EXHIBIT 10.9
LICENSE AGREEMENT
     THIS LICENSE AGREEMENT (the “Agreement”), effective as of February 1, 1998(the “Effective Date”), is entered by and between Asahi Chemical Industry Co.,Ltd., with a principal place of business at 5-13, Shibaura 4-Chome, Minato-kuTokyo, 108, Japan (“Asahi”), and GenVec, Inc. with a principal place ofbusiness at 12111 Parklawn Drive, Rockville, Maryland (“GenVec”).
BACKGROUND
     A.     Asahi owns certain Patent Rights (as defined below) relating to tumornecrosis factor alpha (TNF); and
     B.     GenVec desires to obtain a license under the Patent Rights, and Asahidesires to grant such a license to GenVec, on the terms and conditions herein.NOW, THEREFORE, Asahi and GenVec agree as follows:
1. DEFINITIONS
     1.1 “AFFILIATE” means any corporation or other entity which is directlyor indirectly controlling, controlled by or under the common control withGenVec. For the purpose of this Agreement, “control” shall mean the direct orindirect ownership of at least fifty percent (50%) of the outstanding shares orother voting rights of the subject entity to elect directors, or if not meetingthe preceding, any entity owned or controlled by or owning or controlling atthe maximum control or ownership right permitted in the Territory.
     1.2 “CONFIDENTIAL INFORMATION” shall mean (i) any proprietary orconfidential information or material in tangible form disclosed hereunder thatis marked as “Confidential” at the time it is delivered to the receiving party,or (ii) proprietary or confidential information disclosed orally hereunderwhich is identified as confidential or proprietary when disclosed and suchdisclosure of confidential information is confirmed in writing within thirty(30) days by the disclosing party.
     1.3 “CONTROL” means possession of the ability to grant the licenseprovided for herein without violating the terms of any agreement or otherarrangement with a third party.
     1.4 “FIELD” means all gene therapy (IN VIVO and EX VIVO) applications.
     1.5 “LICENSED PRODUCT” means any product which is within the scope of anissued Valid Claim or was within the scope of an issued Valid Claim.
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELYWITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TOTHE OMITTED PORTIONS.
 

 

     1.6 “NET SALES” means the gross revenues actually received by GenVec orits sublicensees from sales of Licensed Products, less (i) normal and customaryrebates, and cash and trade discounts, actually taken, (ii) sales, use and/orother excise taxes or duties actually paid, (iii) the cost of any packages andpacking, (iv) insurance costs and outbound transportation charges prepaid orallowed, (v) import and/or export duties actually paid, and (vi) amountsallowed or credited due to returns.
     1.7 “PATENT RIGHTS” means (i) U.S. patent application Serial No. * (filed*) and U.S. Patent No. *; (ii) all patent applications and patents which claimimprovements to the subject matter of (i) above; (iii) all divisions,continuations, continuations-in-part, and substitutions of (i) and (ii) above;and (iv) all U.S. patents issuing on any of the preceding applications,including extensions, reissues, and re-examinations; in each case, which isowned, in whole or part, or Controlled by Asahi.
     1.8 “PHASE I”, “PHASE II“AND “PHASE III” shall mean Phase I, Phase II, andPhase III clinical trials, respectively, in each case as prescribed by the U.S.Food and Drug Administration.
     1.9 “REGULATORY APPROVAL” shall mean approval by the U.S. Food and DrugAdministration (“FDA”) to market a Licensed Product.
     1.10 “TERRITORY” means the United States of America and its territoriesand possessions.
     1.11 “VALID CLAIM” means (i) a claim of an issued and unexpired U.S.patent included within the Patent Rights which has not been held unenforceableor invalid by a court or other governmental agency of competent jurisdiction inthe Territory, and which has not been disclaimed or admitted to be invalid orunenforceable through reissue or otherwise, or (ii) a claim of a pending U.S.patent application within the Patent Rights.
2. LICENSE; OPTION
     2.1 GRANT TO GENVEC. Asahi hereby grants to GenVec a non-exclusive licenseunder the Patent Rights to make, have made, import, have imported, use, sell,have sold, offer for sale and otherwise exploit the Licensed Products in theTerritory for use in the Field. If Asahi acquires the right to extend thelicense granted herein to the Affiliates of GenVec, then Asahi shall promptlynotify GenVec and GenVec shall automatically have the right to extend thelicense to any of its Affiliates. In the event GenVec extends the licensegranted herein to any of its Affiliates, GenVec shall immediately notify Asahiof the name of such Affiliate. The provisions of this Agreement shall bebinding on such Affiliate, and GenVec shall guarantee the Affiliate’sperformance of the obligations under this Agreement.
     2.2 *. Following the Effective Date, * during the term of thisAgreement.
     2.3 SUBLICENSES; RIGHT OF NEGOTIATION. At any particular time during theterm of the *, GenVec shall have the right to grant one sublicense of the rightsgranted in Section 2.1 above, and if GenVec grants such a sublicense, GenVecshall not itself practice its licensing rights so long as such
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sublicense remains in effect. In the event the foregoing agreement betweenAsahi and * expires or is terminated, GenVec shall have the unrestricted rightto grant sublicenses. In the event GenVec grants a sublicense of the rights inSection 2.1 above, GenVec shall promptly notify Asahi of the name of suchsublicensee. In the event that any existing or potential sublicensee of GenVecwishes to acquire a non-exclusive license with respect to intellectual propertyowned or Controlled by Asahi relating to * (or fragments or derivativesthereof) or the use thereof, Asahi agrees to negotiate in good faith withGenVec the terms and conditions of such a license.
     2.4 EXCLUSIVE OPTION. If GenVec has acquired any intellectual propertyrights necessary to commercialize Licensed Products in *, and GenVec retainsthe legal right to grant to Asahi an option to develop and commercializeLicensed Products in *, then until the second anniversary of the EffectiveDate, Asahi shall have an exclusive option to negotiate and enter into awritten agreement with GenVec with regard to a collaborative licensearrangement for the development and commercialization of Licensed Products in*. The terms and conditions of such agreement shall be negotiated in good faithby the parties commencing at such time as Asahi provides GenVec notice thatAsahi wishes to exercise its option.
3. CONSIDERATION
     3.1 LICENSE FEE. In partial consideration for the license grantedherein, GenVec shall pay to Asahi a license fee of * dollars ($*) within sixty(60) days of the Effective Date. Such fee shall not be due if GenVec providesnotice of its intent to terminate the Agreement within such sixty (60) dayperiod.
     3.2 MILESTONE PAYMENTS. Unless the Agreement is terminated earlier,within sixty (60) days following the first achievement by GenVec or asublicensee of the following milestones with respect to the first LicensedProduct in the Territory, GenVec shall pay Asahi one-time milestone payments,as follows:     **Event** **Payment** Initiation of Phase II clinical trials $* Initiation of Phase III clinical trials $* Regulatory Approval $* 
The payment under Section 3.1 above and the payments in this Section 3.2 shallbe nonrefundable.
     3.3 ROYALTIES.
          3.3.1 DURING PATENT TERM. In consideration of the license grantedherein, GenVec shall pay to Asahi a royalty of * percent (*%) of Net Sales ofLicensed Products which, but for the license granted herein would infringe anissued and unexpired Valid Claim.
          3.3.2 AFTER PATENT TERM. In the event that all issued Valid Claimscovering a particular Licensed Product have expired, but royalties are stilldue Asahi pursuant to Section 3.7,
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then the royalty due with regard to such Licensed Product shall be * percent(*%) of Net Sales of such Licensed Product.
     3.4 THIRD PARTY ROYALTIES. GenVec and its sublicensee shall beresponsible for any payments due to third parties under licenses or similaragreements entered by GenVec or its sublicensee relating to the manufacture,use or sale of Licensed Products in the Territory. GenVec may offset any suchpayments made by GenVec or its sublicensee to third parties against royaltiesdue Asahi pursuant to Section 3.3 above; provided Asahi shall have the right toreceive not less than * percent (*%) of the Net Sales of Licensed Products soldby GenVec or its sublicensee, except as provided in Section 3.3.2.
     3.5 COMBINATION PRODUCTS. In the event that a Licensed Product is soldin combination as a single product with another active ingredient, component orother product whose manufacture, sale and use are not covered by a claim withinthe Patent Rights for which the combination product is sold, Net Sales fromsuch sales for purposes of calculating the amounts due under Sections 3.3 aboveshall be as reasonably allocated by GenVec between such Licensed Product andsuch active ingredient, component or other product, based upon their relativeimportance and proprietary protection.
     3.6 ONE ROYALTY. No more than one royalty payment shall be due withrespect to a sale of a particular Licensed Product. No multiple royalties shallbe payable because any Licensed Product, or its manufacture, sale or use iscovered by more than one Valid Claim. No royalty shall be payable under Section3.3 above with respect to sales of Licensed Products among GenVec and itssublicensee, nor shall a royalty be payable under this Article 3 with respectto Licensed Products distributed for use in research and/or development, inclinical trials or as promotional samples.
     3.7 ROYALTY TERM. Royalties due under this Article 3 shall be payable ona Licensed Product-by-Licensed Product basis until the later of (i) theexpiration of the last-to-expire issued Valid Claim covering such LicensedProduct, or (ii) the twelfth anniversary of the Effective Date.
4. PAYMENTS; REPORTS AND RECORDS
     4.1 PAYMENTS; CURRENCY. GenVec agrees to pay all royalties due to Asahiwithin * days after the last day of each half-calendar year in which theyaccrue. All payments due hereunder shall be paid in United States dollars.
     4.2 TAXES. Any income or other tax that must be withheld on behalf ofAsahi with respect to the royalties owed pursuant to this Agreement shall bededucted by GenVec from the royalties prior to remittance. Within * days afterthe last day of each half-calendar year, GenVec shall furnish to Asahi evidenceof any such taxes withheld.
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     4.3 ROYALTY REPORTS. GenVec shall deliver to Asahi within * days afterthe end of each half-calendar year in which Licensed Products are sold a reportsetting forth in reasonable detail the calculation of the royalties payable toAsahi for such half-calendar year, including the Licensed Products sold, theNet Sales thereof, and all amounts received from sublicensees for sales ofLicensed Products. Such reports shall be Confidential Information of GenVecsubject to Article 6 herein.
     4.4 BOOKS AND RECORDS. GenVec shall maintain accurate books and recordswhich enable the calculation of royalties payable hereunder to be verified.GenVec shall retain the books and records for each half-calendar year periodfor * years after the submission of the corresponding report under Section 4.3hereof. Upon * days prior notice to GenVec, independent accountants selected byAsahi, reasonably acceptable to GenVec, after entering into a confidentialityagreement with GenVec, may have access to GenVec’s books and records duringGenVec’s normal business hours at mutually agreed times to conduct a review oraudit once per calendar year, for the sole purpose of verifying the accuracy ofGenVec’s payments and compliance with this Agreement. The accounting firm shallreport to Asahi only whether there has been a royalty underpayment and, if so,the amount thereof. Any such inspection or audit shall be at Asahi’s expense,however, in the event an inspection reveals underpayment of * percent (*%) ormore in any audit period, GenVec shall pay the costs of the inspection. GenVecshall promptly pay to Asahi any underpayment identified in such an audit whichamount is undisputed by GenVec, with interest from the date such amount(s) weredue at the prime rate reported by the Chase Manhattan Bank, New York, New York.
5. DILIGENCE
     GenVec agrees to use commercially reasonable diligent efforts to developand commercialize the Licensed Products and obtain such approvals as may benecessary for the sale of the Licensed Products in the Territory. GenVec mayconduct such activities itself or through third parties.
6. CONFIDENTIALITY
     6.1 CONFIDENTIAL INFORMATION. Except as expressly provided herein, theparties agree that, for the term of this Agreement and for * years thereafter,the receiving party shall keep completely confidential and shall not publish orotherwise disclose and shall not use for any purpose except for the purposescontemplated by this Agreement any Confidential Information furnished to it bythe disclosing party hereto pursuant to this Agreement, except to the extentthat it can be established by the receiving party by competent proof that suchConfidential Information:
          (i) was already known to the receiving party, other than under anobligation of confidentiality, at the time of disclosure;
          (ii) was generally available to the public or otherwise part of the publicdomain at the time of its disclosure to the receiving party;
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          (iii) became generally available to the public or otherwise part of thepublic domain after its disclosure and other than through any act or omissionof the receiving party in breach of this Agreement;
          (iv) was independently developed by the receiving party as demonstrated bydocumented evidence prepared contemporaneously with such independentdevelopment; or
          (v) was subsequently lawfully disclosed to the receiving party by a personother than a party hereto.
     6.2 PERMITTED USE AND DISCLOSURES. Each party hereto may use or discloseinformation disclosed to it by the other party to the extent such use ordisclosure is reasonably necessary in filing or prosecuting patentapplications, prosecuting or defending litigation, complying with applicablegovernmental regulations or otherwise submitting information to tax or othergovernmental authorities, conducting clinical trials, or making a permittedsublicense or otherwise exercising its rights hereunder, provided that if aparty is required to make any such disclosure of another party’s ConfidentialInformation, other than pursuant to a confidentiality agreement, it will givereasonable advance notice to the latter party of such disclosure and, save tothe extent inappropriate in the case of patent applications, will use its bestefforts to secure confidential treatment of such information prior to itsdisclosure (whether through protective orders or otherwise). Notwithstandingthis Section 6.2 and Section 4.3 herein, Asahi may, subject to aconfidentiality agreement containing provisions at least as restrictive asthose herein, disclose to the Beckman Research Institute of the City of Hope,as is reasonably necessary, the financial terms herein, the payments receivedand the royalty reports made under this Agreement.
     6.3 CONFIDENTIAL TERMS. The parties agree to make a mutually agreedpress release regarding this Agreement promptly following the Effective Date.Except as expressly provided herein, each party agrees not to disclose anyterms of this Agreement to any third party without the consent of the otherparty; provided, disclosures may be made as required by securities or otherapplicable laws, or to actual or prospective investors or corporate partners,or to a party’s accountants, attorneys and other professional advisors.
7. REPRESENTATIONS AND WARRANTIES
     7.1 ASAHI. Asahi represents and warrants that: (i) it is a corporationduly organized validly existing and in good standing under the laws of Japan;and (ii) the execution, delivery and performance of this Agreement have beenduly authorized by all necessary corporate action on the part of Asahi; (iii)it is the sole and exclusive owner or exclusive licensee of all right, titleand interest in the Patent Rights; (iv) it has the right to grant the rightsand licenses granted herein, and the Patent Rights are free and clear of anylien, encumbrance or security interest; (v) it has not previously granted, andwill not grant during the term of this Agreement, any right, license orinterest in and to the Patent Rights, or any portion thereof, inconsistent withthe license granted to
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GenVec herein; and (vi) there are no threatened or pending actions, lawsuits,claims or arbitration proceedings in any way relating to the Patent Rights.
     7.2 GENVEC. GenVec represents and warrants that: (i) it is a corporationduly organized validly existing and in good standing under the laws of theState of Delaware; and (ii) the execution, delivery and performance of thisAgreement have been duly authorized by all necessary corporate action on thepart of GenVec.
     7.3 EFFECT OF REPRESENTATIONS AND WARRANTIES. It is understood that ifthe representations and warranties made by a party under this Article 7 are nottrue and accurate, and the other party incurs damages, liabilities, costs orother expenses as a result, the party making such representations andwarranties shall indemnify and hold the other party harmless from and againstany such damages, liabilities, costs or other expenses incurred as a result.
8. PROSECUTION AND ENFORCEMENT
     8.1 ASAHI’S RESPONSIBILITIES. Asahi shall have the sole right to controlthe preparation, filing, prosecution and maintenance of the Patent Rights, andany interference or opposition proceeding relating thereto, using patentcounsel of its choice and at its sole expense; provided, however, that Asahishall consult with GenVec regarding the prosecution of any such patentapplications by providing GenVec a reasonable opportunity to review and commenton all proposed submissions to any patent office at least thirty (30) daysbefore submittal, and shall incorporate such comments as GenVec may reasonablyrequest. In addition, Asahi shall keep GenVec reasonably informed as to thestatus of such patent applications by promptly providing GenVec copies of allcommunications relating to such patent applications that are received from anypatent office.
     8.2 PATENT TERM EXTENSIONS. To the extent permitted by applicable law,GenVec and Asahi shall jointly apply for patent term extensions of patent(s)within the Patent Rights. If joint applications are not permitted, GenVec shallhave the right to file and diligently seek and obtain such extensions forGenVec or its sublicensee, in GenVec’s name. Asahi agrees to provide reasonableassistance to facilitate GenVec’s efforts to obtain any such extension.
     8.3 ENFORCEMENT. If either party hereto becomes aware that any PatentRights are being or have been infringed by any third party, such party shallpromptly notify the other party hereto in writing describing the facts relatingthereto in reasonable detail. Asahi shall have the initial right, but not theobligation, to institute, prosecute and control any action, suit or proceedingwith respect to such infringement, including any declaratory judgment action(each an “Action”), at its expense; using counsel of its choice. In the eventAsahi fails to initiate or defend any Action involving the Patent Rights withinthree (3) months of receiving notice of any infringement, GenVec shall have theright, but not the obligation, to initiate and control such an Action, at itsexpense; provided, GenVec shall be entitled to offset any amount expended inconnection with such Action against up to fifty percent (50%) of royalties dueunder Section 3.3. In any such event, Asahi shall cooperate reasonably withGenVec in connection with any such Action, at GenVec’s expense; including
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without limitation, by joining such Action as a party if requested by GenVec.Any amounts recovered by GenVec in such Action shall be used first to reimburseAsahi and GenVec for the expenses incurred in connection with such Action andany remainder shall be treated as Net Sales of Licensed Products pursuant toSection 3.3.
     8.4 INFRINGEMENT CLAIMS. If the practice by GenVec of the licensegranted herein results in any allegation or claim of infringement of anintellectual property right of third party against GenVec, GenVec shall havethe exclusive right to defend any such claim, suit or proceeding, at its ownexpense, by counsel of its own choice and shall have the sole right andauthority to settle any such suit; provided, however, Asahi shall cooperatewith GenVec, at GenVec’s reasonable request and expense, in connection with thedefense of such claim.
9. DISPUTE RESOLUTION
     Any dispute under this Agreement (except any dispute relating to thevalidity or enforceability of any patent) which is not settled by mutualconsent shall be finally settled by binding arbitration. Any arbitrationinitiated by GenVec shall be conducted in Tokyo and administered by the JapanCommercial Arbitration Association, and any arbitration initiated by Asahishall be conducted in Washington, D.C., and administered by the AmericanArbitration Association. In each case, the arbitrators shall apply UNCITRALrules and all claims, including counterclaims, shall be subject to resolutionby the same group of arbitrators. Any written evidence originally in a languageother than English shall be submitted in English translation accompanied by theoriginal or a true copy thereof. The costs of the arbitration (includingadministrative and arbitrators’ fees), shall be shared equally by the parties,and each party shall bear its own costs and attorneys’ and witness’ feesincurred in connection with the arbitration. The decision and/or award renderedby the arbitrator shall be written, final and non-appealable and may be enteredin any court of competent jurisdiction for a judicial recognition of thedecision and an order of enforcement.
10. INDEMNIFICATION
     10.1 INDEMNITY. GenVec shall indemnify, defend and hold harmless Asahiand its directors, officers and employees (each an “Indemnitee”) from andagainst any and all liabilities, damages, losses, costs or expenses (includingreasonable attorneys’ and professional fees and other expenses of litigationand/or arbitration) (a “Liability”) resulting from a claim, suit or proceedingbrought by a third party against an Indemnitee, arising from or occurring as aresult of activities performed by GenVec or its sublicensees in connection withthe development, manufacture or sale of any Licensed Product, except to theextent caused by the negligence or willful misconduct of Asahi.
     10.2 PROCEDURE. In the event that any Indemnitee intends to claimindemnification under this Article 10 it shall promptly notify GenVec inwriting of such alleged Liability. GenVec shall have the sole right to controlthe defense and settlement thereof. The Indemnitees shall cooperate with theindemnifying party and its legal representatives in the investigation of anyaction, claim or liability covered by this Article 10. The Indemnitee shallnot, except at its own cost, voluntarily
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make any payment or incur any expense with respect to any claim or suit withoutthe prior written consent of GenVec, which GenVec shall not be required togive.
11. TERM AND TERMINATION
     11.1 TERM. The term of this Agreement shall commence on the EffectiveDate, and unless earlier terminated as provided in this Article 11, shallcontinue in full force and effect on a Licensed Product-by-Licensed Productbasis until there are no remaining royalty payment obligations with respectthereto.
     11.2 TERMINATION FOR CAUSE. If either party materially breaches thisAgreement, the other party may elect to give the breaching party written noticedescribing the alleged breach. If the breaching party has not cured such breachwithin sixty (60) days after receipt of such notice, the notifying party willbe entitled, in addition to any other rights it may have under this Agreement,to terminate this Agreement effective immediately; provided, however, if eitherparty receives notification from the other of a material breach and if theparty alleged to be in default notifies the other party in writing withinthirty (30) days of receipt of such default notice that it disputes theasserted default, the matter will be submitted to arbitration as provided inArticle 9 of this Agreement. In such event, the nonbreaching party shall nothave the right to terminate this Agreement until it has been determined in sucharbitration proceeding that the other party materially breached this Agreement,and the breaching party fails to cure such breach within ninety (90) days afterthe conclusion of such arbitration proceeding.
     11.3 TERMINATION FOR INSOLVENCY. Either party may terminate thisAgreement if the other becomes the subject of a voluntary or involuntarypetition in bankruptcy or any proceeding relating to insolvency, receivership,liquidation, or composition or the benefit of creditors, if that petition orproceeding is not dismissed with prejudice within sixty (60) days after filing.
     11.4 PERMISSIVE TERMINATION. GenVec may terminate this Agreement withrespect to any patent application or patent within the Patent Rights withthirty (30) days written notice to Asahi. GenVec shall have no right toterminate this Agreement pursuant to this Section 11.4 after the expiration ofthe Patent Rights.
     11.5 EFFECT OF TERMINATION.
          (A) ACCRUED RIGHTS AND OBLIGATIONS. Termination of this Agreement for anyreason shall not release any party hereto from any liability which, at the timeof such termination, has already accrued to the other party or which isattributable to a period prior to such termination, nor preclude either partyfrom pursuing any rights and remedies it may have hereunder or at law or inequity which accrued or are based upon any event occurring prior to suchtermination.
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          (B) RETURN OF CONFIDENTIAL INFORMATION. Upon any termination of thisAgreement, each party shall promptly return to the other party all ConfidentialInformation received from the other party (except one copy of which may beretained for archival purposes).
          (C) STOCK ON HAND. In the event this Agreement is terminated for anyreason, GenVec and its sublicensee shall have the right to sell or otherwisedispose of the stock of any Licensed Product then on hand, subject to Articles3 and 4.
          (D) SUBLICENSE. In the event of any termination of this Agreement, anysublicense granted by GenVec shall remain in force and effect and shall beassigned by GenVec to Asahi; provided, the financial obligations of any suchsublicensee shall be limited to the amounts GenVec is obligated to pay to Asahifor the activities of such sublicensee under this Agreement.
     11.6 SURVIVAL. Sections 11.5 and 11.6 and Articles 4, 6, 7, 9, 10 and 12of this Agreement shall survive termination of this Agreement for any reason.
12. MISCELLANEOUS
     12.1 GOVERNING LAW. This Agreement, and any proceeding subject to Article10, shall be governed by and construed in accordance with the laws of the Stateof New York, without reference to principles of conflicts of laws.
     12.2 INDEPENDENT CONTRACTORS. The relationship of the parties hereto isthat of independent contractors. The parties hereto are not deemed to beagents, partners or joint venturers of the other for any purpose as a result ofthis Agreement or the transactions contemplated thereby.
     12.3 ASSIGNMENT. The parties agree that their rights and obligationsunder this Agreement shall not be delegated, transferred or assigned to a thirdparty without prior written consent of the other party hereto. This Agreementshall be binding upon and inure to the benefit of the parties and theirsuccessors and assigns.
     12.4 RIGHT TO DEVELOP INDEPENDENTLY. Nothing in this Agreement willimpair GenVec’s right to independently acquire, license, develop for itself, orhave others develop for it, intellectual property and technology performingsimilar functions as the Patent Rights or to market and distribute LicensedProducts or other products based on such other intellectual property andtechnology.
     12.5 NOTICES. Any required notices hereunder shall be given in writing bycertified mail or international express delivery service (e.g., DHL) at theaddress of each party below, or to such other address as either party maysubstitute by written notice. Notice shall be deemed served when delivered or,if delivery is not accomplished by reason or some fault of the addressee, whentendered.   If to Asahi: Asahi Chemical Industry Co., Ltd.
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     5-13 Shibaura 4-Chome  Minato-ku Tokyo, 108, Japan  Attention: Dr. Tetsu Saito, General Manager  Licensing and Business Development GroupIf to GenVec: GenVec, Inc.  12111 Parklawn Drive  Rockville, Maryland 20852  Attention: President   with a copy to: Vice President, Corporate Development
     12.6 FORCE MAJEURE. Neither party shall lose any rights hereunder or beliable to the other party for damages or losses (except for paymentobligations) on account of failure of performance by the defaulting party ifthe failure is occasioned by war, strike, fire, Act of God, earthquake, flood,lockout, embargo, governmental acts or orders or restrictions, failure ofsuppliers, or any other reason where failure to perform is beyond thereasonable control and not caused by the negligence, intentional conduct ormisconduct of the nonperforming party and such party has exerted all reasonableefforts to avoid or remedy such force majeure; provided, however, that in noevent shall a party be required to settle any labor dispute or disturbance.
     12.7 ADVICE OF COUNSEL. GenVec and Asahi have each consulted counsel oftheir choice regarding this Agreement, and each acknowledges and agrees thatthis Agreement shall not be deemed to have been drafted by one party or anotherand will be construed accordingly.
     12.8 APPROVALS. Each party shall be responsible, at its expense, forobtaining any approvals from its own government which may be required underapplicable law, and shall use its best efforts to obtain all necessaryapprovals as soon as possible after the execution of this Agreement.
     12.9 COMPLIANCE WITH LAWS. Each party shall furnish to the other partyany information requested or required by that party during the term of thisAgreement or any extensions hereof to enable that party to comply with therequirements of any U.S. or foreign, state and/or government agency.
     12.10 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHERFOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OFTHIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.
     12.11 FURTHER ASSURANCES. At any time or from time to time on and afterthe date of this Agreement, Asahi shall at the request of GenVec (i) deliver toGenVec such records, data or other documents consistent with the provisions ofthis Agreement, (ii) execute, and deliver or cause to be
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delivered, all such consents, documents or further instruments of transfer orlicense, and (iii) take or cause to be taken all such actions, as GenVec mayreasonably deem necessary or desirable in order for GenVec to obtain the fullbenefits of this Agreement and the transactions contemplated hereby.
     12.12 SEVERABILITY; WAIVER. In the event that any provisions of thisAgreement are determined to be invalid or unenforceable by a court of competentjurisdiction, the remainder of the Agreement shall remain in full force andeffect without said provision. The parties shall in good faith negotiate asubstitute clause for any provision declared invalid or unenforceable, whichshall most nearly approximate the intent of the parties in entering thisAgreement. The failure of a party to enforce any provision of the Agreementshall not be construed to be a waiver of the right of such party to thereafterenforce that provision or any other provision or right.
     12.13 ENTIRE AGREEMENT; MODIFICATION. This Agreement sets forth theentire agreement and understanding of the parties with respect to the subjectmatter hereof, and supersedes all prior discussions, agreements and writings inrelating thereto. This Agreement may not be altered, amended or modified in anyway except by a writing signed by both parties.
     12.14 COUNTERPARTS. This Agreement may be executed in two counterparts,each of which shall be deemed an original and which together shall constituteone instrument.
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     IN WITNESS WHEREOF, Asahi and GenVec have executed this Agreement by theirrespective duly authorized representatives.     ASAHI CHEMICAL INDUSTRY GENVEC, INC. CO., LTD.     By:   By:     Katsuaki Tuzuki    Managing Director & General Manager Print Name:      of Health Care Business Administration Title:    
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