COLLABORATION AND LICENSE AGREEMENT

     This Agreement (Agreement) dated December 12, 2003, and effective as of January 5, 2004 (the Effective Date), is by and between Avalon Pharmaceuticals, Inc., a Delaware Corporation, located at 20358 Seneca Meadows Parkway, Germantown, Maryland 20876 (Avalon), and Aventis Pharmaceuticals Inc., a Delaware corporation with a place of business at 200 Crossing Boulevard, Bridgewater, New Jersey 08807 (Aventis).

     WHEREAS, Avalon has technology with respect to identifying potential pharmaceutical targets to be used for discovering, researching and developing pharmaceutical products; and

     WHEREAS, Aventis desires to collaborate with Avalon and provide funding to Avalon with respect to the identification, discovery and validation of druggable screening targets using Avalons proprietary molecular cytogenetics platform and Avalons and Aventis genomics, oncology and target validation capabilities, all pursuant to the terms and provisions of this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises and other good and valuable consideration, the Parties agree as follows:

 

ARTICLE 1

DEFINITIONS

     The terms used in thus Agreement have the following meanings:

     1.1 Advanced SQT means an SQT that Aventis has determined has satisfied the criteria set forth on Schedule 1.1.

     1.2 Affiliate, with respect to any Party, means any Person whether de jure or de facto, controlling, controlled by, or under common control with, such Party. For these purposes, control shall be presumed to exist if one of the following conditions is net: (a) direct or indirect ownership of more than fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (b) in the case of non-corporate entities, direct or indirect ownership of more than fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities or status as the general partner in the case of any partnership. The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside of the United States, the maximum percentage ownership permitted by law for a foreign investor may be fifty percent (50%) or less, and that in such case such lower percentage shall be substituted in the preceding sentence, provided that such owner has the power to direct the management and policies of such entity.

     1.3 Amplicon means a specific region of chromosomal DNA that is amplified in a cancer sample, as determined by comparative genomics hybridization.

     1.4 Avalon Know-How means information, trade secrets, know-how, inventions, and data that (a) is Controlled by Avalon and exists as of the Effective Date, or (b) is created solely by Avalon in Avalons performance of Research under an Research Plan during the Research Term and that, in each of the foregoing cases, relates to or is useful with respect to a DRG or use thereof in Screening. For the avoidance of doubt, Avalon Know-How does not include information, trade secrets, know-how, inventions and data that is directed to discovering or identifying Targets.

     1.5 Avalon Patent(s) means any and all Patent Rights in the Territory that claim a DRG or the manufacture of a DRG or use of a DRG in Screening, or use of a DRG in the Field, which Patent Rights are Controlled by Avalon. For the avoidance of doubt, Avalon Patents do not include Patent Rights to the extent that they claim methods or products for discovering or identifying Targets.

     1.6 Avalon Technology means, individually and collectively, Avalon Patent(s) and Avalon Know-How.