of December 19,
2002 ("Effective Date"), is made and entered into by and between VALENTIS, INC.,
a Delaware corporation, having its principal place of business at 863A Mitten
Road, Burlingame, CA 94010, USA ("Valentis") and SCHERING AG, a German
corporation having its principal place of business at Müllerstrasse 178, 13353
Berlin, Germany ("Schering").
Valentis and Schering each may be referred to
herein individually as a "Party," or collectively as the "Parties."
BACKGROUND
A.
Valentis owns or otherwise controls certain intellectual property
and other rights in and to technologies relating to the delivery and expression
of genes, that may have substantial commercial value; and
B.
Schering desires to obtain from Valentis a license and options to
use such delivery technologies to do research on, develop, make, have made, use
and sell pharmaceutical products; and
C.
Valentis is willing to grant such license and options to Schering
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and obligations set
forth herein, Valentis and Schering hereby agree as follows:
PART I - DEFINITIONS
1
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
indicated:
1.1
"AFFILIATE" MEANS ANY PERSON, CORPORATION,
PARTNERSHIP, FIRM, JOINT VENTURE OR OTHER ENTITY THAT, DIRECTLY OR INDIRECTLY,
THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS, IS CONTROLLED BY OR IS UNDER
COMMON CONTROL WITH, VALENTIS OR SCHERING, AS THE CASE MAY BE.
AS USED IN THIS
DEFINITION (BUT NOT ELSEWHERE IN THIS AGREEMENT), "CONTROL" MEANS THE POSSESSION
OF THE POWER TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF
AN ENTITY, WHETHER THROUGH THE OWNERSHIP OF THE OUTSTANDING VOTING SECURITIES OR
BY CONTRACT OR OTHERWISE.
1.2
"AUDIT DISAGREEMENT"
SHALL HAVE THE MEANING
SET FORTH IN SECTION 15.5.2.
6
1.3
"AVERAGE ROYALTY PERCENTAGE" SHALL HAVE THE
MEANING SET FORTH IN SECTION 5.3.1 AND 9.3.1.
1.4
"BACKUP GENE" SHALL BE A GENE SUBSTITUTED
FOR ONE OF THE GENES PURSUANT TO SECTION 13.
1.5
"BACKUP LICENSE" SHALL HAVE THE MEANING SET
FORTH IN SECTION 13.2.
1.6
"BANKRUPTCY EVENT" SHALL HAVE THE MEANING
SET FORTH IN SECTION 19.4.
1.7
"BUSINESS DAY" MEANS ANY DAY THAT IS NOT A
SATURDAY, A SUNDAY OR OTHER DAY ON WHICH BANKS ARE REQUIRED OR AUTHORIZED BY LAW
TO BE CLOSED IN CALIFORNIA, US, OR BERLIN. GERMANY.
1.8
"CLINICAL DEVELOPMENT"
MEANS THE CONDUCT OF
STUDIES OF A PRODUCT IN HUMANS TO ASSESS THE DOSING, SAFETY AND/OR EFFICACY OF
SUCH PRODUCT, INCLUDING, BUT NOT LIMITED TO, PHASE I CLINICAL TRIALS, PHASE II
CLINICAL TRIALS AND PHASE III CLINICAL TRIALS.
1.9
"CMC/MANUFACTURING" SHALL MEAN THE
DEVELOPMENT OF ONE OR MORE PROCESSES FOR THE MANUFACTURE AND PACKAGING OF THE
PRODUCT FOR PRECLINICAL DEVELOPMENT, CLINICAL DEVELOPMENT AND COMMERCIALIZATION,
AND SHALL INCLUDE, WITHOUT LIMITATION, FORMULATION, PRODUCTION, FILL/FINISH,
SOURCING OF COMPONENTS, RAW MATERIALS AND PACKAGING SUPPLIES, DEVELOPMENT OF
REGULATORY METHODS AND CONTROLS, INCLUDING ASSAYS, QUALITY CONTROL AND QUALITY
ASSURANCE METHODOLOGY AND STABILITY PROTOCOLS.
1.10
"COMMERCIALIZATION"AND "COMMERCIALIZE" SHALL
REFER TO ALL ACTIVITIES UNDERTAKEN RELATING TO THE MANUFACTURE FOR COMMERCIAL
SALE, PRE-MARKETING, MARKETING,