EXHIBIT
10.29




LICENSE
AGREEMENT




This
License Agreement (“Agreement”), dated May 26, 1993, between ARCH Development
Corporation, an Illinois not-for-profit corporation (“ARCH”) and GenVec, Inc., a
Delaware corporation (“Licensee”).




Purpose and
Intent




A.           ARCH
(hereinafter referred to as “Licensor”) hold rights to the Licensed Patents
defined below and Licensee desires to obtain exclusive rights to such Licensed
Patents for commercialization in a certain field.




B.           On
even date herewith, DFCI, ARCH and Licensee have entered into a separate License
Agreement regarding certain other patent rights owned jointly by the Dana-Farber
Cancer Institute (“DFCI”) and ARCH.




Therefore,
the parties agree as follows:




Agreement




1.           Definitions.  The
following capitalized terms used in this Agreement shall mean:




A.           “Affiliate” means as
to any person or entity, the possession of the power to direct or cause the
direction of the management and the policies of an entity whether through
ownership directly or indirectly of fifty percent (50%) or more of the stock
entitled to vote, and for non-stock organizations, the right to receive fifty
percent (50%) or more of the profits by contract or otherwise, or in countries
where control of fifty percent (50%) or more of such rights is not permitted in
the country where such entity exists, the maximum permitted in such
country.




B.           “Effective Date” means
the date set forth on page 1, line 1, of this Agreement.




C.           “Field” means all Gene
Therapy applications.




D.           “Gene Therapy” means
the introduction of nucleic acid into a person with the purpose of modifying the
functions or behaviors of cells of the human body, either by ex vivointroduction of
nucleic acid into cells, which cells are later introduced into such person’s
body, or by in vivointroduction of nucleic
acid into the person’s body, to be incorporated into cells of such person
(nucleic acid being any composition of matter that includes two or more
covalently joined nucleotides and/or variants thereof, including, without
limitation, variants of the phosphate, ribose sugar and/or heterocyclic base
portions thereof, provided that such nucleotides and variants comprise a
substantial component of such composition of matter).













E.           “Joint Agreement”
shall mean that certain License Agreement entered by DFCI, ARCH and Licensee
effective of even date herewith.




F.           “Licensed Patents”
means the United States patent applications listed on Schedule A, attached
hereto; United States patents issued from the applications listed on Schedule A
and from divisionals and continuations of these applications and any reissues,
renewals, substitutions, or extensions of such United States patents or patent
applications; claims of continuation-in-part applications and patents directed
to subject matter specifically described in the patent applications listed on
Schedule A; and claims of all foreign patent applications, patents, and other
intellectual property which are directed to subject matter specifically
described in the United States patent applications listed on Schedule
A.  Licensed Patents shall not include any applications and any
patents issuing from applications filed in countries (i) that Licensee elected
not to file in pursuant to Paragraph 4.A. and (ii) where Licensee’s rights are
terminated under Paragraph 4.D.




G.           “Licensed Product”
means any product within the scope of any Valid Claim, or a product made by a
process, method or technique within the scope of any Valid Claim, or a product,
the method of use of which is within the scope of any Valid Claim.




H.           “Net Sales”
means:




(1)           the
gross amounts received by Licensee and its Affiliates and Sublicensees for
Licensed Products, less the following amounts directly chargeable to such
Licensed Products:  (a) customary trade, quantity or cash discounts
and rebates, actually allowed and taken; (b) amounts repaid or credited to
customers on account of rejections; (c) freight and other transportation
costs, including insurance charges, and duties, tariffs, sales and excise taxes
and other governmental charges based directly on sales, turnover or delivery of
such Licensed Products and actually paid or allowed by Licensee and its
Affiliates or any Sublicensee; and (d) amounts allowed or credited due to
returns or uncollectible amounts.  If Licensee or a Sublicensee or the
Affiliates of either of them do not sell Licensed Products but use Licensed
Products as part of selling a service or other means of deriving commercial
benefit from a Licensed Product, the parties agree to negotiate in good faith to
determine a method of calculating a running royalty equivalent to the running
royalty set out in this Agreement on Net Sales.  Net Sales shall be
calculated on sales to independent third parties and not on sales between
Licensee and its Affiliates or Sublicenses unless such a purchaser is the
end-user of the Licensed Product.  For Licensed Products consumed by
Licensee, its Affiliates or any Sublicensee, the price used to calculate Net
Sales shall be equal to the average of the sales price of the same or
substantially similar Licensed Products, whichever is relevant, sold to its
three largest customers during the same time period.




(2)           with
respect to any Licensed Product sold in combination with one or more active
therapeutic ingredient(s), or devices) for the administration of the Licensed
Product, in each case, which are not Licensed Products, Net Sales for such
combination products shall be calculated by multiplying the Net Sales calculated
pursuant to Paragraph H(1) above by the fraction A/(A + B), where A is the gross
selling price of the Licensed Product sold separately and B is the gross selling
price of the other product(s) or active therapeutic ingredient(s) or agent(s)
sold separately.  In the event that no such separate sales are made by
Licensee, Net Sales for royalty determination shall be as reasonably allocated
by Licensee and ARCH, as agreed by the parties, between such Licensed Product
and such other product(s), ingredient(s) and/or agent(s) based upon their
relative importance and proprietary protection.













I.           “Royalties” means all
amounts payable under Paragraph 3. B. of this Agreement.




J.           “Sublicensee” means
any person, company or other entity granted a sublicense by Licensee under
Paragraph 2. B. below, including Affiliates of the Sublicensee.




K.           “Sublicense” means the
license agreement entered into by Licensee with a Sublicensee under Paragraph 2.
B. below.




L.           “Territory” means
worldwide.




M.           “University” means the
University of Chicago.




N.           “Valid Claim” means an
issued claim of any unexpired patent or a claim of any pending patent
application within the Licensed Patents which has not been held unenforceable,
unpatentable or invalid by a decision of a court or governmental body of
competent jurisdiction, in a ruling that is unappealable or unappealed within
the time allowed for appeal which has not been rendered unenforceable through
disclaimer or otherwise, and which has not been lost through an interference
proceeding.  Notwithstanding the foregoing, a claim of a pending
patent application shall cease to be a Valid Claim if no patent has issued
on such claim on or prior to the seventh anniversary of the date of filing of
the corresponding parent patent application, provided that such claim shall once
again become a Valid Claim on the issue date of a patent that subsequently
issues and contains such claim.




2.           GRANT OF LICENSE AND
RESERVATION OF RESEARCH RIGHTS




A.           Grant.  Licensor
hereby grants to Licensee and its Affiliates an exclusive, worldwide license
under the Licensed Patents to make, have made, use, import, have imported, offer
to sell and sell Licensed Products within the Field and within the
Territory.




B.           Sublicense.




(1)           Licensee
shall have the exclusive right to grant sublicenses to third parties to the
rights granted Licensee under Paragraph 2.A on terms not in conflict with the
terms of this Agreement.  ARCH shall be informed by written notice of
the identity of any prospective Sublicensee and shall have the right to approve
of said Sublicensee, which approval shall not be unreasonably
withheld.  If ARCH does not object in writing within forty-five (45)
days of said written notice, approval shall be presumed conclusively to have
been given.  Notwithstanding the foregoing GenVec may grant a
sublicense to any of the top 100 pharmaceutical and/or biopharmaceutical
companies as reported by Scrip, without the
prior approval of ARCH.













(2)           GenVec
agrees that any sublicenses granted by it or its Sublicensees shall provide that
the obligations to ARCH contained in this Agreement to the extent applicable
shall be binding upon the Sublicensee.  GenVec further agrees to
provide a copy of this Agreement (which may be redacted to remove financial and
other competitive information) to each Sublicensee.




(3)           GenVec
agrees to forward to ARCH a copy of any and all fully executed sublicense
agreements with financial terms redacted, and further agrees to forward to ARCH
annually a copy of such reports received by GenVec from its Sublicensee during
the preceding twelve (12) month period under the sublicenses as shall be
pertinent to a royalty accounting under said sublicense agreements.




(4)           All
sublicenses shall provide that the Sublicensee may not grant further sublicenses
to third parties, without the written consent of ARCH, which consent shall not
be unreasonably withheld; provided, that Sublicensees may grant further
sublicenses without the prior consent of ARCH (i) to their Affiliates, and (ii)
in connection with the development and/or commercialization of Licensed
Products.




(5)           GenVec
hereby agrees that every sublicensing agreement to which it is a party and which
relates to the rights, privileges and license granted hereunder shall contain a
statement setting forth the date upon which GenVec’s exclusive rights,
privileges and license hereunder shall terminate.




C.           Reservationof
Rights.  ARCH reserves for itself and for the University the
non-transferable right to practice at the University the inventions claimed in
the Licensed Patents to make, have made, and use Licensed Products within the
Field for all educational and non-commercial research purposes it may choose, in
its own discretion, and without any payment therefore.  The inventions
claimed in the Licensed Patents were made with the use of funds from the United
States government and the Howard Hughes Medical
Institute (“HHMI”).  Therefore, to the extent required by United
States law, there is reserved from the rights granted hereunder the worldwide,
non-exclusive right of the United States government to use and to practice or
have practiced the inventions claimed in the Licensed Patents.  ARCH
and/or the University, has granted, or will grant, HEM a paid-up, non-exclusive,
irrevocable license to use the Licensed Products for its non-commercial
purposes, but with no right to sublicense.




D.           U.S.
Laws.  The inventions claimed in the Licensed Patents were
developed with the use of United States government funds.  Therefore,
any right granted in this Agreement greater than that permitted under Public Law
96-517 or Public Law 98-620 shall be subject to modification as may be required
to conform to the provisions of those laws.




E.           Supercession.  This
Agreement supersedes the Agreement effective May 26, 1993 by and between
ARCH and Licensee, which is hereby terminated and of no further force or
effect.













3.           Royalties and Other
Payments




A.           License
Payment.




(1)           Subject
to reduction pursuant to subsection 3.A (2) below, Licensee agrees to make the
following payments to ARCH within forty-five (45) days after the occurrence of
each of the following events:




(1)           $*
at the time of the filing in the United States by Licensee or any Sublicensee of
an IND for the first Licensed Product (such payment referred to as an “IND
Fee”); and




(2)           $*
at the time of filing in the United States by Licensee or any Sublicensee of an
NDA on a Licensed Product (such payment referred to as an “NDA
Fee”).




Each
payment pursuant to this Paragraph 3.A.(1) may be credited against any Royalties
due under Paragraph 3.B. on the sale of the Licensed Product with respect to
which such payment is made (or if the development of a particular Licensed
Product is terminated, a successor Licensed Product thereto) in amounts not to
exceed * of the Royalties otherwise due each calendar quarter.  Any
such amount not credited against Royalties in any quarter may be carried forward
until the credit is fully applied.  It is understood and agreed that
any amounts paid under Section 3.A(1) of the Joint Agreement shall be fully
creditable against any amounts due to ARCH pursuant to this Section
3.A(1).




(2)           If
in Licensee’s judgment, based on reasonable legal or commercial considerations,
it is desirable for Licensee or any Affiliateor Sublicensee to enter
into a licensing agreement (each, a “Third Party Licensing Agreement”) pursuant
to which Licensee or the applicable Affiliate or Sublicensee must also pay to
the third party licensor an IND Fee and/or an NDA Fee in connection with a
Licensed Product, then, at such time as an IND Fee or NDA Fee shall become
payable, Licensee shall allocate the IND Fee or NDA Fee (as the case may be)
payable under this Agreement equally among ARCH and any third party
licensors (up to a maximum of two additional third party
licensors).




B.           Royalties.




(1)           Subject
to reduction pursuant to subsection 3.B(2), and subject to subsections 3.B(3),
(4) and (5) below, Licensee shall pay a royalty to ARCH during the term of this
Agreement equal to * of Net Sales by Licensee or any Affiliate or Sublicensee of
Licensed Products within the scope of a Valid Claim in the country of
manufacture or sale.




(2)           In
the event that Licensee enters into a license agreement with any third party
with respect to intellectual property rights which are necessary or useful for
Licensee’s practice of the Licensed Patents or the manufacture, use, import
and/or sale of any Licensed Product, Licensee may offset any payments made in
accordance with such license agreements against any amounts owed Licensor
pursuant to Paragraph 3B herein, on a country-by-country basis, up to a maximum
of * of the amounts due under Paragraph 3B.  Any such amounts which
are not offset in any quarter may be carried forward until applied.













(3)           No
Royalties shall be due on Licensed Products distributed for use at cost or less
in research and/or development, in clinical trials or as promotional
samples.




(4)           No
more than one Royalty payment shall be due with respect to a sale of a
particular Licensed Product.  No multiple Royalties shall be payable
because any Licensed Product, or its manufacture, sale or use is covered by more
than one Valid Claim.  It is understood and agreed that Licensee’s
total Royalty obligation under this Agreement and the Joint Agreement shall not
exceed a cumulative total of * of Net Sales (as defined in such Agreements), and
that any Royalties paid under the Joint Agreement shall be fully creditable
against any royalties due to ARCH under this Agreement.




(5)           Royalties
due under this Paragraph 3.B shall be payable on a country-by-country and
Licensed Product-by-Licensed Product basis until the expiration of the
last-to-expire issued Valid Claim covering such Licensed Product in such
country, or if no such patent has issued in a country, until there are no
remaining pending Valid Claims covering such Licensed Product in such
country.




C.           Appointment of
Agent.  Licensor hereby represents to Licensee that pursuant to
a patent management agreement between ARCH and DFCI dated as of December 1, 1990
(the “Management Agreement”), DFCI appointed ARCH as the agent of DFCI to
collect and account for all Royalties and other amounts paid to Licensor
pursuant to licensing agreement(s) for the Licensed
Patents.  Therefore, Licensor hereby directs Licensee, and Licensee
hereby agrees, that all payments to be made by Licensee to Licensor under this
Agreement and the Joint Agreement shall be paid to ARCH on behalf of the
Licensor (and/or DFCI) at ARCH’s principal place of business, or at such other
place and in such other way as ARCH may designate, without deduction of
exchange, collection or other charges.  ARCH agrees to notify Licensee
in writing within thirty (30) days of the termination of the Management
Agreement if such termination occurs during the term of this
Agreement.




D.           Calculation of
Royalties.  Royalties shall be payable in U.S. currency within
* days after the end of each calendar quarter for the term specified in
Paragraph 9. A. below, beginning with the calendar quarter in which
the first commercial sale of a Licensed Product occurs.  Each payment
shall be accompanied by a statement showing Net Sales for each country in the
Territory and calculation of the Royalties due.  All such statements
shall be deemed to be Confidential Information of Licensee.  There
shall be deducted from all such payments taxes required to be withheld by any
governmental authority and Licensee shall provide copies of receipts for
such taxes to ARCH along with each royalty payment.  Any
necessary conversion of currency into United States dollars shall be at the
applicable rate of exchange for buying U.S. dollars of Citibank, N.A., in New
York, New York, on the last day of the calendar quarter in which such
transaction occurred.  If at any time legal restrictions prevent the
prompt remittance of any Royalties owed on Net Sales in any jurisdiction,
Licensee may notify Licensor and make such payments by depositing the amount
thereof in local currency in a bank account or other depository in such country
in the name of Licensor, and Licensee shall have no further obligations under
this Agreement with respect thereto.













E.           Records.  Licensee
shall keep, and shall cause its Affiliates and Sublicensees of either, to keep,
full and accurate books and records in sufficient detail so that sums due
Licensor hereunder can be properly calculated.  Such books and records
shall be maintained for at least three (3) years after the Royalty reporting
period(s) to which they relate.  During the term hereof and for three
(3) calendar years thereafter, Licensee shall permit, and shall cause its
Affiliates to permit, and use reasonable efforts to have its Sublicensees permit
certified independent accountants designated by ARCH, to whom Licensee has no
reasonable objection, to examine its books and records solely for the purpose of
verifying the accuracy of the written statements submitted by Licensee and sums
paid or payable.  ARCH may conduct such examination no more than once
in any calendar year and conduct no more than one audit of any
period.  After completion of any such examination, ARCH shall promptly
notify Licensee in writing of any proposed modification to Licensee’s statement
of sums due and payable.  If Licensee accepts such modification,
or if the parties agree on other modifications, one party shall promptly pay or
credit the other in accordance with such resolution.  Such examination
shall be made at the expense of ARCH, except that if such examination discloses
a discrepancy of ten percent (10%) or more in the amount of Royalties and other
payments due ARCH, then Licensee shall reimburse ARCH for the cost of such
examination.




F.           Overdue
Payments.  Payments due to ARCH under this Agreement shall, if
not paid when due under the terms of this Agreement, bear simple interest at the
lower of the prime rate of interest (as published by Citibank, N.A. on the date
such payment is due) plus * or the highest rate permitted by law, calculated on
the basis of a 360 day year for the number of days actually elapsed, beginning
on the due date and ending on the day prior to the day on which payment is made
in full.  Interest accruing under this Paragraph shall be due to
Licensor on demand or upon payment of past due amounts, whichever is
sooner.  The accrual or receipt by ARCH of interest under this
Paragraph shall not constitute a waiver by Licensor of any right it may
otherwise have to declare a default under this Agreement or to terminate this
Agreement.




4.           Prosecution and Maintenance
of Patents; Patent Costs.




A.           Prosecution and
Maintenance.




(1)           ARCH
shall be responsible, using any of the following patent counsel, that are
acceptable to Licensee:  Arnold, White & Durkee; Dressler, Rocky,
Milnamow & Katz, Ltd.; Marshall, O’Toole, Gerstein, Murray, & Borum; or
Foley & Lardner for the filing, preparation, registration, prosecution and
maintenance of the Licensed Patents.  Licensee shall select patent
counsel from the above list, or such other counsel as the parties agree, as
patent counsel for maintenance of all patent applications and patents within the
Licensed Patents.




(2)           ARCH
shall cause such patent counsel to provide Licensee with a list of the countries
in which ARCH has filed and/or intends to file applications.  Such
list shall be provided to Licensee at least ninety (90) days prior to the
expiration of the corresponding United States priority date to allow Licensee to
suggest that additional countries be added to the list or that one or more
countries be deleted from the list.  ARCH agrees to timely file
applications in each of the countries requested by Licensee unless it otherwise
notifies Licensee under Paragraph 4.B below.













(3)           Licensee
agrees to cooperate, and agrees to cause its Sublicensees and Affiliates of
either to cooperate, with ARCH in the preparation, filing, prosecution and
maintenance of the Licensed Patents by disclosing such information as may be
necessary for the same and by promptly executing such documents as ARCH may
reasonably request in connection therewith.  Licensee and its
Sublicensees and Affiliates of either shall bear their own costs in connection
with their cooperation with ARCH under this Paragraph.




(4)           ARCH
will provide Licensee copies of all material documents received or prepared by
ARCH in the prosecution and maintenance of the Licensed
Patents.  Licensee shall have reasonable opportunities to advise ARCH
concerning, and ARCH shall cooperate with Licensee with respect to, filing,
registration, prosecution and maintenance of all patents and patent applications
within the Licensed Patents.  “Reasonable opportunities” shall mean
that Licensee shall receive from ARCH or its patent counsel copies of all
documents and materials relating to filing, registration, prosecution and
maintenance of patent applications and patents within the Licensed Patents as
soon as is reasonably practical after ARCH has received such documents and
materials, and at least forty-five (45) days or the maximum time provided by the
Patent Office before any date imposed upon ARCH for action or response with
respect to such patent applications and patents.  ARCH agrees to use
its best efforts to incorporate into the final version of such documents and
materials any reasonable change(s) and/or claims (s) requested by Licensee
thereof prior to submission to the applicable government agencies or other
parties.  In addition, to avoid any prejudice and added unnecessary
costs to Licensee, ARCH shall adhere to the applicable deadlines, and Licensee
shall not be responsible for the costs of any time extensions for reasons
that are not approved in advance by Licensee.




B.           Licensee’s Rights to Prosecute and
Maintain Patents.  ARCH shall notify Licensee in writing of any
country(ies) where it either previously declared its intention to file under
Paragraph 4.A. and subsequently decided not to file in such country(ies) or
previously filed and decided to abandon the patent application or issued
patent.  Such notice shall be given so as to allow Licensee a
reasonable time, but not less than ninety (90) days, within which to file in
countries where ARCH does not intend to file a patent application or is not
going to continue the prosecution or maintenance of the application or patent,
whichever is relevant.  In all cases where Licensee elects to file,
Licensee shall file, prosecute and maintain the applications and patents in
ARCH’s name and at Licensee’s expense.  Such applications and patents
shall be included in the definition of Licensed Patents for all purposes of this
Agreement.













C.           Patent
Costs.  Licensee agrees to pay all necessary and reasonable
third party fees and out-of-pocket expenses incurred by ARCH in obtaining and
maintaining the Licensed Patents, including those incurred by ARCH pursuant to
the terms of the Agreement effective May 26, 1993 by and between ARCH, DFCI and
Licensee.  Payment for fees and expenses incurred after the date of
this Agreement shall be invoiced to Licensee on a monthly basis and Licensee
agrees to pay such invoices within thirty (30) days of receipt.  Licensee
also agrees upon reasonable request by ARCH to make timely reasonable estimated
advanced payments for the filing of national applications in countries selected
by Licensee; provided, that Licensor provides Licensee with invoices for such
amounts at least thirty (30) days prior to the date payment must be made by ARCH
to a third party.  Documentation received from the third party vendors
to support the amounts invoiced, in a form reasonably acceptable to Licensee,
shall be included with each invoice.  Licensee shall raise any
objections to such amounts invoiced within the thirty (30) day time period for
payment.  Invoices for advanced payments shall be reconciled with the
advance payments made by Licensee every six (6) months.  Any excess
payment by Licensee shall be credited to future patent costs specified in
this Paragraph 4.C.




D.           Failure to Pay Patent
Costs.  If Licensee declines or fails to make advance payments
or pay or reimburse ARCH for any material portion of any reasonable patent fees
and expenses (including maintenance fees) as required by Paragraph 4.C. for any
application or patent, Licensee’s rights with respect to the applicable
applications and patents shall terminate effective sixty (60) days after written
notice from ARCH requesting such payment, unless payment in full is made
within such time; provided, if Licensee disputes that any portion of such fees
are reasonable, it may provide notice to ARCH that it wishes to have such
dispute settled by arbitration pursuant to Paragraph 10, and in such event ARCH
may not terminate Licensee’s rights with respect to the applicable applications
and patents until and unless the arbitrator determines that such fees and
expenses were reasonable, in which case Licensee shall pay the unpaid fees and
expenses (with interest from the date due) in full within ten days from the date
of the arbitrator’s final written determination that such fees and expenses were
reasonable and also pay the arbitrators fees incurred in connection with the
arbitration.  Such notice can be sent by ARCH at any time after the
expiration of the thirty (30) days provided in Paragraph 4.C. for payment of
invoices or in the case of advance payments, any time after the date five (5)
business days before payment must be made by ARCH to a third party.




5.           Due Diligence and
Milestones.




A.           Diligence and Development
Expenditures.  Licensee or its Sublicensees shall use
commercially reasonable diligent efforts to develop and commercialize Licensed
Products.  Through September 30, 2000, “commercially reasonable
diligent efforts” shall automatically be deemed to have been met if Licensee
achieves the following milestones:




Event
            
            DateObtain
      rights to TNFalpha or alternative therapeutic gene designated by Licensee
      for use in conjunction with one or more of the Licensed Patents
      (“Milestone 1”).
            
            3/31/99File
      IND for a Licensed Product (“Milestone 2”).
            
            Within
      24 months of the Effective Date; provided, however, Licensee need not
      accomplish Milestone 2 if it has expended at least $* on the development
      of Licensed Product(s) as of 24 months after the Effective
      Date.













The
foregoing milestones may be satisfied by Licensee and/or its Affiliates or
Sublicensees.




B.           Progress
Report.  Within thirty (30) days of the end of each June 30 and
January 31 during the term of this Agreement, Licensee shall make a written
report to ARCH, in such detail as ARCH may reasonably request, covering the
preceding six months and describing the progress of Licensee toward achieving
the development and commercialization of Licensed Products.  Licensee
agrees to immediately notify ARCH in writing when commercial products are first
sold and when Licensee’s obligation to begin making running Royalty payments
begins.  When Licensee begins making running Royalty payments, the six
month reports required by this Paragraph shall be reduced to a yearly report due
by January 31 of each year, covering the preceding year’s commercialization
efforts.




6.           Warranties; Disclaimer,
Indemnification, Insurance.




A.           ARCH.  ARCH
represents and warrants that:  (i) it is the sole and exclusive owner
of all right, title and interest in the Licensed Patents; (ii) it has the right
to grant the rights and licenses granted herein, and the Licensed Patents are
free and clear of any lien, encumbrance, security interest or restriction on
license; (iii) it has not previously granted, and will not grant during the term
of this Agreement (with the exception of the Regulon Option of March 15, 1993,
which has since expired), any right, license or interest in and to the Licensed
Patents, or any portion thereof, inconsistent with the license granted to
Licensee herein; and (iv) there are no threatened or pending actions,
suits, investigations, claims or proceedings in any way relating to the Licensed
Patents.




B.           Disclaimer of
Warranties.  Except as expressly provided above, Licensor make
no representations or warranties of any kind, express or implied, with respect
to the invention(s) claimed in the Licensed Patents or with respect to the
Licensed Patents themselves, including but not limited to, any representations
or warranties about (i) the validity, scope or enforceability of any of the
Licensed Patents; (ii) the accuracy, safety or usefulness for any purpose of any
information provided by Licensor to Licensee, its Sublicensees or Affiliates of
either, with respect to the invention(s) claimed in the Licensed Patents or with
respect to the Licensed Patents themselves and any products developed from or
covered by them; (iii) whether the practice of any claim contained in any of the
Licensed Patents will or might infringe a patent or other intellectual property
right owned or licensed by a third party; (iv) the patentability of any
invention claimed in the Licensed Patents; or (v) the accuracy, safety, or
usefulness for any purpose of any product or process made or carried out in
accordance with or through the use of the Licensed Patents.













C.           Indemnification.  Licensee
agrees, and agrees to cause its Sublicensees and Affiliates of either, to
indemnify, defend and hold harmless Licensor, its Affiliates and all trustees,
directors, officers, employees, fellows and agents of any of the foregoing
(including Licensor and its Affiliates, each an “Indemnified Person”) from and
against any and all third party claims, demands, loss, damage, penalty, cost or
expense (including attorneys’ and witnesses’ fees and costs) of any kind or
nature, arising from the development, production, use, sale or other disposition
of Licensed Products and all activities associated therewith by Licensee, its
Sublicensees or Affiliates of either, or any use by Licensee and its Sublicensee
or Affiliates of information provided by Licensor to
Licensee.  Licensee agrees and agrees to use reasonable efforts to
cause each of its Sublicensees and Affiliates of either to agree not to sue
any Indemnified Person in connection with the development, production, use, sale
or other disposition of Licensed Product and all activities associated
therewith, except if the Indemnified Person has breached this Agreement.
 Licensor shall be entitled to participate, at its option and expense,
through counsel of its own selection, and may join in any legal actions related
to any such third party claims, demands, losses, damages, costs, expenses and
penalties.  Licensee, its Sublicensees and Affiliates of either, shall
not enter into any settlement affecting any rights or obligations of any
Indemnified Person or which includes an express or implied admission of
liability, negligence or wrongdoing by any Indemnified Person, without the prior
written consent of such Indemnified Person, which consent shall not be
unreasonably withheld.




Licensee
agrees, and agrees to cause its Sublicensees and Affiliates of either to
indemnify, defend by counsel acceptable to HH1VII, and hold harmless the Howard
Hughes Medical Institute, and its trustees, officers, employees, and agents
(collectively, “HHMI Indemnified Persons”), from and against any claim,
liability, cost, expense, damage, deficiency, loss, or obligation, of any kind
or nature (including, without limitation, reasonable attorney’s fees and other
costs and expenses of defense) (collectively, “Claims”), based upon, arising out
of, or otherwise relating to this License Agreement, including without
limitation, any cause of action relating to product liability.  The
previous sentence will not apply to any Claim that is determined with finality
by a court of competent jurisdiction to result solely from the gross negligence
or willful misconduct of an HHMI Indemnified Person.  In addition,
Licensee and its Sublicensees and Affiliates agree not to settle any Claim
against an HHMI Indemnified Person without HHMI’s written consent, where (a)
such settlement would include any admission of liability on the part of any HHMI
Indemnified Person, (b) such settlement would impose any restriction on any HHMI
Indemnified Person’s conduct of any of its activities, or (c) such settlement
would not include an unconditional release of all HHMI Indemnified Persons from
all liability for claims that are the subject matter of the settled
Claim.




D.           Assumption of
Risk.  The entire risk as to the performance, safety and
efficacy of any invention claimed in the Licensed Patents practiced by Licensee
or its Affiliates or Sublicensees or of any Licensed Product made by Licensee or
its Affiliates or Sublicensees is assumed by Licensee, its Sublicensees and
Affiliates of either, provided that such assumption of the risk shall not apply
to the intentional misconduct or gross negligence by Indemnified
Persons.  Indemnified Persons shall not, except for their intentional
misconduct or gross negligence, be responsible or liable for any injury, loss,
or damage of any kind, including but not limited to direct, indirect, special,
incidental or consequential damages or lost profits to Licensee, any
Sublicensee, Affiliates of either or customers or any of the foregoing, or for
any such injury, loss or damage to any other individual or entity, regardless of
legal theory based on the development, manufacture, use, sale or other
disposition of Licensed Products and all activities associated
therewith.  The above limitations on liability apply even though the
Indemnified Person may have been advised of the possibility of such injury, loss
or damage.  Licensee shall not, and shall require all Sublicensees and
Affiliates of either to not, make any agreements, statements, representations or
warranties or accept any liabilities or responsibilities whatsoever with regard
to any person or entity which are inconsistent with this Paragraph.













E.           Insurance.  At
such time as any product, process or service relating to, or developed pursuant
to this Agreement is being commercially distributed or sold (other than for the
purpose of obtaining regulatory approvals) by Licensee or by a Sublicensee or
agent of Licensee, Licensee shall, at its sole cost and expense, procure and
maintain policies of comprehensive general liability insurance in amounts not
less than $2,000,000 per incident and $2,000,000 annual aggregate and naming the
Indemnified Persons, including HHMI Indemnified Persons, as additional
insureds.  Such comprehensive general liability insurance shall
provide (a) product liability coverage, and (b) broad form contractual
liability coverage for Licensee’s indemnification under Paragraph 6.C. of this
Agreement.  If Licensee elects to self-insure all or part of the
limits described above (including deductibles or retentions which are in excess
of $250,000 annual aggregate), such self-insurance program must be reasonably
acceptable to the Licensor and DFCI’s associated Risk Management
Foundation.  The minimum amounts of insurance coverage required under
these provisions shall not be construed to create a limit of Licensee’s
liability with respect to its indemnification obligation under Paragraph 6.C. of
this Agreement.  Licensee shall provide Licensor with written evidence
of such insurance upon written request.  Licensee shall provide the
Licensor with written notice at least fifteen (15) days prior to the
cancellation, non-renewal or material reduction in the extent of such insurance;
if Licensee does not obtain replacement insurance providing comparable coverage
within such fifteen (15) day period, Licensors shall have the right to terminate
this Agreement effective at the end of such fifteen (15) day period without
any notice or additional waiting periods.  Licensee shall maintain
such comprehensive general liability insurance beyond the expiration or
termination of this Agreement during (i) the period that any product, process,
or service, relating to, or developed pursuant to, this Agreement is being
commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Licensee or by a Sublicensee or agent of Licensee, and
(ii) a reasonable period after the period referred to in (i) above which in no
event shall be less than fifteen (15) years.




7.           Confidentiality.




A.           Confidentiality,
Publications and Data Access.  All information submitted by one
party to the other concerning the invention(s) claimed in the Licensed Patents
and Licensed Products identified as confidential at the time of disclosure shall
be considered as confidential (“Confidential Information”) and shall be utilized
only pursuant to the licenses granted hereunder.  Subject to Paragraph
7(d) below, during the term of this Agreement and for a period of ten (10) years
thereafter, neither party shall disclose to any third party any Confidential
Information received from the other party without the specific written consent
of such party.  The foregoing shall not apply where such Information
a) was or becomes public through no fault of the receiving party, b) was, at the
time of receipt, already in the possession of receiving party as evidenced by
its prior written records, c) was obtained from a third party legally entitled
to use and disclose the same, d) is independently developed by the receiving
party without use of any Confidential Information of the disclosing party, or e)
is required by law to be disclosed to a court or governmental
agency.













B.           Permitted Use and
Disclosures.  Notwithstanding Paragraph 7.A above, each party
hereto may use or disclose information disclosed to it by the other party to the
extent such use or disclosure is reasonably necessary in filing or prosecuting
patent applications, prosecuting or defending litigation, complying with
applicable governmental regulations or otherwise submitting information to tax
or other governmental authorities, conducting clinical trials, or making a
permitted sublicense or otherwise exercising its rights hereunder, provided that
if a party is required to make any such disclosure of another party’s
confidential information, other than pursuant to a confidentiality agreement, it
will give reasonable advance notice to the latter party of such disclosure and,
save to the extent inappropriate in the case of patent applications, will use
its best efforts to secure confidential treatment of such information prior to
its disclosure (whether through protective orders or otherwise).




C.           Confidential
Terms.  Except as expressly provided herein, each party agrees
not to disclose any terms of this Agreement to any third party without the
consent of the other parry; provided, disclosures may be made as required by
securities or other applicable laws, or to actual or prospective investors or
corporate partners, or to a party’s accountants, attorneys and other
professional advisors.




D.           Publications.  Licensor
shall provide to Licensee copies of any proposed written publication by Licensor
containing any Confidential Information and, to the extent Licensor is aware of
them, proposed publications containing any information relating to the Licensed
Patents.  Licensee agrees to use reasonable efforts to provide copies
of any proposed written publication containing any information relating to the
Licensed Patents of Licensee, its Sublicensees and Affiliates of either of them
to Licensor.  The parties shall provide copies of such proposed
written publications at least thirty(30) days in advance of
publication.  In addition, the topic and contents of any proposed oral
disclosures regarding the Licensed Patents which will be made to third persons
by Licensor shall be disclosed in writing to Licensee at least thirty (30) days
prior to any proposed oral presentation.  The receiving party
may object to such proposed publication or disclosure within thirty (30)
days of receipt of the publication or disclosure on the grounds that (i) it
contains patentable subject matter that needs patent protection or (ii) that the
publication contains Confidential Information of the objecting
party.  At the request of the objecting party, Confidential
Information of such party shall be deleted from the publication or oral
disclosure.  If the objecting party decides to seek patent protection,
the proposed publication or disclosure shall be delayed for up to a period of
thirty (30) additional days to permit the preparation and filing of appropriate
patent applications.




8.           Infringement.  In
the event of an infringement of a Licensed Patent the following shall
apply:




A.           Notice.  Each
party shall give the others written notice if one of them becomes aware of any
infringement by a third party of any Licensed Patent.  Upon notice of
any such infringement, the parties shall promptly consult with one another with
a view toward reaching agreement on a course of action to be
pursued.













B.           Licensee’s Right to Bring
Infringement Action.




(1)           If
a third party infringes any patent included in the Licensed Patents within the
Field, Licensee shall have the first right, but not the obligation, to institute
and prosecute an action or proceeding to abate such infringement and to resolve
such matter by settlement or otherwise.  Licensee agrees to notify
ARCH of its intention to bring an action or proceeding prior to filing the same
(or responding to any declaratory judgment action) and in sufficient time to
allow ARCH the opportunity to discuss with Licensee the choice of counsel for
such matter.  Licensee agrees to hire counsel reasonably acceptable to
ARCH.  Licensee shall keep ARCH timely informed of material
developments in the prosecution or settlement of such action or
proceeding.  Licensee shall be responsible for all costs and expenses
of any action or proceeding against infringers which Licensee
initiates.  Licensor shall cooperate fully in such action,
including without limitation, by joining as a party plaintiff if required to do
so by law to maintain such action or proceeding, and by executing and making
available such documents as Licensee may reasonably request.  Licensee
agrees to promptly reimburse Licensor for its reasonable third party
out-of-pocket fees and expenses incurred in joining an action or proceeding or
cooperating with Licensee.  Licensor may be represented by counsel in
any such legal proceedings, at Licensor’s own expense, acting in an advisory but
not controlling capacity.




(2)           The
prosecution, settlement, or abandonment of any action or proceeding under
Paragraph 8.B.(1) shall be at Licensee’s reasonable discretion provided that
Licensee shall not have any right to surrender any of Licensor’s rights to the
Licensed Patents.




(3)           Except
as provided herein, all amounts of every kind and nature recovered from an
action or proceeding of infringement by Licensee shall belong to
Licensee.  After deduction of the fees and expenses of both parties to
this Agreement, any remaining amounts recovered shall be considered Net Sales
under this Agreement and subject to Royalty payments in accordance with
Paragraph 3.B.




C.           Licensor’s Right to Bring
Infringement Action.  If a third party infringes any patent
included in the Licensed Patents within the Field, and Licensor wish to initiate
a legal proceeding against such infringement, Licensor shall first notify
Licensee in writing and may request that Licensee bring an action or proceeding
against the infringing third party; provided, within sixty (60) days of
receiving such notice Licensee’s patent counsel shall notify ARCH of Licensee’s
plans for abating such infringement.  If Licensee declines or fails to
bring such an action or proceeding within one hundred and eighty (180) days of
receipt of the notice, Licensor shall have the right, at its discretion, to
institute and prosecute an action or proceeding to abate such infringement and
to resolve such matter by settlement or otherwise.  Licensee shall
cooperate fully by joining as a party plaintiff if required to do so by law to
maintain such action and by executing and making available such documents as
Licensor may reasonably request.  Except as specifically provided in
this Paragraph, Licensor shall have the right to retain all amounts recovered of
every kind and nature.  Amounts recovered by Licensor shall not be
considered Net Sales under this Agreement and shall not give rise to royalty
payments under Paragraph 3.













9.           Termination.




A.           Term.  Unless
terminated earlier, this Agreement shall expire on the expiration date of the
last to expire of the Licensed Patents.  The term of this Agreement
shall commence on the Effective Date, and unless earlier terminated as provided
herein, shall continue in full force and effect on a country-by-country and
Licensed Product-by-Licensed Product basis until there are no remaining royalty
payment obligations in a country, at which time the Agreement shall expire in
its entirety in such country.




B.           ARCH’s Right to
Terminate.  ARCH shall have the right to terminate this
Agreement as follows, in addition to all other available remedies:




(1)           Subject
to Paragraph 9.C, if Licensee fails to make any royalty or other payment when
due, this Agreement shall terminate effective thirty (30) days after ARCH’s
written notice to Licensee to such effect, unless Licensee makes such payment
within such thirty (30) days.




(2)           Subject
to Paragraph 9.C, if Licensee fails to observe any other material obligation of
this Agreement, this Agreement shall terminate effective ninety (90) days after
ARCH’s written notice to Licensee describing such failure, unless Licensee cures
such failure within such ninety (90) days.




(3)           If
Licensee shall have filed by or against it a petition under any bankruptcy or
insolvency law and such petition is not dismissed within sixty (60) days of its
filing, or if Licensee makes an assignment of all or substantially all of its
assets for the benefit of its creditors Licensor may terminate this Agreement by
written notice effective as of the (i) date of filing by Licensee of any such
petition, (ii) date of any such assignment to creditors, or (iii) end of
the sixty (60) days if a petition is filed against it and not dismissed by such
time, whichever is applicable.




(4)           If
Licensee shall be dissolved, liquidated or otherwise ceases to exist due to
insolvency, other than for reasons specified in Paragraph 9. B( 3) above, this
Agreement shall automatically terminate as of (i) the date articles of
dissolution or a similar document is filed on behalf of Licensee with the
appropriate government authority, or (ii) the date of establishment of a
liquidating trust or other arrangement for the winding up of the affairs of
Licensee.




C.           Termination for
Cause.  If any party materially breaches this Agreement, the
Licensee, if Licensor is the breaching party, or ARCH, if Licensee is the
breaching party, may elect to give the breaching party written notice describing
the alleged breach.  If the breaching party has not cured such breach
within sixty (60) days after receipt of such notice, the notifying party will be
entitled, in addition to any other rights it may have under this Agreement, to
terminate this Agreement effective immediately; provided, however, if either
party receives notification from the other of a material breach and if the party
alleged to be in default notifies the other party in writing within thirty (30)
days of receipt of such default notice that it disputes the asserted default,
the matter will be submitted to arbitration as provided in Article 10 of this
Agreement.  In such event, the nonbreaching party shall not have the
right to terminate this Agreement until it has been determined in such
arbitration proceeding that the other party materially breached this Agreement,
and the breaching party fails to cure such breach within ninety (90) days after
the conclusion of such arbitration proceeding, including any appeal subject to
Section 10.B.













D.           Licensee’s Right to
Terminate.  Licensee may terminate this Agreement as to any of
the patent applications and/or patents within the Licensed Patents and/or any
country at any time by giving ARCH ninety (90) days prior written
notice.




E.           Effect of
Termination.




(1)           Accrued Rights and
Obligations.  Termination of this Agreement for any reason
shall not release any party hereto from any liability which, at the time of such
termination, has already accrued to the other parry or which is attributable to
a period prior to such termination, nor preclude either party from pursuing any
rights and remedies it may have hereunder or at law or in equity which accrued
or are based upon any event occurring prior to such termination.




(2)           Stock on
Hand.  In the event this Agreement is terminated for any
reason, Licensee and its Affiliates and Sublicensees shall have the right to
sell or otherwise dispose of the stock of any Licensed Product subject to this
Agreement then on hand, subject to Article 3.




(3)           Sublicensees.  Upon
termination of this Agreement for any reason, any sublicense not then in default
shall continue in force and effect and shall be assigned by Licensee to
Licensors; provided, the financial obligations of each Sublicensee to Licensors
shall be limited to the amounts Licensee shall be obligated to pay to Licensors
for the activities of such Sublicensee pursuant to this Agreement.




F.           Survival.  The
provisions of (i) Licensee’s obligation to pay Royalties and Patent Costs
accrued prior to the date of termination and which were not paid or payable
before termination, along with the report of Net Sales and record keeping
required by Paragraphs 3.D and E, and (ii) Paragraphs 6, 7, 9.E, 9.F, 10 and 11
shall survive termination of this Agreement for any reason.




10.          Arbitration.  If
the parties cannot satisfactorily settle any claim, disagreement or controversy
arising out of or related to this Agreement or its interpretation, performance,
nonperformance, breach or their respective rights and obligations hereunder,
such disagreement shall, at the request of either party, be settled by
arbitration as follows:













A.           Panel.  All
such disputes shall be referred to an arbitration panel comprised of three
persons, one to be selected by each party hereto and the third selected by the
first two.  The arbitrators shall be persons involved in and familiar
with the licensing and technology transfer field.  Each party shall
select an arbitrator within twenty (20) days of request for arbitration by
either party.  The first two arbitrators shall select the third member
of the panel within fifteen (15) days after their selection.  The
arbitration shall be held as soon as is reasonably possible after selection of
the arbitration panel.  The proceedings shall be held in an informal
manner as reasonably determined by the arbitrators.  Except for
the right of appeal as set forth in Section 10.B below, the parties shall
be bound by a decision of the arbitration panel with respect to the matter in
dispute.  All proceedings of the arbitration panel shall be held in
Chicago, Illinois.  The panel’s costs and fees shall be borne by the
losing party if the arbitrators designate one party as the losing
party.




B.           Appeals.  There
shall be no appeal from an arbitration panel’s unanimous decision.  In
the event of a majority decision by the arbitration panel, a dissatisfied party
may appeal the panel’s decision to the American Arbitration Association (AAA)
for an independent, final, binding decision.  All appeals shall be
heard in Chicago, Illinois.  The dissatisfied party must make such an
appeal within thirty (30) days after receipt of the arbitration panel’s decision
and if it loses the appeal must bear the parties’ expenses and costs for such
appeal.  The AAA is hereby authorized to make arrangements for such
appeal, to be held under the procedures provided by its arbitration
rules.  Judgment upon any award rendered by all or a majority of the
appeal arbitrators or a unanimous judgment of the initial panel, may be entered
in any court of competent jurisdiction, after any and all applicable appeal
periods have passed.




C.           Not Applicable to
HIM.  This Paragraph 10 does not apply to any such claims,
disagreements, or controversies involving HHMI.




11.           Miscellaneous.




A.           Marking.  Licensee
shall and agrees to cause its Sublicensees and Affiliates of either, to place in
a conspicuous location on Licensed Product (or its packaging where marking the
Product is physically impossible) sold to third parties, a patent notice in
accordance with the laws concerning the marking of patented articles in the
country in which such articles are sold.




B.           United States
Manufacture.  Licensee agrees that, to the extent required by
35 United States Code Section 204, any Licensed Products sold in the United
States will be manufactured substantially in the United States of
America.




C.           Export Regulations.  To
the extent that the United States Export Control Regulations are applicable,
neither Licensee nor Licensor shall, without having first fully complied with
such regulations, (i) knowingly transfer, directly or indirectly, any
unpublished technical data obtained or to be obtained from the other party
hereto to a destination outside the United States, or (ii) knowingly ship,
directly or indirectly, any product produced using such unpublished technical
data to any destination outside the United States.




D.           Entire Agreement, Amendment,
Waiver.  This Agreement together with the Schedules attached
hereto constitutes the entire agreement between the parties regarding the
subject matter hereof, and supersedes all prior written or oral agreements or
understandings (express or implied) between them concerning the same subject
matter.  This Agreement may not be amended or modified except in a
writing signed by duly authorized representatives of each party.  No
waiver of any default hereunder by any party or any failure to enforce any
rights hereunder shall be deemed to constitute a waiver of any subsequent
default with respect to the same or any other provision hereof













E.           Notice.  Any
notice required or otherwise made pursuant to this Agreement shall be in
writing, sent by registered or certified mail properly addressed, or by
facsimile with confirmed answer-back, to the other party at the address set
forth below or at such other address as may be designated by written notice to
the other parties.  Notice shall be deemed effective three (3)
business days following the date of sending such notice if by mail, on the day
following deposit with an overnight courier, if sent by overnight courier, or
upon confirmed answer-back if by facsimile.




If to
ARCH:




ARCH
Development Corporation


1101 East
58th Street


Chicago,
Illinois 60637


Attention:  President




If to
Licensee:




GenVec,
Inc.


12111
Parklawn Drive


Rockville,
MD 20852


Attention:  President


With a
copy to:  Vice President, Corporate Development




F.           Assignment.  This
Agreement shall be binding on the parties hereto and upon their respective
successors and assigns.  ARCH may assign this Agreement at any time to
a third party that performs a similar role as ARCH for the University on written
notice to Licensee and to any other party with the written approval of
Licensee, said approval not to be unreasonably withheld.  This
Agreement shall not be assignable by Licensee without prior written consent from
ARCH, which consent shall not to be unreasonably withheld; provided, however,
that Licensee may assign this Agreement without such consent in connection with
a transfer of all or substantially all of its assets, whether by sale, merger,
operation of law or otherwise.  In the event of any permitted
assignment, the assignee shall be substituted for the assigning party as a parry
hereto, and the assigning party shall no longer be bound hereby by the other
parties.




G.           Governing
Law.  The interpretation and performance of this Agreement
shall be governed by the laws of the State of Illinois applicable to contracts
made and to be fully performed in that state.




H.           The
University.  This Agreement is entered into by ARCH in its own
private capacity and not on behalf of the University, nor as its contractor or
agent.  It is understood and agreed that the University is not a party
to this Agreement and is not liable for nor assumes any responsibility or
obligation under this Agreement, and is not liable for any action or lack
thereof by ARCH.





*The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission





I. 
          Advertising.  Each
party agrees not to use the name of the other party in any commercial activity,
marketing, advertising or sales brochures except with the prior written consent
of the other party, which consent may be granted or withheld in such party’s
sole discretion.  Licensee agrees not to use, and shall prohibit its
Sublicensees and the Affiliates of either from using, the name of HHMI, the
University or any of the inventor(s) in any commercial activity, marketing,
advertising or sales brochures, except to the extent required by
law.




J.  
         Independent
Contractors.  The relationship of the parties hereto is that of
independent contractors.  The parties hereto are not deemed to be
agents, partners or joint venturers of the others for any purpose as a result of
this Agreement or the transactions contemplated thereby.




K.           Right to Develop
Independently.  Nothing in this Agreement will impair
Licensee’s right to independently acquire, license, develop for itself, or have
others develop for it, intellectual property and technology performing similar
functions as the Licensed Patents or to market and distribute Licensed Products
or other products based on such other intellectual property and
technology.




L. 
          Force
Majeure.  Neither party shall lose any rights hereunder or be
liable to the other party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting party if the failure is
occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers, or
any other reason where failure to perform is beyond the reasonable control and
not caused by the negligence, intentional conduct or misconduct of the
nonperforming party and the non-performing party has exerted all reasonable
efforts to avoid or remedy such force majeure; provided, however, that in
no event shall a party be required to settle any labor dispute or
disturbance.




M.          LIMITATION OF
LIABILITY.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF THIS
AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.




N.           Severability.  In
the event that any provisions of this Agreement are determined to be invalid or
unenforceable by a court of competent jurisdiction, the remainder of the
Agreement shall remain in full force and effect without said
provision.  The parties shall in good faith negotiate a substitute
clause for any provision declared invalid or unenforceable, which shall most
nearly approximate the intent of the parties in entering this
Agreement.




O.           Counterparts.  This
Agreement may be executed in two counterparts, each of which shall be deemed an
original and which together shall constitute one instrument.





*The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission







P.           HHMI.  HHMI
is not a party to this License Agreement and has no liability to any licensee,
Sublicensee, or user of any technology covered by this License Agreement, but
HHMI is an intended third-party beneficiary of this License Agreement and
certain of its provisions are for the benefit of HHMI and are enforceable
by HHMI in its own name.




IN
WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by
their respective duly authorized officers or representatives on the date first
above written.




ARCH
      DEVELOPMENT CORPORATION
                    GENVEC,
      INC.By:
                    
                    
                    By:Its:
      CEO
                    
                    
                    Its:
      Vice President/Corporate
Development





*The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission







Schedule
A




*





*The
asterisk denotes that confidential portions of this exhibit have been omitted in
reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential
portions have been submitted separately to the Securities and Exchange
Commission