [***] Background
      Know-How.

            

    

     

    
      	
               
      

            	
              3.

            	
              “Major Market Country”
      means the [***],
      the [***], [***], [***], [***], [***], and
  [***].

            

    

     

    
      	
               
      

            	
              4.

            	
              “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.

            

    

     

    
      	
               
      

            	
              5.

            	
              “Net Sales” means the
      gross amount invoiced by Licensee, its Affiliate or its sublicensee for
      sales of Licensed Products to any Third Party (and in all cases amounts
      actually 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 Licensee, 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 Licensee, its Affiliate or its sublicensee for sales of such Licensed
      Product, then Licensee 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).

            

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        3

        
          

        

      

      
         

        Confidential

      

    

     

    Any
amounts received on account of transfers of Licensed Products between Licensee,
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 Licensee, 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 Licensee, 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
Licensee, its Affiliate or sublicensee.  In the event that no such
separate sales are made by Licensee, 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 Licensee, its Affiliate or sublicensee, as applicable.

     

    
      	
               
      

            	
              6.

            	
              “Therapeutic Licensed
      Product” means any Licensed Product for which Marketing Approval is
      sought or received for therapeutic or prophylactic use in
      humans.

            

    

     

    All other
capitalized terms above have the meanings given to such terms in the [***]
Agreement.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        4

        
          

        

      

      
         

        Confidential

      

    

    Exhibit
D-2

    

    As
specified in Section 8.4.2, Micromet will be responsible for the following
payments:

    

    
      	
               
      

            	
              1.

            	
              Non-Exclusive
      Product License Agreement by and between Micromet AG and [***] effective
      as of [***](the [***]
      Agreement”)

            

    

    

    
      	
               
      

            	
              2.

            	
              [***]
      Transfer Agreement by and between Micromet AG and certain inventors named
      therein dated as of April 22, 2005 (the
[***])

            

    

    

    
      	
              A.

            	
              Micromet will be responsible
      for the following payments under the [***]
    Agreement:

            

    

    

    
      	
               
      

            	
              1.

            	
              Milestones.  As
      part of the consideration for the [***] Agreement, Micromet will pay to
      [***] the following non-refundable, non-creditable milestone payments for
      each Therapeutic Licensed Product and Diagnostic Product,
      respectively:

            

    

    

    
      
        
          
            
              
                
                  
                    	
                            Therapeutic Licensed Product Milestone Event

                          	 
      	
                            Milestone Payment 

                          
	
                            Initiation
      of Phase I Clinical Trials for such Therapeutic Licensed Product in the
      first Major Market Country

                          	 
      	
                            [***]

                          
	 	 	 
	
                            Acceptance
      of the filing of the first Marketing Approval for such Therapeutic
      Licensed Product in the first Major Market Country

                          	 
      	
                            [***]

                          
	 	 	 
	
                            Receipt
      of first Marketing Approval for such Therapeutic Licensed Product in the
      first Major Market Country

                          	 
      	
                            [***]

                          

                  

                

              

            

          

        

      

    

    

    
      
        
          
            
              
                	
                        Diagnostic Licensed Product 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

                      	 
      	
                        [***]

                      
	 	 	 
	
                        Receipt
      of first Marketing Approval for each such Diagnostic Licensed Product in
      the first Major Market Country

                      	 
      	
                        [***]

                      

              

            

          

        

      

    

    

    
      	
               
      

            	
              2.

            	
              Royalties.  Micromet
      will pay to [***] a royalty payment equal to [***]% of Net Sales of each
      Therapeutic Licensed Product and [***]% of Net Sales of each Diagnostic
      Licensed Product sold by Micromet, its Affiliates or sublicensees
      throughout the world.  In the event that the period of [***]
      years from first commercial sale for use or consumption is longer than the
      expiration of the last to expire Valid Claim of the [***] Licensed
      Patents, the royalty rates will be reduced for Therapeutic Products to
      [***]% of Net Sales and for Diagnostic Products to [***]% of Net
      Sales

            

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        1

        
          

        

      

      
         

        Confidential

      

    

     

    
      	
               
      

            	
              3.

            	
              All
      capitalized terms above have the meanings given to such terms in the [***]
      Agreement.

            

    

     

    
      	
              B.

            	
              Micromet will be responsible
      for the following payments under the [***]
    Agreement:

            

    

    

    
      	
               
      

            	
              1.

            	
              Milestones.  As
      part of the consideration for the [***] Agreement, Micromet will pay the
      following milestones to the
Inventors:

            

    

    

    
      
        
          
            
              
                	
                        Milestone Event

                      	 
      	
                        Milestone Payment 

                      
	
                        After
      start of treatment of the first patient in the first Phase I clinical
      Trial

                      	 
      	
                        [***]

                      
	 	 	 
	
                        After
      start of treatment of the first patient in the first Pivotal
      Trial

                      	 
      	
                        [***]

                      
	 	 	 
	
                        After
      first grant of first Regulatory Approval in any Major Market
      Country

                      	 
      	
                        [***]

                      

              

            

          

        

      

    

    

    
      	
               
      

            	
              2.

            	
              Royalties.  Under
      the [***] Agreement, Micromet will pay a royalty of [***]% of Net Sales to
      Inventors

            

    

    

    
      	
               
      

            	
              3.

            	
              All
      capitalized terms above have the meanings given to such terms in the [***]
      Agreement.

            

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        2

        
          

        

      

      
         

        Confidential

      

    

    Exhibit
D-3

    

    
      	
              A.

            	
              Terms relating to the
      [***] Agreement
      and [***]
      Agreement

            

    

    

    Notwithstanding
the rights granted by Micromet to Bayer in this Agreement, the following terms
apply to any sublicenses granted by Micromet to Bayer under the [***] Agreement
and [***] Agreement:

    

    
      	
               
      

            	
              1.

            	
              Bayer
      acknowledges and agrees that:

            

    

    

    
      	
               
      

            	
              a.

            	
              The
      definition of “Target” pursuant to Section 1.38 of the [***] Agreement is
      different from the definition of “Collaboration Target” in this Agreement,
      and that the sublicense to Bayer under the under the [***] Agreement is
      granted to Products binding to the “Target” as defined in the [***]
      Agreement;

            

    

    

    
      	
               
      

            	
              b.

            	
              Pursuant
      to Section 2.1 of each of the [***] Agreement and [***] Agreement, the
      licenses granted to Micromet under the [***] Agreement and [***]
      Agreement, respectively, are non-exclusive licenses, and that the
      sublicense granted by Micromet to Bayer under Section 7.1.2 of each of the
      [***] Agreement and [***] Agreement is a non-exclusive sublicense under
      the license granted to Micromet under the [***] Agreement and [***]
      Agreement, respectively; and

            

    

    

    
      	
               
      

            	
              c.

            	
              Pursuant
      Section 2.1 of each of the [***] Agreement and [***] Agreement, the
      licenses granted to Micromet under the [***] Agreement and [***]
      Agreement, respectively, only extend to Licensed Products, which are
      products, substances or formulations arising from a Target Program (as
      defined in the [***] Agreement and [***] Agreement, respectively);
      and

            

    

    

    
      	
               
      

            	
              d.

            	
              Pursuant
      to Section 2.3 of each of the [***] Agreement and [***] Agreement, [***]
      has not granted to Micromet any rights to research, develop, manufacture,
      use or sell products using [***] (each as defined in the [***] Agreement
      and [***] Agreement, respectively) or to develop, manufacture, use or sell
      any product that is a Research Product or [***] (each as defined in the
      [***] Agreement and [***] Agreement respectively), and Micromet does not
      grant to Bayer any rights under the Agreement to research, develop,
      manufacture, use or sell Products using [***] (each as defined in the
      [***] Agreement and [***] Agreement, respectively) or to develop,
      manufacture, use or sell any Product that is a Research Product or [***]
      (each as defined in the [***] Agreement and [***] Agreement,
      respectively).

            

    

    

    
      	
               
      

            	
              2.

            	
              Bayer
      acknowledges that the licenses granted to Micromet under the [***]
      Agreement and [***] Agreement include the right to practice [***] (as
      defined in the [***] Agreement and [***] Agreement,
      respectively).  Micromet hereby expressly excludes from the
      sublicense granted by Micromet to Bayer the right to practice
      [***].

            

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        1

        
          

        

      

      
         

        Confidential

      

    

     

    
      	
               
      

            	
              3.

            	
              Pursuant to Section 8.4 of the
      Agreement, Bayer will pay to Micromet milestones and royalties payable by
      Micromet to [***] as defined in Exhibit
      D-1 that may become
      due during the development or commercialization of Products by Bayer, its
      Affiliates and Sublicensees. Subject to Section 8.4, the following
      sections of the [***] Agreement will apply to each such payment: Section
      5.2, and 5.3, and including any defined terms used in said sections.
      Micromet will
      calculate the payments due to [***] under Section
      5.2 and 5.3 of the [***] Agreement based on the currency conversion clause
      in Section 5.4.4 of said agreement. For such purpose, Bayer will provide
      in the royalty report pursuant to Section 9.2 of this Agreement, the
      respective Net Sales in local currency. If the amounts paid by Micromet to
      [***] based on such calculation exceed the amounts received by Micromet
      from Bayer pursuant to Section 8.4 of this Agreement calculated based on
      the currency conversion clause in Section 9.3 of this Agreement, Bayer
      will pay such excess amount to Micromet upon receipt of an invoice from
      Micromet and supporting documentation showing the calculation of such
      excess amount on a country-by-country basis. If, based on Micromet’s
      calculation, the amounts received from Bayer exceed the amounts payable to
      [***], such excess will be credited against future amounts owed by Bayer
      to Micromet. Further, Bayer will permit [***'s] nominated representative
      to conduct audits of Bayer's records as provided in Section 5.5 of the
      [***] Agreement
      mutatis mutandis. [***] will bear
      all costs of such audit, unless the audit reveals an underpayment of more
      than [***]% from payments
      otherwise due and payable under the [***] Agreement, in which case Bayer
      will bear the cost of the audit. If, based on the results of any such
      audit, additional payments are owed to [***] under the [***] Agreement,
      Bayer will make such additional payments to Micromet, and Micromet will
      make corresponding payments to [***], promptly after the accounting firm’s
      written report is delivered to all parties. If, based on the results of
      any audit, payments made by Bayer to Micromet on account of Sections 5.2
      or 5.3 of the [***] Agreement exceeded payments indicated by the audit as
      being due thereunder, such excess will be credited against future amounts
      owed by Bayer to Micromet under Section 8.4 of this
      Agreement

            

    

    

    
      	
               
      

            	
              4.

            	
              Section
      7 of each of the [***] Agreement and [***] Agreement governs the
      disclosure and use of Confidential Information (as defined in the [***]
      Agreement and [***] Agreement, respectively) disclosed by [***] to
      Micromet.  Bayer agrees to be bound by and adhere to Section 7
      of each of the [***] Agreement and [***] Agreement with respect to all
      such Confidential Information disclosed by Micromet to Bayer under the
      Agreement and that Micromet identifies as originally disclosed by [***] to
      Micromet under the [***] Agreement and [***] Agreement,
      respectively.

            

    

    

    
      	
               
      

            	
              5.

            	
              Section
      10.4.3 of each of the [***] Agreement and [***] Agreement governs the
      handling of Confidential Information (as defined in the [***] Agreement
      and [***] Agreement, respectively) disclosed by [***] to Micromet upon
      expiration or termination of the [***] Agreement or [***] Agreement,
      respectively.  Bayer agrees to be bound by and adhere to Section
      10.4.3 of each of the [***] Agreement and [***] Agreement with respect to
      all such Confidential Information disclosed by Micromet to Bayer under the
      Agreement and that Micromet identifies as originally disclosed by [***] to
      Micromet under the [***] Agreement and [***] Agreement,
      respectively.

            

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        2

        
          

        

      

      
         

        Confidential

      

    

    

    
      	
               
      

            	
              6.

            	
              In
      accordance with Section 10.5 of the [***] Agreement, Bayer’s obligations
      under paragraph 3 of this Schedule 1 (solely as to accrued and unpaid
      amounts and Sections 5.5 and 5.7 of the [***] Agreement) will survive the
      expiration and termination of the [***] Agreement or this Agreement for
      any reason.  In addition, paragraph 4 of this Schedule 1 will
      survive the expiration or termination of the [***] Agreement or [***]
      Agreement or this Agreement for any
reason.

            

    

    

    
      	
              B.

            	
              Terms relating to the
      [***]
      Agreement

            

    

    

    Notwithstanding
the rights granted by Micromet to Bayer in this Agreement, the following terms
apply to any sublicenses granted by Micromet to Bayer under the [***]
Agreement:

    

    
      	
               
      

            	
              1.

            	
              Section
      8 of the [***] Agreement governs the disclosure and use of Confidential
      Information (as defined in the [***] Agreement) disclosed by one Party to
      the other Party. Bayer agrees to be bound by and adhere to Section 8 of
      the [***] Agreement with respect to all such Confidential Information
      disclosed by Micromet to Bayer under the Agreement and that Micromet
      identifies as originally disclosed by Inventors to Micromet under the
      [***] Agreement.

            

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        3

        
          

        

      

      
         

      

    

    
      ***Text
Omitted and Filed Separately

      Confidential
Treatment Requested

      Under
17 C.F.R. §§ 200.80(b)(4), and 240.24b-2

       
Exhibit E

     

    Milestone
Schedule for the Product intended for Humans

    

    
      
        
          	
                  Milestone Event

                	 
      	
                  Milestone

                  Payment

                
	
                  [***]

                	 
      	 
      	 
      	
                  [***]

                
	
                  [***]

                	 
      	 
      	 
      	
                  [***]

                
	
                  [***]

                	 
      	 
      	 
      	
                  [***]

                
	
                  [***]

                	 
      	 
      	 
      	
                  [***]

                
	
                  [***]

                	 
      	 
      	 
      	
                  [***]

                
	
                  [***]

                	
                  [***]

                	 
      	 
      	
                  [***]

                
	 
      	
                  [***]

                	 
      	 
      	
                  [***]

                
	
                  [***]

                	
                  [***]

                	
                  [***]

                	 
      	
                  [***]

                
	 
      	 
      	
                  [***]

                	 
      	
                  [***]

                
	 
      	 
      	
                  [***]

                	 
      	
                  [***]

                
	 
      	
                  [***]

                	
                  [***]

                	 
      	
                  [***]

                
	 
      	 
      	
                  [***]

                	 
      	
                  [***]

                
	 
      	 
      	
                  [***]

                	 
      	
                  [***]

                
	
                  [***]

                	 
      	 
      	 
      	
                  [***]

                
	
                  [***]

                	 
      	 
      	 
      	
                  [***]

                
	
                  [***]

                	 
      	 
      	 
      	
                  [***]

                

        

      

    

    

    Milestone
Schedule for the Product intended for Animals

     

    
      
        	
                Milestone Event

              	 
      	
                Milestone Payment

              
	
                [***]

              	 
      	
                [***]

              
	
                [***]

              	 
      	
                [***]

              

      

    

    

    If a
milestone event described above is achieved that is subsequent to a preceding
milestone event with respect to which Bayer has not yet made the corresponding
milestone payment, the preceding milestone event is deemed achieved, and the
corresponding milestone payment is due and payable together with the payment of
the milestone payment for the subsequent milestone event.

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    ***Text
Omitted and Filed Separately

    Confidential
Treatment Requested

    Under
17 C.F.R. §§ 200.80(b)(4), and 240.24b-2

     

    Exhibit F

     

    Press
Release

     

    [Exhibit
follows]

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    ***Text
Omitted and Filed Separately

    Confidential
Treatment Requested

    Under
17 C.F.R. §§ 200.80(b)(4), and 240.24b-2

     

    Exhibit G

     

    Dispute
Resolution Procedures

     

    
      	
              1.

            	
              The
      Parties will resolve disputes stipulated in Section 17.4.3 (a) by final
      and binding expertise proceedings in accordance with this Exhibit
      G.  The Parties will select a mutually agreeable expert
      who has significant relevant experience in the subject matter of the
      disputed issue and no affiliation or pre-existing relationship with either
      Party.  If the Parties cannot agree on an expert within thirty
      (30) days after the senior executive officers have failed to resolve the
      disagreement, either Party may request the appointment of the expert in
      accordance with the provisions for the appointment of experts under the
      Rules for Expertise of the International Chamber of
      Commerce.  The date on which such expert is selected will be the
      “Expertise Proceedings
      Commencement Date.”

            

    

     

    
      	
              2.

            	
              Each
      Party will prepare and, within ten (10) Business Days after the Expertise
      Proceedings Commencement Date, deliver to both the expert and the other
      Party its proposed license agreement and a memorandum in support thereof
      (the “Support
      Memorandum”).  The expert will also be provided with a
      copy of this Agreement.

            

    

     

    
      	
              3.

            	
              Within
      ten (10) Business Days after the receipt of all proposed license
      agreements and Support Memoranda, the expert will select from the two
      proposals provided by the Parties the proposal that the expert believes
      more accurately reflects the intention of the Parties to this Agreement
      and the industry customs regarding the manufacture, development and
      commercialization of comparable pharmaceutical products.  The
      expert’s decision will be provided in
writing.

            

    

     

    
      	
              4.

            	
              The
      expert will have reasonable discretion to request additional information,
      hold a hearing, and extend the time frame for reaching their decision
      regarding the dispute at issue.

            

    

     

    
      	
              5.

            	
              The
      expert’s fees and expenses will be shared equally by the
      Parties.  Each Party will bear and pay its own expenses incurred
      in connection with any dispute resolution under this Exhibit
      G.

            

    

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

         

      

      
        
        

        
          

        

      

      
         

      

    

     

    ***Text
Omitted and Filed Separately

    Confidential
Treatment Requested

    Under
17 C.F.R. §§ 200.80(b)(4), and 240.24b-2

     

    Exhibit H

     

    [***]
Patent Country List

     

    [***]

    
      
        ***
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

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