Document:

Exhibit
10.30

     

    LICENSE
AGREEMENT

     

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

     

    Purpose and
Intent

     

    A           ARCH
and DFCI (hereinafter referred to collectively as “Licensors” and referred to
individually as a “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, ARCH and Licensee have entered into a separate License
Agreement regarding certain other patent rights owned solely by
ARCH.

     

    Therefore,
the parties agree as follows:

     

    Agreement

     

    1.           Definitions.  The
following capitalized terms used in this Agreement all 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.           “ARCH Agreement” shall
mean that certain
License Agreement entered into by ARCH and Licensee effective of even date
herewith.

     

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

     

    D.           “Field” means all Gene
Therapy applications.

     

    E.           “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 vivo introduction of
nucleic acid into cells, which cells are later introduced into such person’s
body, or by in vivo introduction 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).

     

    *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

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    F.           “Licensed Patents”
means the patent applications listed on Schedule A attached hereto, including
all divisions, continuations, continuations-in-part, foreign counterparts, and
any valid patents which may issue therefrom and any reissues, renewals,
substitutions, or extensions of or to any such patents or patent
applications.  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 device(s) 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.

     

      *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

    
      
         

      

      
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    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.  Licensors
hereby grant 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.

     

      *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

    
      
         

      

      
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    (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 Licensee’s exclusive rights,
privileges and license hereunder
shall terminate.

     

    C.          Reservation of
Rights.  Each
of DFCI and ARCH reserves for itself and ARCH reserves for the University the
non-transferable right to practice 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.  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.

     

    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 prior agreement effective May 26, 1993 by and between
ARCH, DFCI and Licensee, which is hereby terminated and of no further force or
effect.

     

      *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

    
      
         

      

      
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    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:

     

    (a)          $*
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

     

    (b)          $*
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 this Section 3.A(1) shall be fully creditable against any
amounts due to ARCH under Section 3.A(1) of the ARCH Agreement.

     

    (2)          If
in Licensee’s judgment, based on reasonable legal or commercial considerations,
it is desirable for Licensee or any Affiliate or 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 third party licensors (up to a
maximum of two additional third party licensors)

     

    B.           Royalties.

     

    (1)          Subject
to reduction pursuant to subsection 3.8(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 Licensors
pursuant to Paragraph 3B herein, on a country-by-country basis, up to a maximum
of * of the amounts due under Paragraph 3.B, Any such amounts which are not
offset in any quarter may be carried forward until applied.

     

      *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

    
      
         

      

      
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    (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 ARCH Agreement shall not
exceed a cumulative total of * of Net Sales (as defined in such Agreements), and
that any Royalties paid under this Agreement shall be fully creditable against
any royalties due to ARCH under the ARCH 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.  Licensors
hereby represent 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 Licensors pursuant to licensing agreement(s) for the Licensed
Patents.  Therefore, Licensors hereby direct Licensee, and Licensee
hereby agrees, that all payments to be made by Licensee to Licensors under this
Agreement shall be paid to ARCH on behalf of the Licensors 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 Licensors 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 Licensors, and Licensee shall have no
further obligations under this Agreement with respect thereto.

     

      *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

    
      
         

      

      
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    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
Licensors 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 Licensors 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 Licensors 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.

     

      *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

    
      
         

      

      
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    (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.

     

      *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

    
      
         

      

      
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    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.  ARCH
and DFCI acknowledge that a total amount of $333,333.75 shall be paid to ARCH
for such fees and expenses in full payment of such amounts due as of May 15,
1999 pursuant to the terms of the letter sent by GenVec to ARCH and DFCI dated
June 14, 1999.  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 ARCH 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

                	 
      	
                  Date

                
	
                  Obtain
      rights to TNFalpha
      or alternative therapeutic gene designated by Licensee for use in
      conjunction with one or more of the Licensed Patents (“Milestone
      1”)

                	 
      	
                  3/31/99

                
	 	 	 
	
                  File
      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
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

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    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, together with DFCI, 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, 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.          DFCI.  DFCI
represents and warrants that: (i) it, together with ARCH, 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 and 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, 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.

     

      *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

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    C.          Disclaimer of
Warranties.  Except
as expressly provided above, Licensors make no representations or warranties of
any kind, express or implied, with respect to the inventions) 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 Licensors 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.

     

    D.          Indemnification.  Licensee
agrees, and agrees to use its Sublicensees and Affiliates of either, to
indemnify, defend and hold harmless Licensors, their Affiliates and all
trustees, directors, officers, employees, fellows and agents of any of the
foregoing (including Licensors and their 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 Licensors 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.  Licensors shall be entitled to participate, at their
option and expense, through counsel of their 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.

     

    E. 
         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 limiters 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.

     

      *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

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    F.           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
Indemnitees 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.D. 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 Licensors 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.D. of this Agreement.  Licensee shall provide a Licensor
with written evidence of such insurance upon written request of such
Licensor.  Licensee shall provide each of the Licensors 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.  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.

     

      *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

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    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 party;
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.  Licensors
shall provide to Licensee copies of any proposed written publication by
Licensors containing any Confidential Information and, to the extent Licensors
are 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 Licensors.  The parties shall provide copies of such proposed
written publications at least ninety (90) 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 Licensors 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 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.

     

      *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

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    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.  Licensors 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 Licensors for its reasonable third party out-of-pocket fees
and expenses incurred in joining an action or proceeding or cooperating with
Licensee.  Licensors may be represented by counsel in any such legal
proceedings, at Licensors’ own expense, acting in an advisory but not
controlling capacity.

     

    (2)       
  The prosecution, settlement, or abandonment of any action or
proceeding under Paragraph 8.8.(1) shall be at Licensee’s reasonable discretion
provided that Licensee shall not have any right to surrender any of Licensors’
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.          Licensors’ Right to Bring Infringement
Action.  If
a third party infringes any patent included in the Licensed Patents within the
Field, and Licensors wish to initiate a legal proceeding against such
infringement, Licensors all 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,
Licensors shall have the right, at their 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 Licensors may reasonably
request.  Except as specifically provided in this Paragraph, Licensors
shall have the right to retain all amounts recovered of every kind and
nature.  Amounts recovered by Licensors shall not be considered Net
Sales under this Agreement and shall not give rise to royalty payments under
Paragraph 3

     

      *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

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    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 Licensors 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 a 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.

     

      *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

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    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 party 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:

     

      *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

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    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.

     

    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 Licensors 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.

     

      *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

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    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 property 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
DFCI:

     

    Dana-Farber
Cancer Institute, Inc.

    44 Binney
Street

    Boston,
MA

    Attention:  Director
for Research

    With a
copy to:  Director, Office of Technology Transfer

     

    If to
Licensee:

     

    GenVec,
Inc.

    12111
Parklawn Drive

    Rockville,
MD 20852

    Attention:
President

    With a
copy to:  Vice President, Corporate Development

     

    F.           Assignments.  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 party hereto, and the assigning
party shall no longer be bound hereby by the other parties.

     

      *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

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    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.

     

    I.          
 Advertising.  Each
party agrees not to use the name of the other parties 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 DFCI, 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.         Joint Action of
Licensors.  Any
action taken by ARCH hereunder shall be taken as an action by Licensors jointly,
and at Licensee’s request, Licensors shall provide to Licensee a written
statement signed by both Licensors, or their successors in interest, providing
confirmation of such joint action.

     

      *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

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    N.          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.

     

    O.          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.

     

    P.           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

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    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

                            

                    

                  

                

              

            

          

        

      

    

    

    DANA
FARBER CANCER INSTITUTE

    

    
      
        
          	
                  By:

                	
                     

                
	 
      	
                   
      Its:  Director, Office of Technology
  Transfer

                

        

      

    

     

      *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

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    Schedule
A

     

    
      	
              1.

            	
              *

            

    

     

    *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
CommissionEXHIBIT
10.31

    

    

    

    September
21, 1999

    

    
      
        
          	
                  Via Federal Express

                	 
      
	
                  Andrew
      Scott

                	
                  Ruth
      Emyanitoff, Ph.D.

                
	
                  ARCH
      Development Corporation

                	
                  Dana-Farber
      Cancer Institute

                
	
                  5640
      South Ellis

                	
                  375
      Longwood

                
	
                  Suite
      405

                	
                  6th
      Floor

                
	
                  Chicago,
      IL 60637

                	
                  Boston,
      MA 02115

                

        

      

    

    

    Dear
Andrew & Ruth:

     

    This will
confirm the agreement of GenVec, Inc. ("GenVec"), ARCH Development Corporation
("ARCH") and the Dana-Farber Cancer Institute, Inc. ("DFCI") regarding the
amendment of that certain license agreement entered into by and between DFCI,
ARCH and GenVec with respect to that certain license agreement dated May 26,
1993. The parties agree that Section 3B(4) shall be amended to provide in its
entirety as follows:

     

    No more
than one Royalty payment shall be due with respect to a sale of a particular
Licensed Product under this Agreement and the ARCH Agreement and shall be due
and payable to ARCH and DFCI. No multiple Royalties shall be payable because any
Licensed Product, or its manufacture, sale or use is covered by more than one
Valid Claim under this Agreement and the ARCH Agreements It is understood and
agreed that Licensee's total Royalty obligation under this Agreement and the
ARCH Agreement shall not exceed a cumulative total of * of Net Sales (as defined
in such Agreements) and may be as low as * of Net Sales due to offsets available
pursuant to Section 3B(2), and that any Royalties paid under this Agreement
shall be fully creditable against any royalties due to ARCH under the ARCH
Agreement and shall fully satisfy Licensee's royalty obligations to ARCH due
under the ARCH Agreement on a Licensed Product-by-Licensed Product
basis.

     

    *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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Please
indicate your agreement with the foregoing by signing below and returning one
copy to me.

     

    
      
        	
                Sincerely,

              
	 
      
	
                Thomas
      E. Smart

              
	
                Vice
      President, Corporate
Development

              

      

    

     

    UNDERSTOOD
AND AGREED:

     

    
      
        
          
            	
                    ARCH
      DEVELOPMENT CORPORATION

                  	 
      	
                    DANA-FARBER
      CANCER INSTITUTE

                  
	 
      	 
      	 
      
	
                    By:

                  	 
      	 
      	
                    By:

                  	 
      
	 
      	 
      	 
      
	
                    Name:  Alan
      Thomas

                  	 
      	
                    Name:  Ruth
      Emyanitoff, Ph.D.

                  
	 
      	 
      	 
      
	
                    Title:  Assistant
      Secretary

                  	 
      	
                    Title:  Director,
      Office of Technology

                  
	  	 
      	      
                      
      Transfer

                  
	 
      	 
      	 
      
	
                    Date:

                  	
                    10/1/1999

                  	 
      	
                    Date:

                  	
                    10/20/1999

                  

          

        

      

    

    
      
         

      

      
        2

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