Document:

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                                                                   EXHIBIT 10.9

                           COMMERCIALIZATION AGREEMENT

     This COMMERCIALIZATION AGREEMENT (the "Agreement"), effective as of
September 26, 1997 (the "Effective Date"), is made by and between Fuso
Pharmaceutical Industries, Ltd., a corporation organized under the laws of
Japan, with a principal place of business at 3-11, 2-Chome, Morinomiya, Joto-ku
Osaka 536 Japan and its registered head office at 7-10, 1-Chome, Doshomachi,
Chuo-ku, Osaka 541 Japan ("Fuso"), and GenVec, Inc., a Delaware corporation,
with a principal place of business at 12111 Parklawn Drive, Rockville, Maryland
20852 ("GenVec").

                                   BACKGROUND

     A. GenVec has expertise in the field of gene therapy and is developing
novel, proprietary materials and methods for use in the treatment of human
cancer.

     B. Fuso is in the business of developing manufacturing and commercializing
pharmaceuticals in Japan.

     C. GenVec and Fuso desire to establish a collaborative relationship to
conduct research and develop certain gene therapy products for the treatment of
human cancer, which Fuso shall have the right to commercialize in the Territory
(as defined below) and GenVec shall have the right to commercialize outside the
Territory.

     D. GenVec and Fuso have entered into a Stock Purchase Agreement of even
date herewith, pursuant to which GenVec shall sell to Fuso, and Fuso shall
purchase 444,445 shares of GenVec Series E Convertible Preferred Stock. This
Commercialization Agreement shall only be effective if the purchase of such
stock is timely completed as set forth in the Stock Purchase Agreement.

     NOW THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:

1.   DEFINITIONS

     1.1  INCORPORATION BY REFERENCE.  For purposes of this Agreement, the
capitalized terms used in this Agreement which are not defined herein shall have
the meanings set forth in the Collaboration Agreement.

[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS. OMITTED TEXT IS INDICATED BY A "*".

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     1.2  "AFFILIATE" shall mean any corporation or other entity which is
directly or indirectly controlling, controlled by or under the common control of
a party hereto. For the purpose of this Agreement, "control" shall mean the
direct or indirect ownership of at least fifty percent (50%) of the outstanding
shares or other voting rights of the subject entity to elect directors, or if
not meeting the preceding, any entity owned or controlled by or owning or
controlling at the maximum control or ownership right permitted in the country
where such entity exists.

     1.3  "COLLABORATION AGREEMENT" shall mean that certain Collaboration
Agreement between the parties effective on even date herewith.

     1.4  "COLLABORATION PRODUCT" shall mean a Product Configuration developed
in the Research Program intended for use in the Field which the Steering
Committee has designated as such pursuant to Section 2.4 of the Collaboration
Agreement.

     1.5  "CONFIDENTIAL INFORMATION" shall mean (i) any proprietary or
confidential information or material in tangible form disclosed hereunder that
is marked as "Confidential" at the time it is delivered to the receiving party,
or (ii) proprietary or confidential information disclosed orally hereunder which
is identified as confidential or proprietary when disclosed and such disclosure
of confidential information is confirmed in writing within thirty (30) days by
the disclosing party.

     1.6  "DEVELOPMENT PLAN" shall mean the written plan for development of a
particular Collaboration Product prepared pursuant to Section 2.4.2 of the
Collaboration Agreement.

     1.7 "DFCI" shall mean the Dana Farber Cancer Institute, Inc.

     1.8  "FUSO TECHNOLOGY" shall mean Fuso Patent Rights and Fuso Know-How:

          1.8.1 "FUSO PATENT RIGHTS" shall mean (i) all patents and patent
applications conceived and reduced to practice by Fuso alone, or Fuso and/or
its agents (including researchers at Jikei University), in connection with
the Research Program during the Research Program Term (as defined in Section
1.19 of the Collaboration Agreement), and (ii) any divisions, continuations,
continuations-in-part, reissues, reexaminations, extensions or other
governmental actions which extend any of the subject matter of the patent
applications or patents in (i) above, and any substitutions, confirmations,
registrations or revalidations of any of the foregoing, in each case, which
is owned or controlled, in whole or part, by license, assignment or otherwise
by Fuso, to the extent Fuso has the right to license or sublicense, and
subject to any limitations of such license or sublicense. For the avoidance
of doubt, the Fuso Patent Rights shall not include Fuso Know-How or any Gene
Therapy Technology.

          1.8.2 "FUSO KNOW-HOW" shall mean confidential information and
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said

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information and data, discovered, developed or acquired by Fuso alone, or Fuso
and/or its agents (including researchers at Jikei University), in connection
with the Research Program during the Research Program Term which Fuso has the
right to license or sublicense, and subject to any limitations of such license
or sublicense. For the avoidance of doubt, Fuso Know-How shall not include any
Fuso Patent Rights or any Gene Therapy Technology.

     1.9 "FIELD" shall mean Gene Therapy for the treatment of human cancer *
or, in each case, any portion or derivative thereof.

     1.10 "GENE THERAPY" shall mean the introduction of a gene into a person for
therapeutic purposes (i) by in vivo introduction for incorporation into cells of
such person, or (ii) by ex vivo introduction into cells for transfer into a
person.

     1.11 "GENE THERAPY TECHNOLOGY" shall have the meaning set forth in
Section 7.1.2 below.

     1.12 "GENVEC TECHNOLOGY" shall mean GenVec Patent Rights, GenVec Know-How
and Gene Therapy Technology.

          1.12.1  "GENVEC PATENT RIGHTS" shall mean (i) all patents and patent
applications listed on Exhibit A hereto, or conceived and reduced to practice by
GenVec alone, or GenVec and/or its agents (including researchers at DFCI) in
connection with the Research Program during the Research Program Term, and (ii)
any divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions or other governmental actions which extend any of the subject matter
of the patent applications or patents in (i) above, and any substitutions,
confirmations, registrations or revalidations of any of the foregoing, in each
case, which is owned or controlled, in whole or part, by license, assignment or
otherwise by GenVec, to the extent GenVec has the right to license or
sublicense, and subject to any limitations of such license or sublicense. For
the avoidance of doubt, the GenVec Patent Rights shall not include GenVec Know-
How.

          1.12.2  "GENVEC KNOW-HOW" shall mean confidential information and
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired by GenVec alone, or
GenVec and/or its agents (including researchers at DFCI), in connection with the
Research Program during the Research Program Term, which GenVec has the right to
license or sublicense, and subject to any limitations of such license or
sublicense. For the avoidance of doubt, GenVec Know-How shall not include any
GenVec Patent Rights.

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     1.13 "JOINT TECHNOLOGY" shall mean the Joint Patent Rights and Joint Know-
How.

          1.13.1  "JOINT PATENT RIGHTS" shall mean (i) all patents and patent
applications conceived and reduced to practice jointly by Fuso (or its agents,
including researchers at Jikei University) and GenVec (or its agents, including
researchers at DFCI) in connection with the Research Program during the Research
Program Term and (ii) any divisions, continuations, continuations-in-part,
reissues, reexaminations, extensions or other governmental actions which extend
any of the subject matter of the patent applications or patents in (i) above,
and any substitutions, confirmations, registrations or revalidations of any of
the foregoing. For the avoidance of doubt, the Joint Patent Rights shall not
include the Joint Know-How or any Gene Therapy Technology.

          1.13.2  "JOINT KNOW-HOW" shall mean confidential information and
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired jointly by Fuso (or its
agents, including researchers at Jikei University), and GenVec (or its agents,
including researchers at DFCI in connection with the Research Program during the
Research Program Term. For the avoidance of doubt, the Joint Know-How shall not
include the Joint Patent Rights or any Gene Therapy Technology.

     1.14 "MHW" shall mean the Japanese Ministry of Health and Welfare, or any
corresponding foreign registration or foreign regulatory authority in the
Territory.

     1.15 "NET SALES" shall mean the gross revenue accrued by Fuso or its
Affiliates or Sublicensees for all Collaboration Products sold by Fuso and its
Affiliates and Sublicenses in arm's length sales to bona fide independent third
parties, and for any and all services related to the Collaboration Products
performed by or on behalf of Fuso or its Affiliates and Sublicensees, less to
the extent included in the invoice price: (1) ordinary and customary trade
discounts actually allowed; (2) credits, rebates and returns (including, but not
limited to, wholesaler and retailer returns); (3) freight, postage and duties
paid for and separately identified on the invoice or other documentation
maintained in the ordinary course of business, and (4) excise taxes, other
consumption taxes, customs duties and compulsory payments to governmental
authorities actually paid and separately identified on the invoice or other
documentation maintained in the ordinary course of business. Net Sales shall
also include the fair market value of all other consideration received by Fuso
or its Affiliates or permitted Sublicensees in respect of any grant of rights to
make, use, sell or otherwise distribute Collaboration Products, whether such
consideration is in cash payment in kind, exchange or another form.

In the case of discounts on "bundles" of products or services which include
Collaboration Products, Fuso may with notice to GenVec discount the bona fide
list price of a Collaboration Product by the average percentage discount of all
products of Fuso and/or its Affiliates or Sublicensees in a particular "bundle",
calculated as follows:

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[eszett] Average percentage                    A
[eszett] discount on a                  = (1- --- ) x 100
[eszett] particular "bundle"                   B

where A equals the total discounted price of a particular "bundle" of
products, and B equals the sum of the undiscounted bona fide list prices of
each unit of every product in such "bundle". Fuso shall provide GenVec
documentation, reasonably acceptable to GenVec, establishing such average
discount with respect to each "bundle". If Fuso cannot so establish the
average discount of a "bundle", Net Sales shall be based on the undiscounted
list price of the Collaboration Product in the "bundle". If a Collaboration
Product in a "bundle" is not sold separately and no bona fide list price
exists for such Collaboration Product, the parties shall negotiate in good
faith an imputed list price for such Collaboration Product and Net Sales with
respect thereto shall be based on such imputed list price.

     1.16  "PRODUCT CONFIGURATION" shall mean any potential product for use in
the Field containing a combination of one or more genes (or fragments thereof
and other elements (e.g., a gene delivery vehicle and/or a gene expression
cassette).

     1.17  "PRODUCT LICENSE APPLICATION" or "PLA" shall mean the Japanese
equivalent of a Product License Application, as defined in the U.S. Food, Drug
and Cosmetic Act and the regulations promulgated thereunder, and any
corresponding foreign application, registration or certification in the
Territory.

     1.18  "STEERING COMMITTEE" shall have the meaning set forth in Section 2.2
in the Collaboration Agreement.

     1.19  "SUBLICENSEE" shall mean a third party to whom Fuso has granted a
license or sublicense under the GenVec Technology or Joint Technology to make,
use and/or sell a Collaboration Product subject to Section 2.2 below. As used in
this Agreement, Sublicensee shall also include a third party to whom Fuso has
granted the right to distribute the Collaboration Product, provided that such
third party has the responsibility for marketing and/or promotion of the
Collaboration Product within the territory for which such distribution rights
are granted. For the avoidance of doubt, wholesellers or retailers who do not
take such responsibility shall not be deemed as Sublicensees. Further, Contract
Manufacturers set forth in Section 2.2.2 shall not be included in Sublicensees.

     1.20  "TERRITORY" shall mean Japan, and, where the option set forth in
Section 5.2.1 is exercised by Fuso, Korea and/or Taiwan, as the case may be.
"Retained Territory" shall mean, on a Collaboration Product-by-Collaboration
Product basis, Japan, Korea and Taiwan until the earlier of (i) Fuso exercises
its option with respect to a particular Collaboration Product, or (ii) the
applicable option period expires, and thereafter shall have the same meaning as
Territory with regard to such Collaboration Product.

     1.21  "VALID CLAIM" shall mean a claim of a pending patent application or a
claim of an issued and unexpired patent within the GenVec Technology or Joint
Patent Rights which has not

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been held unpatentable, invalid or unenforceable by a court or other government
agency of competent jurisdiction in an unappealed or unappealable decision and
has not been admitted to be invalid or unenforceable through reissue,
re-examination, disclaimer or otherwise; provided, however, that if the holding
of such court or agency is later reversed by a court or agency with appropriate
authority, the claim shall be reinstated as a Valid Claim with respect to Net
Sales accruing after the date of such reversal.

2.   LICENSE GRANTS

     2.1  COMMERCIALIZATION LICENSES TO FUSO.  Subject to the terms and
conditions of this Agreement, GenVec hereby grants to Fuso an exclusive,
royalty-bearing license under the GenVec Technology and GenVec's interest in the
Joint Technology, to make (subject to Article 6), have made (subject to Section
2.2.2) use, sell and otherwise commercialize Collaboration Products for all uses
in the Field in the Territory.

     2.2  SUBLICENSES AND CONTRACT MANUFACTURING.

          2.2.1 SUBLICENSEES. Fuso may sublicense the rights to make, use and/or
sell granted in Section 2.1 to third parties, with the prior written consent of
GenVec, which consent shall not be unreasonably withheld. Fuso may sublicense
the rights granted in Section 2.1 to make Collaboration Products to Affiliates
of Fuso without the consent of GenVec, and such sublicense shall remain in
effect so long as such party remains an Affiliate of Fuso. Each sublicense
granted by Fuso shall be consistent with all the terms and conditions of this
Agreement. Fuso shall remain responsible to GenVec for all of each such
Sublicensee's applicable financial and other obligations under this Agreement.

          2.2.2 CONTRACT MANUFACTURING. Subject to Article 6, Fuso may have
Collaboration Products made by a third party contract manufacturer ("Contract
Manufacturer") that will sell the Collaboration Products produced by it only to
Fuso, its Affiliates or permitted Sublicensees; provided that (i) such Contract
Manufacturers agree in writing to be bound by the confidentiality obligations
set forth in Article 9 hereof as if they were a party to this Agreement, (ii)
Fuso shall notify the name and financial strength of each Contract Manufacturer
to GenVec prior to the commencement of the contract manufacturing, and (iii)
Fuso shall remain responsible to GenVec for any failure by Contract
Manufacturers to conform to such obligation.

     2.3  OTHER LICENSES.

          2.3.1  GENE THERAPY TECHNOLOGY.  In the event that Fuso desires to
acquire a license under Gene Therapy Technology for commercial applications in
the Territory, Fuso shall notify GenVec, and the parties agree to negotiate in
good faith for a period of ninety (90) days, or such longer period as the
parties may agree, the terms and conditions on which GenVec would grant such a
license to Fuso; provided, however, in no event shall GenVec be obligated to
negotiate or grant a license for any commercial application(s) which might
compete with the business interests of GenVec or its Affiliates.

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          2.3.2 FUSO TECHNOLOGY.  Subject to the provisions of Section 7.1.2
below, Fuso hereby grants to GenVec the following licenses under the Fuso
Technology and Fuso's interest in the Joint Technology:

                (a) a non-exclusive, royalty-free license to make, have made,
use, sell and otherwise commercialize Collaboration Products, in the Field,
outside the applicable Retained Territory; and

                (b) an exclusive, royalty-free license, subject to Section 5.5.2
below, to make, have made, use, sell and otherwise commercialize Collaboration
Products outside the Field, in and outside the applicable Retained Territory;
and

                (c) an exclusive, royalty-bearing license to make, have made,
use, sell and otherwise commercialize products other than Collaboration Products
both in and outside the Field and the applicable Retained Territory. The
financial obligations due Fuso with respect to such license shall be negotiated
in good faith by the parties; provided, in the event the parties are unable to
agree, such terms shall be established pursuant to Article 12.

          2.3.3 GenVec may sublicense the rights granted in Section 2.3.2 to
third parties, with the prior written consent of Fuso, which consent shall not
be unreasonably withheld. GenVec may sublicense the right granted in Section
2.3.2 to make Collaboration Products to Affiliates of GenVec without such
consent of GenVec. Each sublicense granted by GenVec shall be consistent with
all the terms and conditions of this Agreement and no Sublicensee may grant
further sublicenses without the prior written consent of GenVec. GenVec shall
remain responsible to Fuso for all of each such sublicensee's applicable
financial and other obligations under this Agreement.

     2.4  COVENANT NOT TO SUE.  In partial consideration for the grant of rights
hereunder, Fuso agrees not to enforce against GenVec or its Affiliates any
patent right owned or controlled by Fuso or its Affiliates during the term of
this Agreement that GenVec or its Affiliates may infringe in practicing the
inventions claimed in the GenVec Patent Rights.

     2.5  RETAINED RIGHTS.  It is understood and agreed that GenVec shall retain
the exclusive right (i) to make, have made, use, sell and otherwise
commercialize the Collaboration Products for all uses within the Field outside
the applicable Retained Territory; (ii) subject to Sections 2.4.3, 2.4.4, and
2.4.5 of the Collaboration Agreement to make, have made, use, sell and otherwise
commercialize the Collaboration Products for use outside the Field, both in and
outside the applicable Retained Territory; (iii) to make, have made, use and
sell Collaboration Products to Fuso in connection with the activities conducted
by GenVec pursuant to this Agreement, unless and until Fuso assumes manufacture
of the Collaboration Products pursuant to Article 6, and (iv) to practice any
method, process or procedure within, and otherwise develop, exploit and/or
commercialize the Gene Therapy Technology.

     2.6  NO IMPLIED LICENSES.  Fuso acknowledges that the licenses granted by
GenVec in Section 2.1 are limited to the Field and the applicable Retained
Territory.  No rights or licenses with

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respect to the GenVec Technology or the Fuso Technology or other intellectual
property owned by GenVec or Fuso are granted or shall be deemed granted
hereunder or in connection herewith, other than those rights expressly granted
in this Agreement or the Collaboration Agreement.

3.   PAYMENTS

     3.1 ROYALTIES.

          3.1.1 ROYALTIES ON NET SALES.  In partial consideration of the rights
granted hereunder, Fuso shall pay running royalties to GenVec equal to * of Net
Sales of Collaboration Products by Fuso and its Affiliates or Sublicensees.

          3.1.2 SINGLE ROYALTY; NON-ROYALTY SALES.  No royalty shall be payable
under Section 3.1 above with respect to sales of the Collaboration Product among
Fuso, its Affiliates and Sublicensees for resale. In no event shall more than
one such royalty be due GenVec hereunder with respect to any Collaboration
Product.

          3.1.3 ROYALTY TERM. The obligation of Fuso to pay royalties under this
Article 3 shall continue for each Collaboration Product on a Collaboration
Product-by-Collaboration Product and country-by-country basis, until the later
of (i) such time as there are no Valid Claims covering the manufacture, sale or
use of such Collaboration Product in such country, or (ii) ten (10) years from
the first commercial sale of such Collaboration Product in such country.

          3.1.4 MINIMUM ROYALTY.  It is understood and agreed that regardless
of any offsets to which Fuso is entitled, the royalty payments made to GenVec
under Section 3.1 in any quarter shall not be less than * of Net Sales of
Collaboration Products by Fuso and its Affiliates and Sublicensees in the
applicable quarter.

          3.1.5 THIRD PARTY ROYALTIES.  Except as provided in Section 2.3.2 of
the Collaboration Agreement, Fuso shall be responsible for the payment of any
royalties, license fees and milestone and other payments due to third parties
under licenses or similar agreements necessary for the manufacture, use or sale
of Collaboration Products in the Territory. * of any such royalty payments due
third parties in any quarter against *

     3.2  INITIAL PAYMENTS.  Within thirty (30) days following the first
occurrence in * with respect to each Collaboration Product, Fuso shall pay
to * Fuso shall promptly notify GenVec upon the achievement of the foregoing
milestone with respect to each Collaboration Product.

4.   PAYMENTS; BOOKS AND RECORDS

     4.1  ROYALTY REPORTS AND PAYMENTS.  After the first commercial sale by Fuso
or its Affiliates or Sublicensees of a Collaboration Product for which royalties
are payable under Article 3, Fuso shall make quarterly written reports to GenVec
within thirty (30) days after the end of each calendar quarter, stating in each
such report, by country, the number, description and aggregate Net

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Sales of such Collaboration Product sold during the calendar quarter.
Simultaneously with the delivery of each such report, Fuso shall pay to GenVec
the total royalties, if any, due to GenVec for the period of such report. If no
royalties are due, Fuso shall so report.

     4.2  PAYMENT METHOD; LATE PAYMENTS.  All amounts due GenVec hereunder shall
be paid in U.S. dollars by wire transfer in immediately available funds to an
account designated by GenVec. Any payments or portions thereof due hereunder
which are not paid on the date such payments are due under this Agreement shall
bear interest at a rate equal to the lesser of prime rate as reported by the
Chase Manhattan Bank, New York, plus * per year, or the maximum rate permitted
by law, calculated on the number of days such payment is delinquent, compounded
monthly.

     4.3  CURRENCY CONVERSION.  If any other currency conversion shall be
required in connection with the calculation of royalties hereunder, such
conversion shall be made using the exchange rate for conversion of the foreign
currency into U.S. Dollars, quoted for current transactions for buying U.S.
dollars, as reported in The Wall Street Journal for the last business day of the
calendar quarter to which such payment pertains.

     4.4  RECORDS; INSPECTION.  Fuso and its Affiliates shall keep (and cause
its Sublicensees to keep) complete, true and accurate books of account and
records for the purpose of determining the royalty amounts payable under Article
3. Such books and records shall be kept reasonably accessible for at least three
(3) years following the end of the calendar quarter to which they pertain. Such
records will be open for inspection during such three (3) year period by a
representative or agent of GenVec for the purpose of verifying the royalty
statements. Such inspections may be made no more than once each calendar year,
at reasonable times mutually agreed by Fuso and GenVec. GenVec's representative
or agent will be obliged to execute a reasonable confidentiality agreement prior
to commencing any such inspection. GenVec shall bear the costs and expenses of
inspections conducted under this Section 4.4 unless a variation or error
producing an underpayment in royalties payable exceeding * of the amount payable
for any quarter is established in the course of any such inspection, whereupon
all costs relating to the inspection and any unpaid amounts that are discovered
will be paid by Fuso, together with interest on such unpaid amounts at the rate
specified in Section 4.2 above.

     4.5  WITHHOLDING TAXES.

          4.5.1 ROYALTIES.  Any payments due GenVec by pursuant to Section 3.1
above shall be made after deduction for any withholding taxes or similar
governmental charge ("Withholding Tax") due thereon. Fuso shall provide GenVec a
certificate evidencing payment of any such Withholding Taxes. Notwithstanding
the foregoing, if such payments by GenVec would reduce the royalty received by
GenVec on any Net Sales below * (after such withholding or other governmental
charge), then Fuso shall pay to GenVec any such additional amounts as may be
necessary to provide GenVec a royalty of no less than * on such Net Sales (after
such withholding or other governmental charge). In such event, if GenVec
receives a tax credit from the U.S. Government for any such

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additional payments, then GenVec shall promptly notify Fuso and reimburse Fuso
for such amount. GenVec agrees to use reasonable efforts to obtain any available
tax credit.

          4.5.2 MILESTONES.  All payments required to be made to GenVec pursuant
to Section 3.2 shall be made after deduction for any withholding taxes or
similar governmental charge required by applicable law. Fuso shall promptly
inform GenVec of the amount and basis of any such deduction, and provide GenVec
a certificate evidencing payment of any such Withholding Taxes.

     4.6  SALES TAXES.  Any sales taxes (such as consumption tax or value added
tax), use taxes, transfer taxes, duties or similar governmental charges required
to be paid in connection with the transfer to Fuso of any Collaboration Products
manufactured by GenVec hereunder shall be the sole responsibility of Fuso. In
the event that GenVec is required to pay any such amounts, Fuso shall promptly
remit payment to GenVec of such amounts.

5.   COMMERCIALIZATION

     5.1  COLLABORATION PRODUCT DEVELOPMENT BY FUSO.  Except as expressly
provided otherwise in this Agreement, Fuso shall be responsible for all costs of
conducting development of Collaboration Product(s) in the Territory in
accordance with the applicable Development Plan(s), including, without
limitation expenses incurred in conducting clinical trials (e.g., clinical
trials in the Territory, and clinical trials conducted outside the Territory
which provide data for regulatory approvals in the Territory). In addition, Fuso
shall be responsible, at its sole expense, for all commercialization of such
Collaboration Product(s) in the Field in the Territory so long as Fuso retains
rights thereto under this Agreement. During the term of this Agreement, Fuso
shall keep GenVec fully informed of its activities subject to this Agreement
and, in addition, on or before January 31 of each year, Fuso shall provide
GenVec with a written report detailing such events and activities. When a
registration package requesting approval for commercial sale of any
Collaboration Product is first filed in any country within the Territory, and
when approval is received therefore, Fuso will immediately notify GenVec in
writing.

     5.2  DUE DILIGENCE.

          5.2.1 OPTION.  Fuso shall have the option to add both or either of
Korea and Taiwan to the Territory by notice to GenVec identifying the pertinent
country(ies) and Collaboration Product. Such option must be exercised with
respect to a particular Collaboration Product no later than the first
anniversary of the initiation of the first Phase II clinical trials of such
Collaboration Product in Japan. If Fuso fails to exercise such option with
respect to a particular Collaboration Product within the applicable period, or
Fuso's rights terminate in Japan with respect to a particular Collaboration
Product prior to the date that Fuso exercises its option for such Collaboration
Product, then Fuso shall lose its option with respect to such Collaboration
Product in Korea and Taiwan.

          5.2  REASONABLE EFFORTS.  Fuso shall use all reasonable efforts to:
(i) obtain regulatory approvals to market Collaboration Product(s) in each
country the Territory, and (ii) after obtaining regulatory approvals for such
Collaboration Product(s), launch such Collaboration

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Product(s) in each country in the Territory. Upon the launching of such
Collaboration Product(s), Fuso shall use reasonable efforts to promote and meet
the market demand therefor in the respective country(ies). In connection
therewith, Fuso shall use efforts not less than those efforts Fuso makes with
respect to its own pharmaceutical products of comparable commercial potential,
stage of development and patent protection.

          5.2.3 LACK OF DILIGENCE.  In the event that Fuso fails to use
reasonable efforts to exercise its diligence obligations under Section 5.2.2
with respect to a particular Collaboration Product as to a particular country of
the Territory, GenVec may terminate this Agreement with respect to such
Collaboration Product as to such country in accordance with Section 11.2. In
such event, GenVec shall thereafter have the exclusive rights to commercialize
such Collaboration Product in the said country, alone or with third parties.

          5.2.4 LICENSES.  In the event that any of Fuso's rights terminate with
respect to a particular Collaboration Product pursuant to Section 5.2.3 above,
at GenVec's request, Fuso shall grant to GenVec an exclusive (even as to Fuso),
fully-paid, royalty-free license, with the right to sublicense, under Fuso's
interest in any Joint Technology and Fuso Technology necessary or useful to
make, have made, import, use, offer for sale, sell and otherwise commercialize
such Collaboration Products in the Field in the said country.

     5.3  REGULATORY FILINGS.

          5.3.1 USE OF DOCUMENTS. Each party and its Affiliates, and, subject to
such party's obligations to third parties, its sublicensees, shall have the
right free of charge to refer to, access, cross reference, and use documents
relating to each Collaboration Product filed by a party or its Affiliates, its
licensees or Sublicensees with regulatory entities with respect to activities
conducted in connection with the Research Program, * and other supporting
information, and any written communications *

          5.3.2 OUTSIDE THE RESEARCH PROGRAM.  Subject to its obligations to
third parties, each party and its Affiliates and sublicensees, may in exchange
for reasonable consideration to be agreed by the parties, obtain the right to
refer to, access, cross reference, and use documents filed with regulatory
entities relating to each Collaboration Product, filed by a party or its
Affiliates or Sublicensees in agreed jurisdictions, with respect to activities
conducted outside the Research Program, *

     5.4  NO OTHER GENE THERAPY PRODUCTS.  Except as specifically provided in
this Agreement or otherwise agreed in writing, neither Fuso nor its
Affiliates or Sublicensees shall commercialize any gene therapy product
studied in the Research Program, except as a Collaboration Product in
accordance with this Agreement, which is identical or substantially similar
to a Product Configuration studied in the Research Program. As used herein,
"substantially similar" shall mean a *

     5.5  GENVEC COMMERCIALIZATION.

                                      -11-

<PAGE>

          5.5.1 GENVEC RESPONSIBILITIES.  Subject to Sections 2.3.1(b) and 2.4.2
of the Collaboration Agreement, GenVec shall be responsible, at its sole
expense, for conducting all development of any Collaboration Product outside the
Field, both in and outside the Territory (including, without limitation,
clinical trials), and all commercialization of such Collaboration Product
outside the Field, both in and outside the Territory.

          5.5.2 COMPETING PRODUCTS.  During the term of this Agreement,
GenVec agrees that it shall not directly or indirectly develop or
commercialize in the Retained Territory any Gene Therapy product identical or
substantially similar to a Product Configuration studied by the parties in
the Research Program which GenVec knows or reasonably should know would
compete with or be a substitute for a Collaboration Product being
commercialized by Fuso or its Affiliates or Sublicensees. As used herein,
"substantially similar" shall mean a product which *

     5.6  LIMITS ON COMPETING PRODUCTS.  During the term of this Agreement,
Fuso shall not directly or indirectly develop, manufacture, market, sell, or
otherwise distribute any Gene Therapy products or components within the Field
in the applicable Retained Territory, which could compete with the
Collaboration Products or appoint or license any third party to develop,
market, sell, or otherwise distribute any such gene therapy products or
components which could compete with Collaboration Products during the term of
this Agreement. Fuso further agrees that, during the term of this Agreement,
it shall not, directly or indirectly, develop, manufacture or commercialize
in and/or outside the Territory (except as a Collaboration Product pursuant
to this Agreement) any Gene Therapy product identical or substantially
similar to a Product Configuration studied by the parties in the Research
Program. As used herein, "substantially similar" shall mean *

     5.7  ACKNOWLEDGMENT.  It is understood and agreed that the provisions of
Sections 2.4.3, 2.4.4 and 2.4.5 of the Collaboration Agreement establish certain
limits on the development and commercialization activities of the parties with
respect to certain Product Configurations and Gene Therapy products.

     5.8  INOS PRODUCTS.  Notwithstanding any other provision of this Agreement
or the Collaboration Agreement, GenVec may develop and commercialize Gene
Therapy products containing the iNOS gene (or a fragment or derivative thereof)
for the treatment of cardiovascular disease or other non-cancer indications,
itself or with third parties. If GenVec or such third party reasonably believes
that the commercialization of a Collaboration Product containing the iNOS gene
(or a fragment or derivative thereof) or use in the Field may compete with or
adversely affect the sales of such a product, Fuso may not develop or
commercialize such a Collaboration Product without the prior written consent of
GenVec or a licensee of GenVec with rights to such product, which consent shall
not be unreasonably withheld.

                                      -12-

<PAGE>

6.   MANUFACTURING RIGHTS

     6.1 MANUFACTURE BY FUSO.

          6.1.1 CLINICAL TRIALS IN THE TERRITORY.  Fuso shall have the first
right, but not the obligation to manufacture Collaboration Products for use in
clinical trials and commercials sales in the Territory, on a Collaboration
Product-by-Collaboration Product basis, subject to GenVec's approval not to be
unreasonably withheld. GenVec's decision to approve or disapprove manufacturing
by Fuso shall be based on Fuso's ability to manufacture the applicable
Collaboration Product and/or the period Fuso may require to establish an
approved manufacturing facility. If Fuso elects not to manufacture such
Collaboration Products, or GenVec does not approve of manufacture of such
Collaboration Product by Fuso, GenVec shall have the first right, but not the
obligation to manufacture Collaboration Products for use in clinical trials and
commercial sales in the Territory, on a Collaboration Product-by-Collaboration
Product basis, subject to Fuso's approval, not to be unreasonably withheld.
Fuso's decision to approve or disapprove manufacturing by GenVec shall be based
on GenVec's ability to cost effectively manufacture the applicable Collaboration
Product. In the event that GenVec declines to manufacture a particular
Collaboration Product, or Fuso does not approve of the manufacture of such
Collaboration Product by GenVec, then, subject to Section 6.1.2, Fuso may select
a third party contract manufacturer ("Contract Manufacturer"), reasonably
acceptable to GenVec, to manufacture such Collaboration Product.

          6.1.2 CONTRACT MANUFACTURING.  If Fuso has Collaboration Products
manufactured by a Contract Manufacturer pursuant to Section 6.1.1 above, it will
require that such Contract Manufacturer sell the Collaboration Products produced
by it only to Fuso, its Affiliates or permitted Sublicensees. In addition (i)
such Contract Manufacturers shall agree in writing to be bound by the
confidentiality obligations set forth in Article 9 hereof as if they were a
party to this Agreement, (ii) Fuso shall notify the name and financial strength
of each Contract Manufacturer to GenVec prior to the commencement of the
contract manufacturing, and (iii) Fuso shall remain responsible to GenVec for
any failure by Contract Manufacturers to conform to such obligation.

          6.1.3 TRANSFER OF MANUFACTURING KNOW-HOW.  If Fuso manufactures
Collaboration Products pursuant to Section 6.1.1 above, the parties shall
negotiate in good faith the compensation to be paid to GenVec for the transfer
of process development and manufacturing know-how, and shall cooperate with each
other in order that Fuso may initiate manufacture of the Collaboration Product
as soon as practicable; provided, GenVec shall not be obligated to transfer any
manufacturing knowhow which is subject to a contractual obligation with a third
party.

          6.1.4 SUPPLY AGREEMENT.  If Fuso purchases Collaboration Products from
GenVec pursuant to Section 6.1.1, the parties shall promptly negotiate in good
faith the terms of a Supply Agreement which shall set forth the terms and
conditions of such supply. In the event the parties fail to enter into a written
Supply Agreement within six (6) months from the date that Fuso provides GenVec
notice of its wish to enter into such a Supply Agreement, or such longer period
as the parties may agree, then GenVec shall have no obligation to manufacture
the Collaboration Products for commercialization.

                                      -13-

<PAGE>

          6.1.5 SUPPLY TO GENVEC.  At GenVec's request, Fuso shall, at its
option, supply Collaboration Products to GenVec for use outside the Field and/or
outside the Territory, on terms to be agreed in good faith by the parties.

          6.1.6 OTHER GENVEC COLLABORATION PRODUCTS.  At GenVec's request, the
parties agree to conduct good faith negotiations regarding the appointment of
Fuso by GenVec as a contract manufacturer of other agreed GenVec products;
provided, however that GenVec shall be under no obligation to appoint Fuso as
its contract manufacturer, and Fuso shall be under no obligation to accept such
appointment, unless the parties mutually agree on terms and conditions governing
such appointment.

     6.2  FUSO RESPONSIBILITIES.  If Fuso undertakes to manufacture the
Collaboration Product, Fuso shall be responsible for all costs and liabilities
associated therewith. All Collaboration Products manufactured by or on behalf of
Fuso will conform with all MHW regulations and all applicable foreign laws and
regulations. Fuso shall keep GenVec fully informed of the Collaboration Product
manufacturing procedures and developments relating thereto and GenVec shall have
the right on reasonable prior notice to visit the manufacturing facility during
ordinary business hours and review any relevant records relating to
Collaboration Product manufacture (excluding records relating to the
manufacturer's own proprietary manufacturing processes).

     6.3  POST TERMINATION MANUFACTURING.  Following the termination of this
Agreement due to the expiration of Fuso's royalty obligations in all countries
in the Territory pursuant to Section 11.1 due to completion of the full payment
term, Fuso shall have the right to make and have made Collaboration Products.

7.   INTELLECTUAL PROPERTY

     7.1 OWNERSHIP OF INVENTIONS.

          7.1.1 RESEARCH PROGRAM TECHNOLOGY. Subject to Section 7.1.2 below, (i)
title to all inventions and intellectual property made solely by GenVec
employees or its agents (including researchers at DFCI) in connection with the
Research Program without inventive contribution by Fuso employees or its agents
shall be owned by GenVec; (ii) title to all inventions and intellectual property
made solely by Fuso employees or its agents (including researchers at Jikei
University) in connection with the Research Program without inventive
contribution by GenVec employees or its agents shall be owned by Fuso; and (iii)
title to all inventions and intellectual property made jointly by employees or
the agents of Fuso and GenVec in connection with the Research Program, shall be
jointly owned by GenVec and Fuso.

          7.1.2 GENE THERAPY TECHNOLOGY.  Notwithstanding Section 7.1.1
above, Title to all inventions and intellectual property which relates to
Gene Therapy made solely by GenVec employees or its agents (including
researchers at DFCI) or jointly by employees or the agents of Fuso and GenVec
in connection with the Research Program (in each case, "Gene Therapy
Technology") shall be owned by GenVec. Fuso hereby assigns to GenVec all its
right, title and interest it may otherwise hold in or to such Gene Therapy
Technology and any patent applications or

                                      -14-

<PAGE>

patents relating thereto. Fuso shall, at the request of GenVec, execute, and
deliver or cause to be delivered, all such consents, documents or further
instruments of assignment or transfer, and take or cause to be taken all such
actions GenVec reasonably deems necessary or desirable in order for GenVec to
obtain the full benefits of the assignment herein.

          7.1.3 INVENTORSHIP. Inventorship and rights of ownership of inventions
and other intellectual property rights conceived and/or reduced to practice in
connection with the Research Program shall be determined in accordance with the
patent and other intellectual property laws of the United States or Maryland, as
applicable, as long as the laws of the Territory permit application of such
laws. Subject to the licenses granted in Article 2, except as expressly provided
in this Agreement, it is understood that neither party shall have any obligation
to account to the other for profits, or to obtain any approval of the other
party to license or exploit a joint invention for applications outside of the
Field by reason of joint ownership of any such intellectual property.

     7.2  PATENT PROSECUTION

          7.2.1 SOLE INVENTIONS.  Fuso or GenVec, as the case may be, shall, be
responsible for preparing, filing, prosecuting and maintaining of the patent
applications and patents, solely owned by it, worldwide in such countries as it
deems appropriate, and conducting any interferences, reexaminations, reissues,
oppositions or requests for patent term extensions relating to the Fuso
Technology or GenVec Technology (respectively), using counsel of its choice, at
its expense; provided, such expenses may be included in the Research Program
funding described in Section 2.3 of the Collaboration Agreement.

          7.2.2 JOINT PATENT RIGHTS.

                (a) The parties will cooperate to file, prosecute and maintain
patent applications covering the Joint Invention(s) in the United States,
European Union (in Europe through a European Patent Convention application) and
Japan (collectively, the "Core Countries") and other countries agreed by the
parties. The parties shall agree which party shall be responsible for conducting
such activities with respect to a particular Joint Invention. The party
conducting such activities shall keep the other party fully informed as to the
status of such patent matters, including, without limitation, by providing the
other party the opportunity, at the other party's expense, to review and comment
on any documents relating to the Joint Invention which will be filed in any
patent office at least thirty (30) days before such filing, and promptly
providing the other party copies of any documents relating to Joint Invention
which the party conducting such activities receives from such patent offices,
including notice of all interferences, reissues, reexaminations, oppositions or
requests for patent term extensions. The parties will share equally all expenses
and fees associated with the filing, prosecution, issuance and maintenance of
any patent application and resulting patent for a Joint Invention in the Core
Countries and other agreed countries and such amounts shall be included within
the Research Program funding described in Section 2.3 of the Collaboration
Agreement.

                                      -15-

<PAGE>

          (b) In the event that either party wishes to seek patent protection
with respect to any Joint Invention outside the Core Countries, it shall notify
the other party hereto. If both parties wish to seek patent protection with
respect to such Joint Invention in such country or countries, activities shall
be subject to Section 7.2.2(a) above. If only one party wishes to seek patent
protection with respect to such Joint Invention in such country or countries, it
may file, prosecute and maintain patent applications and patents with respect
thereto, at its own expense. In any such case, the party declining to
participate in such activities shall not grant any third party a license under
its interest in the applicable Joint Invention in the applicable country or
countries without the prior written consent of the other party.

     7.3  ENFORCEMENT.

          7.3.1 SOLELY OWNED TECHNOLOGY.  Subject to 7.3.2 below, in the event
that any GenVec Technology or Fuso Technology (in this Section, both referred to
as "Technology") necessary for manufacture, use and sale of a Collaboration
Product is infringed or misappropriated by a third party in any country in the
Territory, or is subject to a declaratory judgment action arising from such
infringement in such country, Fuso or GenVec, as the case may be, shall promptly
notify the other party hereto. The party which owns or controls such Technology
(the "Owner") shall have the initial right (but not the obligation) to enforce
such Technology, or defend any declaratory judgment action with respect thereto,
at its expense. In the event that the Owner fails to initiate a suit to enforce
such Technology against a commercially significant infringement in the Field by
a third party in any jurisdiction in the Territory within * of a request by the
other party (the "Licensee") to do so, Licensee may, subject to the Owner's
agreements with third parties, initiate such suit in the name of the Owner of
such Technology against such infringement, at the expense of such Licensee. The
party involved in any such claim, suit or proceeding, shall keep the other party
hereto reasonably informed of the progress of any such claim, suit or
proceeding. Any recovery by such party received as a result of any such claim,
suit or proceeding shall be used first to reimburse such party for all expenses
(including attorneys and professional fees) incurred in connection with such
claim, suit or proceeding and if the party initiating the suit was the owner of
the subject Technology, all of the remainder shall be retained by such owner,
and if the party initiating the suit is the Licensee, * of the remainder shall
be paid to the owner of the subject Technology and * retained by the Licensee.

          7.3.2 JOINTLY OWNED TECHNOLOGY.  Notwithstanding 7.3.1 above, in the
event that any technology that is jointly owned by GenVec and Fuso under Section
7.1 of this Agreement is infringed or misappropriated by a third party, Fuso and
GenVec shall discuss whether, and, if so, how, to enforce such Joint Technology
or defend such Joint Technology in an infringement action, declaratory judgment
or other proceeding. In the event only one party wishes to participate in such
proceeding, it shall have the right to proceed alone, at its expense, and may
retain any recovery; provided, at the request and expense of the participating
party, the other party agrees to cooperate and join in any proceedings in the
event that a third party asserts that the co-owner of such Joint Invention is
necessary or indispensable to such proceedings.

     7.4  INFRINGEMENT CLAIMS.  If the manufacture, sale or use of any
Collaboration Product in the Territory pursuant to this Agreement results in any
claim, suit or proceeding alleging patent

                                      -16-

<PAGE>

infringement against GenVec or Fuso, such party shall promptly notify the other
party hereto. If Fuso is not named as a party in such a claim, suit or
proceeding, Fuso may, at its own expense and through counsel of its own choice,
seek leave to intervene in such claim, suit or proceeding. GenVec agrees not to
oppose such intervention. If Fuso, and not GenVec, is named as a party to such
claim, suit or proceeding, Fuso shall have the right to control the defense and
settlement of such claim, suit or proceeding, at its own expense, using counsel
of its own choice, however GenVec, at its own expense and through counsel of its
own choice, may seek to intervene if the claim, suit or proceeding relates to
the commercialization of the Collaboration Product in the Field, and in such
event, Fuso agrees not to oppose such intervention. If Fuso is named as a party
and GenVec shall, at any time, tender its defense to Fuso, then Fuso shall
defend GenVec in such claim, suit or proceeding, at Fuso's own expense and
through counsel of its own choice, and Fuso shall control the defense and
settlement of any such claim, suit or proceeding; provided, Fuso shall not enter
into any agreement which makes any admission regarding (i) wrongdoing on the
part GenVec, or (ii) the invalidity, unenforceability or absence of infringement
of any GenVec Patent Rights or patent claiming a Joint Invention, without the
prior written consent of GenVec, which consent shall not be unreasonably
withheld. The parties shall cooperate with each other in connection with any
such claim, suit or proceeding and shall keep each other reasonably informed of
all material developments in connection with any such claim, suit or proceeding.

8.   REPRESENTATIONS AND WARRANTIES

     8.1 WARRANTIES.

          8.1.1 GENVEC.  GenVec warrants and represents to Fuso that (i) it has
the full right and authority to enter into this Agreement and grant the rights
and licenses granted herein; (ii) as of the Effective Date, there are no
existing or threatened actions, suits or claims pending against it with respect
to the GenVec Technology or its right to enter into and perform its obligations
under this Agreement and (iii) it has not previously granted, and will not grant
during the term of this Agreement, any right, license or interest in or to
GenVec Technology or Joint Technology, or any portion thereof, which are in
conflict with the rights or licenses granted under this Agreement.

          8.1.2 FUSO. Fuso warrants and represents to GenVec that (i) it has the
full right and authority to enter into this Agreement, and (ii) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in or to Fuso Technology or Joint Technology, or any
portion thereof, which are in conflict with the rights or licenses granted under
this Agreement.

     8.2  EFFECT OF REPRESENTATIONS AND WARRANTIES.  It is understood that if
the representations and warranties under this Article 8 are not true and
accurate and GenVec or Fuso incurs liabilities, costs or other expenses as a
result of such falsity, GenVec or Fuso, as the case may be, shall indemnify,
defend and hold the other party harmless from and against any such liabilities,
costs or expenses incurred, provided that the indemnifying party receives prompt
notice of any claim against GenVec or Fuso, as the case maybe, resulting from or
related to such falsity, the cooperation of the

                                      -17-

<PAGE>

indemnified party, as requested in connection with any such claim, and the sole
right to control the defense or settlement thereof.

     8.3  DISCLAIMER OF WARRANTIES.  GENVEC AND FUSO EXPRESSLY DISCLAIM ANY
WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT
TO THE CONFIDENTIAL INFORMATION, OR FUSO TECHNOLOGY OR GENVEC TECHNOLOGY,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT,
OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF FUSO TECHNOLOGY OR GENVEC
TECHNOLOGY, PATENTED OR UNPATENTED, OR NON-INFRINGEMENT OF THE INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES.

9.   CONFIDENTIALITY

     9.1  CONFIDENTIAL INFORMATION.  Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for * years thereafter,
the receiving party shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose except for the purposes
contemplated by this Agreement any Confidential Information furnished to it by
the disclosing party hereto pursuant to this Agreement, except that to the
extent that it can be established by the receiving party by competent proof that
such Confidential Information:

          (a) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;

          (b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party;

          (c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving party in breach of this Agreement;

          (d) was independently developed by the receiving party without
reference to any information or materials disclosed by the disclosing party; or

          (e) was subsequently disclosed to the receiving party by a person
other than a party without breach of any legal obligation to the disclosing
party.

     9.2  PERMITTED DISCLOSURES.  Each party hereto may disclose the other's
Confidential Information to the extent such disclosure is reasonably necessary
in connection with the conduct of the Research Program activities to be
conducted at DFCI or Jikei University (or any other academic institution
approved by the Steering Committee), 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, *, or making a permitted sublicense or otherwise
exercising its rights hereunder, provided that if a party is required to make

                                      -18-

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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).

     9.3  NON-DISCLOSURE.  Each of the parties hereto agrees not to disclose to
any third party the financial terms of this Agreement without the prior written
consent of each other party hereto, except to advisors, investors and others on
a need to know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. Without limitation
upon any provision of this Agreement, each of the parties hereto shall be
responsible for the observance by its employees of the foregoing confidentiality
obligations. Notwithstanding the foregoing, the parties shall agree upon a press
release to announce the execution of this Agreement, together with a
corresponding Q&A outline for use in responding to inquiries about the
Agreement; thereafter, GenVec and Fuso may each disclose to third parties the
information contained in such press release and Q&A without the need for further
approval by the other.

10.  INDEMNIFICATION

     10.1 INDEMNIFICATION OF FUSO. GenVec shall indemnify Fuso and its
Affiliates, and their respective directors, officers, employees, agents and
counsel, and the successors and assigns of the foregoing (the "Fuso
Indemnitees"), harmless from and against any and all liabilities, damages,
losses, costs or expenses (including reasonable attorneys' and professional fees
and other expenses of litigation and/or arbitration) resulting from a claim,
suit or proceeding brought by a third party against a Fuso Indemnitee, arising
from or occurring as a result of; (i) GenVec's conduct of the Research Program,
(ii) the development, manufacture, marketing and/or commercialization of any
Collaboration Product by GenVec or its Affiliates or licensees (including
without limitation product liability claims), or (iii) the failure of
Collaboration Products manufactured by GenVec to meet the relevant
specifications, except, in each case, to the extent caused by the negligence or
willful misconduct of Fuso.

     10.2 INDEMNIFICATION OF GENVEC.  Fuso shall indemnify GenVec and its
Affiliates and their respective directors, officers, employees, agents and
counsel and the successors and assigns of the foregoing (the "GenVec
Indemnitees"), harmless from and against any and all liabilities, damages,
losses, costs or expenses (including reasonable attorneys' and professional fees
and other expenses of litigation and/or arbitration) resulting from a claim,
suit or proceeding brought by a third party against a GenVec Indemnitee, arising
from or occurring as a result of; (i) Fuso's conduct of the Research Program, or
(ii) the development, manufacture, marketing and/or commercialization of any
Collaboration Product by Fuso or its Affiliates or Sublicensees (including
without limitation, product liability claims), except, in each case, to the
extent caused by the negligence or willful misconduct of GenVec.

     10.3 PROCEDURE.  A party (the "Indemnitee") that intends to claim
indemnification under this Article 10 shall promptly notify the other party (the
"Indemnitor") in writing of any loss, claim,

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damage, liability or action in respect of which the Indemnitee or any of its
Affiliates, Sublicensees or their directors, officers, employees, agents or
counsel intend to claim such indemnification, and the Indemnitor shall have the
right to participate in, and, to the extent the Indemnitor so desires, to assume
the defense thereof with counsel mutually satisfactory to the parties. The
indemnity agreement in this Article 10 shall not apply to amounts paid in
settlement of any loss, claim, damage, liability or action if such settlement is
made without the consent of the Indemnitor, which consent shall not be withheld
unreasonably. The failure to deliver written notice to the Indemnitor within a
reasonable time after the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such Indemnitor of any liability to
the Indemnitee under this Article 10. At the Indemnitor's request, the
Indemnitee under this Article 10, and its employees and agents, shall cooperate
fully with the Indemnitor and its legal representatives in the investigation and
defense of any action, claim or liability covered by this indemnification and
provide full information with respect thereto.

11.  TERM AND TERMINATION

     11.1 TERM. This Agreement shall be effective as of the Effective Date and,
unless otherwise terminated earlier pursuant to the other provisions of this
Article 11, shall continue in full force and effect on a Collaboration Product-
by-Collaboration Product and country-by-country basis until the date Fuso and
its Affiliates and Sublicensees has no remaining royalty obligations in such
country. Following the expiration of royalty obligations in any country, Fuso
shall have a non-exclusive, non-transferable, fully paid license under the
GenVec Know-How solely to commercialize the Collaboration Product in the Field
in such country.

     11.2 TERMINATION FOR CAUSE.  Either party may terminate this Agreement in
the event the other party has materially breached or defaulted in the
performance of any of its obligations hereunder, and such default has continued
for sixty (60) days after written notice thereof was provided to the breaching
party by the nonbreaching party. Any termination shall become effective at the
end of such sixty (60) day period unless the breaching party has cured any such
breach or default prior to the expiration of the sixty (60) day period.
Notwithstanding the above, in the case of a failure to pay any amount due
hereunder the period for cure of any such default following notice thereof shall
be ten (10) days and, unless payment is made within such period, the termination
shall become effective at the end of such period.

     11.3 TERMINATION FOR INSOLVENCY.  If voluntary or involuntary proceedings
by or against a party are instituted in bankruptcy under any insolvency law, or
a receiver or custodian is appointed for such party, or proceedings are
instituted by or against such party for corporate reorganization or the
dissolution of such party, which proceedings, if involuntary, shall not have
been dismissed within sixty (60) days after the date of filing, or if such party
makes an assignment for the benefit of creditors, or substantially all of the
assets of such party are seized or attached and not released within sixty (60)
days thereafter, the other party may immediately terminate this Agreement
effective upon notice of such termination.

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     11.4 PERMISSIVE TERMINATION.  After the second anniversary of the Effective
Date, Fuso may, at its sole discretion, terminate this Agreement at any time
with ninety (90) days prior notice.

     11.5 TERMINATION RELATING TO SALES OF COMPETING COLLABORATION PRODUCTS.
GenVec may, at its sole discretion, terminate this Agreement with ninety (90)
days notice in the event of any breach by Fuso of Section 5.6.

     11.6 EFFECT OF BREACH OR TERMINATION.

          11.6.1  ACCRUED 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.

          11.6.2  RETURN OF MATERIALS.  Upon any termination of this Agreement,
Fuso and GenVec shall promptly return to the other party all materials and
Confidential Information (except as provided in 11.1 above) received from the
other party (except one copy of which may be retained by legal counsel for
archival purposes).

          11.6.3  STOCK ON HAND. In the event this Agreement is terminated for
any reason, Fuso and its Affiliates and Sublicensees shall have the right to
sell or otherwise dispose of the stock of any Collaboration Products then on
hand subject to Articles 3 and 4 and the other applicable terms of this
Agreement.

          11.6.4  LICENSES.

                  (a) The licenses granted Fuso herein shall terminate in the
event of a termination pursuant to Section 11.2 or 11.3, or any termination of
the Research Program by Fuso prior to the second anniversary of the Effective
Date. In the event of a termination of the Research Program by Fuso after the
second anniversary of the Effective Date, the licenses granted Fuso shall remain
in effect, subject to the terms and conditions herein, with respect to all
Collaboration Products designated by the Steering Committee prior to the
effective date of such termination.

                  (b) The licenses granted to GenVec in Section 2.3 shall
terminate only in the event of a termination by Fuso pursuant to Section 11.2 or
11.3.

                  (c) If more than one Collaboration Product is being
commercially developed or exploited by Fuso or its Affiliates and Sublicensees
hereunder and GenVec terminates this Agreement pursuant to Section 11.2 due to a
breach relating only to a single Collaboration Product, or pursuant to Section
11.5 due to a particular competing product, then GenVec shall be entitled to
terminate this Agreement only with respect to the applicable Collaboration
Product.

                                      -21-

<PAGE>

     11.7  SURVIVAL.  Sections 2.4, 2.5, 2.6, 5.2.3, 5.3, 5.4, 6.4, 7.1, 7.2.2,
7.3.2, 11.6 and 11.7 and Articles 4, 8, 9, 10, 12 and 13 shall survive the
expiration or termination of this Agreement for any reason.

12.  DISPUTE RESOLUTION

     12.1 MEDIATION.  If a dispute arises out of or relates to this Agreement,
or the breach thereof, and if said dispute cannot be settled through
negotiation, the parties agree first to try in good faith to settle the dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association before resorting to arbitration.

     12.2 ARBITRATION.  Any dispute under this Agreement (except any dispute
relating to the validity or enforceability of any patent) which is not settled
by mutual consent shall be finally settled by binding arbitration. Such
arbitration shall be conducted in accordance with the International Arbitration
Rules of the Asia/Pacific Center by three (3) arbitrators appointed in
accordance with said rules and held in San Francisco, California. At least one
of the arbitrators shall be an independent expert in pharmaceutical product
development (including clinical development and regulatory affairs). The
arbitrators shall determine what discovery will be permitted, consistent with
the goal of limiting the cost and time which the parties must expend for
discovery; provided the arbitrators shall permit such discovery as they deem
necessary to permit an equitable resolution of the dispute. Any written evidence
originally in a language other than English shall be submitted in English
translation accompanied by the original or a true copy thereof. The costs of the
arbitration including administrative and arbitrators' fees, shall be shared
equally by the parties and each party shall bear its own costs and attorneys'
and witness' fees incurred in connection with the arbitration. A disputed
performance or suspended performances pending the resolution of the arbitration
must be completed within thirty (30) days following the final decision of the
arbitrators or such other reasonable period as the arbitrators determine in a
written opinion. Any arbitration subject to this Article shall be completed
within one (1) year from the filing of notice of a request for such arbitration.
No punitive damages may be granted by the arbitrators. The arbitration
proceedings and the decision shall not be made public without the joint consent
of the parties and each party shall maintain the confidentiality of such
proceedings and decision unless otherwise permitted by the other party. The
parties agree that the decision shall be the sole, exclusive and binding remedy
between them regarding any and all disputes, controversies, claims and
counterclaims presented to the arbitrators. Any award may be entered in a court
of competent jurisdiction for a judicial recognition of the decision and an
order of enforcement.

13.  MISCELLANEOUS

     13.1 GOVERNING LAW.  This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed in accordance
with the laws of the State of California, without reference to conflicts of laws
principles.

     13.2 WAIVER.  Neither party may waive or release any of its rights or
interests in this Agreement except in writing.  The failure of either party to
assert a right hereunder or to insist upon

                                      -22-

<PAGE>

compliance with any term or condition of this Agreement shall not constitute a
waiver of that right or excuse a similar subsequent failure to perform any such
term or condition.

     13.3 ASSIGNMENT.  This Agreement shall not be assignable by either party to
any third party hereto without the written consent of the other party hereto;
except either party may assign this Agreement, without such consent, to (i) an
Affiliate of such party; or (ii) an entity that acquires all or substantially
all of the business or assets of such party to which this Agreement pertains,
whether by merger, reorganization, acquisition, sale, or otherwise and that
agrees in writing to be strictly bound by the terms and conditions of this
Agreement. The terms and conditions of this Agreement shall be binding on and
inure to the benefit of the permitted successors and assigns of the parties.

     13.4 NOTICES.  Any notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by international
express delivery service, registered or certified mail, return receipt
requested, postage prepaid, in each case to the respective address specified
below, or such other address as may be specified in writing to the other parties
hereto:

     FUSO:               Fuso Pharmaceutical Industries, Ltd
                         3-11, 2-Chome, Morinomiya, Joto-ku
                         Osaka 536, Japan
                         Attn: President

     With a copy to:     Director, Research and Development Center

     GENVEC:             GenVec, Inc.
                         12111 Parklawn Drive
                         Rockville, Maryland 20852
                         Attn: President

     With a copy to:     Vice President, Corporate Development

     13.5 PERFORMANCE WARRANTY.  Fuso and GenVec hereby respectively warrant and
guarantee the performance of any and all rights and obligations of this
Agreement by their Affiliate(s), Sublicensees, and sublicensees.

     13.6 FORCE MAJEURE.  Neither party shall be liable to the other for failure
or delay in the performance of any of its obligations under this Agreement for
the time and to the extent such failure or delay is caused by earthquake, riot,
civil commotion, war, hostilities between nations, governmental law, order or
regulation, embargo, action by the government or any agency thereof, act of God,
storm, fire, accident, labor dispute or strike, sabotage, explosion or other
similar or different contingencies, in each case, beyond the reasonable control
of the respective party. The party affected by Force Majeure shall provide the
other party with full particulars thereof as soon as it becomes aware of the
same (including its best estimate of the likely extent and duration of the
interference with its activities), and will use its best endeavors to overcome
the difficulties created thereby and to

                                      -23-

<PAGE>

resume performance of its obligations as soon as practicable. If the performance
of any obligation under this Agreement is delayed owing to a force majeure for
any continuous period of more than six (6) months, the parties hereto shall
consult with respect to an equitable solution including the possible termination
of this Agreement.

     13.7 INDEPENDENT CONTRACTORS.  Nothing contained in this Agreement is
intended implicitly, or is to be construed, to constitute Fuso or GenVec as
partners in the legal sense. No party hereto shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of any other party or to bind any other party to any contract, agreement or
undertaking with any third party.

     13.8 ADVICE OF COUNSEL.  GenVec and Fuso have each consulted counsel of
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.

     13.9 OTHER OBLIGATIONS.  Except as expressly provided in this Agreement or
as separately agreed upon in writing between GenVec and Fuso, each party shall
bear its own costs incurred in connection with the implementation of the
obligations under this Agreement.

     13.10 INDEPENDENT RESEARCH.  Except as expressly provided for herein or in
the Collaboration Agreement, each party acknowledges and agrees that Fuso and
GenVec shall have the right to engage in their own research and development
activities outside the Research Program. Neither party shall, by virtue of this
Agreement, have any right, title or interest in or to such independent
activities or to the income or profits derived therefrom.

     13.11 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; provided, if
the parties are unable to agree on such a substitute clause and the deletion of
the provision held invalid or unenforceable would produce material adverse
financial consequences for one party, such party shall have the right to
terminate the Agreement with one hundred eighty (180) days notice.

     13.12 PATENT MARKING.  Fuso agrees to mark and have its Affiliates and
Sublicensees mark all Collaboration Products they sell or distribute pursuant to
this Agreement in accordance with the applicable statute or regulations in the
country or countries of manufacture and sale thereof.

     13.13 FURTHER ASSURANCES. At any time or from time to time on and after the
date of this Agreement, either party shall at the request of the other party (i)
deliver to the requesting party such records, data or other documents consistent
with the provisions of this Agreement, (ii) execute, and deliver or cause to be
delivered, all such consents, documents or further instruments of assignment,
transfer or license, and (iii) take or cause to be taken all such actions, as
the requesting party may

                                      -24-

<PAGE>

reasonably deem necessary or desirable in order for the requesting party to
obtain the full benefits of this Agreement and the transactions contemplated
hereby.

     13.14 TRADEMARKS.  Fuso and its Affiliates shall have the right to market
the Collaboration Product under their own labels and trademark(s). All
Collaboration Product packages shall carry the notice "Licensed from GenVec,
Inc." or a similar slogan, in a typeface and size agreed by the parties.

     13.15 FOREIGN CORRUPT PRACTICES ACT.  In conformity with the United States
Foreign Corrupt Practices Act, Fuso and its employees and agents shall not
directly or indirectly make any offer, payment, promise to pay, or authorize
payment, or offer a gift, promise to give, or authorize the giving of anything
of value for the purpose of influencing an act or decision of an official of any
government within the Territory or the United States Government (including a
decision not to act) or inducing such official to use his influence to affect
any such governmental act or decision in order to obtain, retain, or direct any
such business.

     13.16 EXPORT LAWS.  Notwithstanding anything to the contrary contained
herein, all obligations of GenVec and Fuso are subject to prior compliance with
United States export regulations and such other United States and Japanese laws
and regulations as may be applicable, and to obtaining all necessary approvals
required by the applicable agencies of the government of the United States or
Japan. GenVec and Fuso, respectively, shall each use its best efforts to obtain
such approvals from its own government. Each party shall cooperate with the
other party and shall provide assistance to the other party as reasonably
necessary to obtain any required approvals.

     13.17 APPROVALS.  Each party shall be responsible, at its expense, for
obtaining any approvals from its own government which may be required under
applicable law, and shall use its best efforts to obtain all necessary approvals
as soon as possible after the execution of this Agreement.

     13.18 ENTIRE AGREEMENT.  This Agreement together with the attached Exhibit,
and the Collaboration Agreement and the Stock Purchase Agreement entered by the
parties of even date herewith, constitute the entire agreement, both written or
oral, with respect to the subject matter hereof, and supersede all prior or
contemporaneous understandings or agreements, whether written or oral, between
Fuso and GenVec with respect to such subject matter.

     13.19 HEADINGS.  The captions to the several Sections and Articles hereof
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.

                                      -25-

<PAGE>

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

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the Effective Date.

FUSO PHARMACEUTICAL INDUSTRIES, LTD.     GENVEC, INC.

By:                                      By:
    ---------------------------------        --------------------------------
Name:                                    Name:
      -------------------------------          ------------------------------
Title:                                   Title:
       ------------------------------           -----------------------------

                                      -26-
<PAGE>

                                  EXHIBIT A

                        GENVEC JAPANESE PATENT RIGHTS

                                       *<PAGE>

                              PUBLIC HEALTH SERVICE

                       PATENT LICENSE AGREEMENT--EXCLUSIVE

                                   COVER PAGE

For PHS internal use only:

         Patent License Number:

         L-180-97/0
         ----------

         Serial Number(s) of Licensed Patent(s) and/or Patent Application(s):

         USSN 08/367,841 08/520,373; 07/894,215 and U.S. Patent 5,840,686
         ----------------------------------------------------------------

         Licensee:

         Gen Vec, Inc.
         -------------

         Cooperative Research and Development Agreement (CRADA) Number (if
         applicable):

         None
         ----

         Additional Remarks:

         Subject to L-221-94/2 Interinstitutional Agreement with the University
         of Southern
         -----------------------------------------------------------------------
         California
         ----------

         Public Benefit(s):

         Licensee has agreed to set up an indigent access program or include
         -------------------------------------------------------------------
         Licensed Products in an existing indigent access program
         --------------------------------------------------------

This Patent License Agreement, hereinafter referred to as the AGREEMENT consists
of this Cover Page, an attached AGREEMENT, a Signature Page, Appendix A (List of
Patent(s) and/or Patent Application(s)), Appendix B (Fields of Use and
Territory), Appendix C (Royalties), Appendix D (Modifications), Appendix E
(Benchmarks), and Appendix F (Commercial Development Plan). The Parties to this
AGREEMENT are:

         1)       The National Institutes of Health ("NIH"), the Centers for
                  Disease Control and Prevention ("CDC"), or the Food and Drug
                  Administration ("FDA"), hereinafter singly or collectively
                  referred to as PHS, agencies of the United States Public
                  Health Service within the Department of Health and Human
                  Services (DHHS); and

         2)       The person, corporation, or institution identified above
                  and/or on the Signature Page, having offices at the address
                  indicated on the Signature Page, and its AFFILIATES as defined
                  herein in Paragraph 2.15, hereinafter referred to as LICENSEE.

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
Model 980611 Page 1 of 38 Final GenVec, Inc. January 7, 2000

[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
      WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
      RESPECT TO THE OMITTED PORTIONS. OMITTED TEXT IS INDICATED BY A "*".

<PAGE>

                     PHS PATENT LICENSE AGREEMENT-EXCLUSIVE

PHS and LICENSEE agree as follows:

1        BACKGROUND
         ----------

         1.01     In the course of conducting biomedical and behavioral
                  research, PHS investigators made inventions that may have
                  commercial applicability.

         1.02     By assignment of rights from PHS employees and other
                  inventors, DHHS, on behalf of the United States Government,
                  owns intellectual property rights claimed in any United States
                  and/or foreign patent applications or patents corresponding to
                  the assigned inventions. DHHS also owns any tangible
                  embodiments of these inventions actually reduced to practice
                  by PHS.

         1.03     The Secretary of DHHS has delegated to PHS the authority to
                  enter into this Agreement for the licensing of rights to these
                  inventions.

         1.04     PHS desires to transfer these inventions to the private sector
                  through commercialization licenses to facilitate the
                  commercial development of products and processes for public
                  use and benefit.

         1.05     LICENSEE desires to acquire commercialization rights to
                  certain of these inventions in order to develop processes,
                  methods, and/or marketable products for public use and
                  benefit.

2.       DEFINITIONS
         -----------

         2.01     "BENCHMARKS" mean the performance milestones that are set
                  forth in Appendix E.

         2.02     "COMMERCIAL DEVELOPMENT PLAN" means the written
                  commercialization plan attached as Appendix F.

         2.03     "FIRST COMMERCIAL SALE" means the initial transfer by or on
                  behalf of LICENSEE or its sublicensees of LICENSED PRODUCTS or
                  the initial practice of a LICENSED PROCESS by or on behalf of
                  Licensee or its sublicensees in exchange for cash or some
                  equivalent to which value can be assigned for the purpose of
                  determining NET SALES.

         2.04     "GOVERNMENT" means the Government of the United States of
                  America.

         2.05     "LICENSED FIELDS OF USE" means the fields of use identified in
                  Appendix B.

         2.06     "LICENSED PATENT RIGHTS" shall mean:

                  a)       Patent applications (including provisional patent
                           applications and PCT patent applications) and/or
                           patents listed in Appendix A, all divisions and
                           continuations of these applications, all patents
                           issuing from such applications, divisions, and
                           continuations, and any reissues, reexaminations, and
                           extensions of all such patents;

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
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<PAGE>

                  b)       to the extent that the following contain one or more
                           claims directed to the invention or inventions
                           disclosed in a) above: i) continuations-in-part of a)
                           above; ii) all divisions and continuations of these
                           continuations-in-part; iii) all patents issuing from
                           such continuations-in-part, divisions, and
                           continuations; iv) priority patent application(s) of
                           a) above; and v) any reissues, reexaminations, AND
                           EXTENSIONS OF ALL SUCH PATENTS,

                  c)       to the extent that the following contain one or more
                           claims directed to the invention or inventions
                           disclosed in a) above: all counterpart foreign and
                           U.S. patent applications and patents to a) and b)
                           above, including those listed in Appendix A.

                  LICENSED PATENT RIGHTS shall not include b) or c) above to the
                  extent that they contain one or more claims directed to new
                  matter which is not the subject matter disclosed in a) above.

         2.07     "LICENSED PROCESS(ES)" means processes which, in the course of
                  being practiced would, in the absence of this AGREEMENT,
                  infringe one or more claims of the Licensed Patent Rights that
                  have not been held invalid or unenforceable by an unappealed
                  or unappealable judgment of a court of competent jurisdiction.

         2.08     "LICENSED PRODUCT(S)" means tangible materials which, in the
                  course of manufacture, use, offer to sell, sale, or
                  importation would, in the absence of this AGREEMENT, infringe
                  one or more claims of the LICENSED PATENT RIGHTS that have not
                  been held invalid or unenforceable by an unappealed or
                  unappealable judgment of a court of competent jurisdiction.

         2.09     "LICENSED TERRITORY" means the geographical area identified in
                  Appendix B.

         2.10     "NET SALES" means the total gross receipts for sales of
                  LICENSED PRODUCTS or practice of LICENSED PROCESSES by or on
                  behalf of LICENSEE or its sublicensees, and from leasing,
                  renting, or otherwise making LICENSED PRODUCTS available to
                  others without sale or other dispositions, whether invoiced or
                  not, less returns and allowances, packing costs, insurance
                  costs, freight out, taxes or excise duties imposed on the
                  transaction (if separately invoiced), and wholesaler and cash
                  discounts in amounts customary in the trade to the extent
                  actually granted. No deductions shall be made for commissions
                  paid to individuals, whether they be with independent sales
                  agencies or regularly employed by LICENSEE, or sublicensees,
                  and on its payroll, or for the cost of collections.

         2.11     "PRACTICAL APPLICATION" means to manufacture in the case of a
                  composition or product, to practice in the case of a process
                  or method, or to operate in the case of a machine or system;
                  and in each case, under such conditions as to establish that
                  the invention is being utilized and that its benefits are to
                  the extent permitted by law or GOVERNMENT regulations
                  available to the public on reasonable terms.

         2.12     "RESEARCH LICENSE" means a nontransferable, nonexclusive
                  license to make and to use the LICENSED PRODUCTS or LICENSED
                  PROCESSES as defined by the LICENSED PATENT RIGHTS for
                  purposes of research and not for purposes of commercial
                  manufacture or distribution or in lieu of purchase.

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
Model 980611 Page 3 of 38 Final GenVec, Inc. January 7, 2000

<PAGE>

3.       GRANT OF RIGHTS
         ---------------

         3.01     PHS hereby grants and LICENSEE accepts, subject to the terms
                  and conditions of this Agreement, an exclusive license under
                  the LICENSED PATENT RIGHTS in the LICENSED TERRITORY to make
                  and have made, to use and have used, to sell and have sold, to
                  offer to sell, and to import any LICENSED PRODUCTS in the
                  LICENSED FIELDS OF USE and to practice and have practiced any
                  LICENSED PROCESSES in the LICENSED FIELDS OF USE.

         3.02     This AGREEMENT confers no license or rights by implication,
                  estoppel, or otherwise under any patent applications or
                  patents of PHS other than LICENSED PATENT RIGHTS regardless of
                  whether such patents are dominant or subordinate to LICENSED
                  PATENT RIGHTS.

4.       SUBLICENSING
         ------------

         4.01     Upon written approval by PHS, which approval will not be
                  unreasonably withheld, LICENSEE may enter into sublicensing
                  agreements under the LICENSED PATENT RIGHTS.

         4.02     LICENSEE agrees that any sublicenses granted by it shall
                  provide that the obligations to PHS of Paragraphs 5.01-5.04,
                  8.01, 10.01, 10.02, 12.05, and 13.07-13.09 of this AGREEMENT
                  shall be binding upon the sublicensee as if it were a party to
                  this AGREEMENT. LICENSEE further agrees to attach copies of
                  these Paragraphs to all sublicense agreements.

         4.03     Any sublicenses granted by LICENSEE shall provide for the
                  termination of the sublicense, or the conversion to a license
                  directly between such sublicensees and PHS, at the option of
                  the sublicensee, upon termination of this AGREEMENT under
                  Article 13. Such conversion is subject to PHS approval and
                  contingent upon acceptance by the sublicensee of the remaining
                  provisions of this AGREEMENT.

         4.04     LICENSEE agrees to forward to PHS a copy of each fully
                  executed sublicense agreement postmarked within thirty (30)
                  days of the execution of such agreement. To the extent
                  permitted by law, PHS agrees to maintain each such sublicense
                  agreement in confidence.

5.       STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS
         -------------------------------------------------------------

         5.01              (a) PHS reserves on behalf of the Government an
                           irrevocable, nonexclusive, nontransferable,
                           royalty-free license for the practice of all
                           inventions licensed under the LICENSED PATENT RIGHTS
                           throughout the world by or on behalf of the
                           Government and on behalf of any foreign government or
                           international organization pursuant to any existing
                           or future treaty or agreement to which the Government
                           is a signatory. Prior to the FIRST COMMERCIAL SALE,
                           LICENSEE agrees to provide PHS reasonable quantities
                           of LICENSED PRODUCTS or materials made through the
                           LICENSED PROCESSES for PHS research use.

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
Model 980611 Page 4 of 38 Final GenVec, Inc. January 7, 2000

<PAGE>

                  (b)      In the event that Licensed Patent Rights are Subject
                           Inventions made under a Cooperative Research and
                           Development Agreement (CRADA), LICENSEE grants to the
                           Government, pursuant to 15 U.S.C. 3710a(b)(1)(A), a
                           nonexclusive, nontransferable, irrevocable, paid-up
                           license to practice LICENSED PATENT RIGHTS OR HAVE
                           LICENSED PATENT RIGHTS practiced throughout the world
                           by or on behalf of the Government. In the exercise of
                           such license, the Government shall not publicly
                           disclose trade secrets or commercial or financial
                           information that is privileged or confidential within
                           the meaning of 5 U.S.C. 552(b)(4) or which would be
                           considered as such if it had been obtained from a
                           non-Federal party. Prior to the FIRST COMMERCIAL
                           SALE, LICENSEE agrees to provide PHS reasonable
                           quantities of LICENSED PRODUCTS or materials made
                           through the LICENSED PROCESSES for PHS research use.

         5.02     LICENSEE agrees that products used or sold in the United
                  States embodying LICENSED PRODUCTS or produced through use of
                  LICENSED PROCESSES shall be manufactured substantially in the
                  United States, unless a written waiver is obtained in advance
                  from PHS.

         5.03     LICENSEE acknowledges that PHS may enter into future
                  Cooperative Research and Development Agreements (CRADAs) under
                  the Federal Technology Transfer Act of 1986 that relate to the
                  subject matter of this AGREEMENT. LICENSEE agrees not to
                  unreasonably deny requests for a RESEARCH LICENSE from such
                  future collaborators with PHS when acquiring such rights is
                  necessary in order to make a Cooperative Research and
                  Development Agreement (CRADA) project feasible. LICENSEE may
                  request an opportunity to join as a party to the proposed
                  Cooperative Research and Development Agreement (CRADA).

         5.04     (a)      In addition to the reserved license of Paragraph
                           5.01 above, PHS reserves the right to grant
                           nonexclusive Research Licenses directly or to require
                           LICENSEE to grant nonexclusive Research Licenses on
                           reasonable terms. The purpose of this Research
                           License is to encourage basic research, whether
                           conducted at an academic or corporate facility. In
                           order to safeguard the LICENSED PATENT RIGHTS,
                           however, PHS shall consult with LICENSEE before
                           granting to commercial entities a Research License or
                           providing to them research samples of materials made
                           through the LICENSED PROCESSES.

PHS Patent License Agreement--Exclusive CONFIDENTIAL L-180-97/0
Model 980611 Page 5 of 38 Final GenVec, Inc. January 7, 2000

<PAGE>

                  (b)      In exceptional circumstances, and in the event that
                           LICENSED PATENT RIGHTS are Subject Inventions made
                           under a Cooperative Research and Development
                           Agreement (CRADA), the Government, pursuant to 15
                           U.S.C. 3710a(b)(1)(B), retains the right to require
                           the LICENSEE to grant to a responsible applicant a
                           nonexclusive, partially exclusive, or exclusive
                           sublicense to use LICENSED PATENT RIGHTS IN
                           LICENSEE'S field of use on terms that are reasonable
                           under the circumstances; or if Licensee fails to
                           grant such a license, the Government retains the
                           right to grant the license itself. The exercise of
                           such rights by the Government shall only be in
                           exceptional circumstances and only if the Government
                           determines (i) the action is necessary to meet health
                           or safety needs that are not reasonably satisfied by
                           LICENSEE; (ii) the action is necessary to meet
                           requirements for public use specified by Federal
                           regulations, and such requirements are not reasonably
                           satisfied by the Licensee; or (iii) the Licensee has
                           failed to comply with an agreement containing
                           provisions described in 15 U.S.C. 3710a(c)(4)(B). The
                           determination made by the Government under this
                           Article is subject to administrative appeal and
                           judicial review under 35 U.S.C. 203(2).

6.       ROYALTIES AND REIMBURSEMENT
         ---------------------------

         6.01     LICENSEE agrees to pay to PHS a noncreditable, nonrefundable
                  license issue royalty as set forth in Appendix C within thirty
                  (30) days from the date that this AGREEMENT becomes effective.

         6.02     LICENSEE agrees to pay to PHS a nonrefundable minimum annual
                  royalty as set forth in Appendix C. The minimum annual royalty
                  is due and payable on January 1 of each calendar year and may
                  be credited against any earned royalties due for sales made in
                  that year. The minimum annual royalty due for the first
                  calendar year of this AGREEMENT may be prorated according to
                  the fraction of the calendar year remaining between the
                  effective date of this AGREEMENT and the next subsequent
                  January 1.

         6.03     LICENSEE agrees to pay PHS earned royalties as set forth in
                  Appendix C.

         6.04     LICENSEE agrees to pay PHS benchmark royalties as set forth in
                  Appendix C.

         6.05     LICENSEE agrees to pay PHS sublicensing royalties as set forth
                  in Appendix C.

         6.06     A patent or patent application licensed under this AGREEMENT
                  shall cease to fall within the LICENSED PATENT RIGHTS for the
                  purpose of computing earned royalty payments in any given
                  country on the earliest of the dates that a) the application
                  has been abandoned and not continued, b) the patent expires or
                  irrevocably lapses, or c) the claim has been held to be
                  invalid or unenforceable by an unappealed or unappealable
                  decision of a court of competent jurisdiction or
                  administrative agency.

         6.07     No multiple royalties shall be payable because any LICENSED
                  PRODUCTS OR LICENSED PROCESSES are covered by more than one of
                  the LICENSED PATENT RIGHTS.

         6.08     On sales of LICENSED PRODUCTS by LICENSEE to sublicensees or
                  on sales made in other than an arm's-length transaction, the
                  value of the NET SALES attributed under this Article 6 to such
                  a transaction shall be that which would have been received in
                  an arm's-length transaction, based on sales of like quantity
                  and quality products on or about the time of such transaction.

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
Model 980611 Page 6 of 38 Final GenVec, Inc. January 7, 2000

<PAGE>

         6.09     With regard to expenses associated with the preparation,
                  filing, prosecution, and maintenance of all patent
                  applications and patents included within the LICENSED PATENT
                  RIGHTS incurred by PHS prior to the effective date of this
                  AGREEMENT, LICENSEE shall pay to PHS, as an additional
                  royalty, within sixty (60) days of PHS's submission of a
                  statement and request for payment to LICENSEE, an amount
                  equivalent to such patent expenses previously incurred by PHS.

         6.10     With regard to expenses associated with the preparation,
                  filing, prosecution, and maintenance of all patent
                  applications and patents included within the LICENSED PATENT
                  RIGHTS incurred by PHS on or after the effective date of this
                  AGREEMENT, PHS, at its sole option, may require LICENSEE:

                  (a) to pay PHS on an annual basis, within sixty (60) days of
                  PHS's submission of a statement and request for payment, a
                  royalty amount equivalent to all such patent expenses incurred
                  during the previous calendar year(s); or

                  (b) to pay such expenses directly to the law firm employed by
                  PHS to handle such functions. However, in such event, PHS and
                  not LICENSEE shall be the client of such law firm.

                  In limited circumstances, LICENSEE may be given the right to
                  assume responsibility for the preparation, filing,
                  prosecution, or maintenance of any patent application or
                  patent included with the LICENSED PATENT RIGHTS. In that
                  event, LICENSEE shall directly pay the attorneys or agents
                  engaged to prepare, file, prosecute, or maintain such patent
                  applications or patents and shall provide to PHS copies of
                  each invoice associated with such services as well as
                  documentation that such invoices have been paid.

         6.11     LICENSEE may elect to surrender its rights in any country of
                  the LICENSED TERRITORY under any LICENSED PATENT RIGHTS upon
                  ninety (90) days written notice to PHS and owe no payment
                  obligation under Article 6.10 for patent-related expenses
                  incurred in that country after ninety (90) days of the
                  effective date of such written notice.

7.       PATENT FILING, PROSECUTION, AND MAINTENANCE
         -------------------------------------------

         7.01     Except as otherwise provided in this Article 7, PHS agrees to
                  take responsibility for, but to consult with, the LICENSEE in
                  the preparation, filing, prosecution, and maintenance of any
                  and all patent applications or patents included in the
                  LICENSED PATENT RIGHTS and shall furnish copies of relevant
                  patent-related documents to LICENSEE.

         7.02     Upon PHS's written request, LICENSEE shall assume the
                  responsibility for the preparation, filing, prosecution, and
                  maintenance of any and all patent applications or patents
                  included in the LICENSED PATENT RIGHTS and shall on an ongoing
                  basis promptly furnish copies of all patent-related documents
                  to PHS. In such event, LICENSEE shall, subject to the prior
                  approval of PHS, select registered patent attorneys or patent
                  agents to provide such services on behalf of Licensee and PHS.
                  PHS shall provide appropriate powers of attorney and other
                  documents necessary to undertake such actions to the patent
                  attorneys or patent agents providing such services. LICENSEE
                  and its attorneys or agents shall consult with PHS in all
                  aspects of the preparation, filing, prosecution and
                  maintenance of patent applications and patents included within
                  the LICENSED PATENT RIGHTS and shall provide PHS sufficient
                  opportunity to comment on any document that LICENSEE intends
                  to file or to cause to be filed with the relevant intellectual
                  property or patent office.

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<PAGE>

         7.03     At any time, PHS may provide LICENSEE with written notice that
                  PHS wishes to assume control of the preparation, filing,
                  prosecution, and maintenance of any and all patent
                  applications or patents included in the LICENSED PATENT
                  RIGHTS. If PHS elects to assume such responsibilities,
                  LICENSEE agrees to cooperate fully with PHS, its attorneys,
                  and agents in the preparation, filing, prosecution, and
                  maintenance of any and all patent applications or patents
                  included in the LICENSED PATENT RIGHTS and to provide PHS with
                  complete copies of any and all documents or other materials
                  that PHS deems necessary to undertake such responsibilities.
                  LICENSEE shall be responsible for all costs associated with
                  transferring patent prosecution responsibilities to an
                  attorney or agent of PHS's choice.

         7.04     Each party shall promptly inform the other as to all matters
                  that come to its attention that may affect the preparation,
                  filing, prosecution, or maintenance of the LICENSED PATENT
                  RIGHTS and permit each other to provide comments and
                  suggestions with respect to the preparation, filing,
                  prosecution, and maintenance of LICENSED PATENT RIGHTS, which
                  comments and suggestions shall be considered by the other
                  party.

8.       RECORD KEEPING
         --------------

         8.01     LICENSEE agrees to keep accurate and correct records of
                  LICENSED PRODUCTS made, used, sold, or imported and LICENSED
                  PROCESSES practiced under this AGREEMENT appropriate to
                  determine the amount of royalties due PHS. Such records shall
                  be retained for at least five (5) years following a given
                  reporting period and shall be available during normal business
                  hours for inspection at the expense of PHS by an accountant or
                  other designated auditor selected by PHS for the sole purpose
                  of verifying reports and payments hereunder. The accountant or
                  auditor shall only disclose to PHS information relating to the
                  accuracy of reports and payments made under this AGREEMENT. If
                  an inspection shows an underreporting or underpayment in
                  excess of five percent (5%) for any twelve (12) month period,
                  then LICENSEE shall reimburse PHS for the cost of the
                  inspection at the time LICENSEE pays the unreported royalties,
                  including any late charges as required by Paragraph 9.08 of
                  this AGREEMENT. All payments required under this Paragraph
                  shall be due within thirty (30) days of the date PHS provides
                  LICENSEE notice of the payment due.

         8.02     LICENSEE agrees to have an audit of sales and royalties
                  conducted by an independent auditor at least every two (2)
                  years if annual sales of the LICENSED PRODUCT or LICENSED
                  PROCESSES are over two (2) million dollars. The audit shall
                  address, at a minimum, the amount of gross sales by or on
                  behalf of LICENSEE during the audit period, terms of the
                  license as to percentage or fixed royalty to be remitted to
                  the GOVERNMENT, the amount of royalty funds owed to the
                  GOVERNMENT under this AGREEMENT, and whether the royalty
                  amount owed has been paid to the GOVERNMENT and is reflected
                  in the records of the LICENSEE. The audit shall also indicate
                  the PHS license number, product, and the time period being
                  audited. A report certified by the auditor shall be submitted
                  promptly by the auditor directly to PHS on completion.
                  LICENSEE shall pay for the entire cost of the audit.

9.       REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS
         ----------------------------------------------------

         9.01     Prior to signing this AGREEMENT, LICENSEE has provided to PHS
                  the COMMERCIAL DEVELOPMENT PLAN at Appendix F, under which
                  LICENSEE intends to bring the subject matter of the LICENSED
                  PATENT RIGHTS to the point of PRACTICAL APPLICATION. This
                  COMMERCIAL DEVELOPMENT PLAN is hereby incorporated by
                  reference into this AGREEMENT. Based on this plan, performance
                  BENCHMARKS are determined as specified in Appendix E.

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<PAGE>

         9.02     LICENSEE shall provide written annual reports on its product
                  development progress or efforts to commercialize under the
                  COMMERCIAL DEVELOPMENT PLAN for each of the LICENSED FIELDS OF
                  USE within sixty (60) days after December 31 of each calendar
                  year. These progress reports shall include, but not be limited
                  to: progress on research and development, status of
                  applications for regulatory approvals, manufacturing,
                  sublicensing, marketing, importing, and sales during the
                  preceding calendar year, as well as plans for the present
                  calendar year. PHS also encourages these reports to include
                  information on any of LICENSEE's public service activities
                  that relate to the LICENSED PATENT RIGHTS. If reported
                  progress differs from that projected in the COMMERCIAL
                  DEVELOPMENT PLAN and BENCHMARKS, LINCENSEE shall explain the
                  reasons for such differences. In any such annual report,
                  LICENSEE may propose amendments to the COMMERCIAL DEVELOPMENT
                  PLAN, acceptance of which by PHS may not be denied
                  unreasonably. LICENSEE agrees to provide any additional
                  information reasonably required by PHS to evaluate Licensee's
                  performance under this AGREEMENT. LICENSEE may amend the
                  BENCHMARKS at any time upon written consent by PHS. PHS shall
                  not unreasonably withhold approval of any request of LICENSEE
                  to extend the time periods of this schedule if such request is
                  supported by a reasonable showing by LICENSEE of diligence in
                  its performance under the COMMERCIAL DEVELOPMENT PLAN and
                  toward bringing the LICENSED PRODUCTS to the point of
                  PRACTICAL APPLICATION as defined in 37 CFR 404.3(d). LICENSEE
                  shall amend the COMMERCIAL DEVELOPMENT PLAN and BENCHMARKS at
                  the request of PHS to address any LICENSED FIELDS OF USE not
                  specifically addressed in the plan originally submitted.

         9.03     LICENSEE shall report to PHS the dates for achieving
                  BENCHMARKS specified in Appendix E and the FIRST COMMERCIAL
                  SALE in each country in the LICENSED TERRITORY within thirty
                  (30) days of such occurrences.

         9.04     LICENSEE shall submit to PHS within sixty (60) days after each
                  calendar half-year ending June 30 and December 31 a royalty
                  report setting forth for the preceding half-year period the
                  amount of the LICENSED PRODUCTS sold or LICENSED PROCESSES
                  practiced by or on behalf of LICENSEE in each country within
                  the LICENSED TERRITORY, the NET SALES, and the amount of
                  royalty accordingly due. With each such royalty report,
                  LICENSEE shall submit payment of the earned royalties due. If
                  no earned royalties are due to PHS for any reporting period,
                  the written report shall so state. The royalty report shall be
                  certified as correct by an authorized officer of LICENSEE and
                  shall include a detailed listing of all deductions made under
                  Paragraph 2.10 to determine Net Sales made under Article 6 to
                  determine royalties due.

         9.05     LICENSEE agrees to forward semi-annually to PHS a copy of such
                  reports received by LICENSEE from its sublicensees during the
                  preceding half-year period as shall be pertinent to a royalty
                  accounting to PHS by LICENSEE for activities under the
                  sublicense.

         9.06     Royalties due under Article 6 shall be paid in U.S. dollars.
                  For conversion of foreign currency to U.S. dollars, the
                  conversion rate shall be the New York foreign exchange rate
                  quoted in THE WALL STREET JOURNAL on the day that the payment
                  is due. All checks and bank drafts shall be drawn on United
                  States banks and shall be payable, as appropriate, to
                  "NIH/Patent Licensing." All such payments shall be sent to the
                  following address: NIH, P.O. Box 360120, Pittsburgh, PA
                  152516120. Any loss of exchange, value, taxes, or other
                  expenses incurred in the transfer or conversion to U.S.
                  dollars shall be paid entirely by LICENSEE. The royalty report
                  required by Paragraph 9.04 of this Agreement shall accompany
                  each such payment, and a copy of such report shall also be
                  mailed to PHS at its address for notices indicated on the
                  Signature Page of this AGREEMENT.

         9.07     LICENSEE shall be solely responsible for determining if any
                  tax on royalty income is owed outside the United States and
                  shall pay any such tax and be responsible for all filings with
                  appropriate agencies of foreign governments.

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<PAGE>

         9.08     Interest and penalties may be assessed by PHS on any overdue
                  payments in accordance with the Federal Debt Collection Act.
                  The payment of such late charges shall not prevent PHS from
                  exercising any other rights it may have as a consequence of
                  the lateness of any payment.

         9.09     All plans and reports required by this Article 9 and marked
                  "confidential" by LICENSEE shall, to the extent permitted by
                  law, be treated by PHS as commercial and financial information
                  obtained from a person and as privileged and confidential, and
                  any proposed disclosure of such records by the PHS under the
                  Freedom of Information Act (FOIA), 5 U.S.C. section 552 shall
                  be subject to the predisclosure notification requirements of
                  45 CFR section 5.65(d).

10.      PERFORMANCE
         -----------

         10.01    LICENSEE shall use its reasonable best efforts to bring the
                  LICENSED PRODUCTS and LICENSED PROCESSES to PRACTICAL
                  APPLICATION. "Reasonable best efforts" for the purposes of
                  this provision shall include adherence to the COMMERCIAL
                  DEVELOPMENT PLAN at Appendix F and performance of the
                  BENCHMARKS at Appendix E. The efforts of a sublicensee shall
                  be considered the efforts of LICENSEE.

         10.02    Upon the FIRST COMMERCIAL SALE, until the expiration of this
                  AGREEMENT, LICENSEE shall use its reasonable best efforts to
                  make LICENSED PRODUCTS and LICENSED PROCESSES reasonably
                  accessible to the United States public.

11.      INFRINGEMENT AND PATENT ENFORCEMENT
         -----------------------------------

         11.01    PHS and LICENSEE agree to notify each other promptly of each
                  infringement or possible infringement of the LICENSED PATENT
                  RIGHTS, as well as any facts which may affect the validity,
                  scope, or enforceability of the LICENSED PATENT RIGHTS of
                  which either Party becomes aware.

         11.02    Pursuant to this AGREEMENT and the provisions of Chapter 29 of
                  title 35, United States Code, LICENSEE may: a) bring suit in
                  its own name, at its own expense, and on its own behalf for
                  infringement of presumably valid claims in the LICENSED PATENT
                  RIGHTS; b) in any such suit, enjoin infringement and collect
                  for its use, damages, profits, and awards of whatever nature
                  recoverable for such infringement; and (c) settle any claim or
                  suit for infringement of the Licensed Patent Rights provided,
                  however, that PHS and appropriate GOVERNMENT authorities shall
                  have the first right to take such actions. If LICENSEE desires
                  to initiate a suit for patent infringement, LICENSEE shall
                  notify PHS in writing. If PHS does not notify LICENSEE of its
                  intent to pursue legal action within ninety (90) days,
                  LICENSEE will be free to initiate suit. PHS shall have a
                  continuing right to intervene in such suit. LICENSEE shall
                  take no action to compel the GOVERNMENT either to initiate or
                  to join in any such suit for patent infringement. LICENSEE may
                  request the GOVERNMENT to initiate or join in any such suit if
                  necessary to avoid dismissal of the suit. Should the
                  GOVERNMENT be made a party to any such suit, LICENSEE shall
                  reimburse the GOVERNMENT for any costs, expenses, or fees
                  which the GOVERNMENT incurs as a result of such motion or
                  other action, including any and all costs incurred by the
                  GOVERNMENT in opposing any such motion or other action. In all
                  cases, LICENSEE agrees to keep PHS reasonably apprised of the
                  status and progress of any litigation. Before LICENSEE
                  commences an infringement action, LICENSEE shall notify PHS
                  and give careful consideration to the views of PHS and to any
                  potential effects of the litigation on the public health in
                  deciding whether to bring suit.

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<PAGE>

         11.03    In the event that a declaratory judgment action alleging
                  invalidity or non-infringement of any of the LICENSED PATENT
                  RIGHTS shall be brought against LICENSEE or raised by way of
                  counterclaim or affirmative defense in an infringement suit
                  brought by LICENSEE under Paragraph 11.02, pursuant to this
                  AGREEMENT and the provisions of Chapter 29 of Title 35, United
                  States Code or other statutes, LICENSEE may: a) defend the
                  suit in its own name, at its own expense, and on its own
                  behalf for presumably valid claims in the LICENSED PATENT
                  RIGHTS; b) in any such suit, ultimately to enjoin infringement
                  and to collect for its use, damages, profits, and awards of
                  whatever nature recoverable for such infringement; and c)
                  settle any claim or suit for declaratory judgment involving
                  the LICENSED PATENT RIGHTS-provided, however, that PHS and
                  appropriate GOVERNMENT authorities shall have the first right
                  to take such actions and shall have a continuing right to
                  intervene in such suit. If PHS does not notify LICENSEE of its
                  intent to respond to the legal action within a reasonable
                  time, LICENSEE will be free to do so. LICENSEE shall take no
                  action to compel the GOVERNMENT either to initiate or to join
                  in any such declaratory judgment action. LICENSEE may request
                  the GOVERNMENT to initiate or to join any such suit if
                  necessary to avoid dismissal of the suit. Should the
                  GOVERNMENT be made a party to any such suit by motion or any
                  other action of LICENSEE, LICENSEE shall reimburse the
                  GOVERNMENT for any costs, expenses, or fees which the
                  GOVERNMENT incurs as a result of such motion or other action.
                  If LICENSEE elects not to defend against such declaratory
                  judgment action, PHS, at its option, may do so at its own
                  expense. In all cases, LICENSEE agrees to keep PHS reasonably
                  apprised of the status and progress of any litigation. Before
                  LICENSEE commences an infringement action, LICENSEE shall
                  notify PHS and give careful consideration to the views of PHS
                  and to any potential effects of the litigation on the public
                  health in deciding whether to bring suit.

         11.04    In any action under Paragraphs 11.02 or 11.03, the expenses
                  including costs, fees, attorney fees, and disbursements, shall
                  be paid by LICENSEE. The value of any recovery made by
                  LICENSEE through court judgment or settlement shall be treated
                  as NET SALES and subject to earned royalties.

         11.05    PHS shall cooperate fully with LICENSEE in connection with any
                  action under Paragraphs 11.02 or 11.03. PHS agrees promptly to
                  provide access to all necessary documents and to render
                  reasonable assistance in response to a request by LICENSEE.

12.      NEGATION OF WARRANTIES AND INDEMNIFICATION
         ------------------------------------------

         12.01 PHS offers no warranties other than those specified in Article 1.

         12.02    PHS does not warrant the validity of the LICENSED PATENT
                  RIGHTS and makes no representations whatsoever with regard to
                  the scope of the LICENSED PATENT RIGHTS, or that the LICENSED
                  PATENT RIGHTS may be exploited without infringing other
                  patents or other intellectual property rights of third
                  parties.

         12.03    PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANT
                  ABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT
                  MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT RIGHTS OR
                  TANGIBLE MATERIALS RELATED THERETO.

         12.04    PHS does not represent that it will commence legal actions
                  against third parties infringing the LICENSED PATENT RIGHTS.

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<PAGE>

         12.05    LICENSEE shall indemnify and hold PHS, its employees,
                  students, fellows, agents, and consultants harmless from and
                  against all liability, demands, damages, expenses, and losses,
                  including but not limited to death, personal injury, illness,
                  or property damage in connection with or arising out of: a)
                  the use by or on behalf of LICENSEE, its sublicensees,
                  directors, employees, or third parties of any LICENSED PATENT
                  RIGHTS; or b) the design, manufacture, distribution, or use of
                  any LICENSED PRODUCTS, LICENSED PROCESSES or materials by
                  LICENSEE, or other products or processes developed in
                  connection with or arising out of the LICENSED PATENT RIGHTS.
                  LICENSEE agrees to maintain a liability insurance program
                  consistent with sound business practice.

13.      TERM, TERMINATION, AND MODIFICATION OF RIGHTS

         13.01    This AGREEMENT is effective when signed by all parties and
                  shall extend to the expiration of the last to expire of the
                  LICENSED PATENT RIGHTS unless sooner terminated as provided in
                  this Article 13.

         13.02    In the event that LICENSEE is in default in the performance of
                  any material obligations under this AGREEMENT, including but
                  not limited to the obligations listed in Article 13.05, and if
                  the default has not been remedied within ninety (90) days
                  after the date of notice in writing of such default, PHS may
                  terminate this AGREEMENT by written notice and pursue
                  outstanding amounts owed through procedures provided by the
                  Federal Debt Collection Act.

         13.03    In the event that LICENSEE becomes insolvent, files a petition
                  in bankruptcy, has such a petition filed against it,
                  determines to file a petition in bankruptcy, or receives
                  notice of a third party's intention to file an involuntary
                  petition in bankruptcy, LICENSEE shall immediately notify PHS
                  in writing. Furthermore, PHS shall have the right to terminate
                  this AGREEMENT immediately upon LICENSEE'S receipt of written
                  notice.

         13.04    LICENSEE shall have a unilateral right to terminate this
                  AGREEMENT and/or any licenses in any country or territory by
                  giving PHS sixty (60) days written notice to that effect.

         13.05    PHS shall specifically have the right to terminate or modify,
                  at its option, this AGREEMENT, if PHS determines that
                  the LICENSEE: 1) is not executing the COMMERCIAL DEVELOPMENT
                  PLAN submitted with its request for a license and the LICENSEE
                  cannot otherwise demonstrate to PHS's satisfaction that the
                  LICENSEE has taken, or can be expected to take within a
                  reasonable time, effective steps to achieve PRACTICAL
                  APPLICATION of the LICENSED PRODUCTS or LICENSED PROCESSES; 2)
                  has not achieved the BENCHMARKS as may be modified under
                  Paragraph 9.02; 3) has willfully made a false statement of, or
                  willfully omitted, a material fact in the license application
                  or in any report required by the license AGREEMENT; 4) has
                  committed a material breach of a covenant or agreement
                  contained in the license; 5) is not keeping LICENSED PRODUCTS
                  or LICENSED PROCESSES reasonably available to the public after
                  commercial use commences; 6) cannot reasonably satisfy unmet
                  health and safety needs; or 7) cannot reasonably justify a
                  failure to comply with the domestic production requirement of
                  Paragraph 5.02 unless waived. In making this determination,
                  PHS will take into account the normal course of such
                  commercial development programs conducted with sound and
                  reasonable business practices and judgment and the annual
                  reports submitted by LICENSEE under Paragraph 9.02. Prior to
                  invoking this right, PHS shall give written notice to LICENSEE
                  providing LICENSEE specific notice of, and a ninety (90) day
                  opportunity to respond to, PHS's concerns as to the previous
                  items 1) to 7). If LICENSEE fails to alleviate PHS's concerns
                  as to the previous items 1) to 7) or fails to initiate
                  corrective action to PHS's satisfaction, PHS may terminate
                  this AGREEMENT.

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<PAGE>

         13.06    When the public health and safety so require, and after
                  written notice to LICENSEE providing LICENSEE a sixty (60) day
                  opportunity to respond, PHS shall have the right to require
                  LICENSEE to grant sublicenses to responsible applicants, on
                  reasonable terms, in any LICENSED FIELDS OF USE under the
                  LICENSED PATENT RIGHTS, unless LICENSEE can reasonably
                  demonstrate that the granting of the sublicense would not
                  materially increase the availability to the public of the
                  subject matter of the LICENSED PATENT RIGHTS. PHS will not
                  require the granting of a sublicense unless the responsible
                  applicant has first negotiated in good faith with LICENSEE.

         13.07    PHS reserves the right according to 35 U.S.C. section
                  209(f)(4) to terminate or modify this AGREEMENT if it is
                  determined that such action is necessary to meet requirements
                  for public use specified by federal regulations issued after
                  the date of the license and such requirements are not
                  reasonably satisfied by LICENSEE.

         13.08    Within thirty (30) days of receipt of written notice of PHS's
                  unilateral decision to modify or terminate this AGREEMENT,
                  LICENSEE may, consistent with the provisions of 37 CFR 404.11,
                  appeal the decision by written submission to the designated
                  PHS official. The decision of the designated PHS official
                  shall be the final agency decision. LICENSEE may thereafter
                  exercise any and all administrative or judicial remedies that
                  may be available.

         13.09    Within ninety (90) days of expiration or termination of this
                  AGREEMENT under this Article 13, a final report shall be
                  submitted by LICENSEE. Any royalty payments, including those
                  incurred but not yet paid (such as the full minimum annual
                  royalty), and those related to patent expense, due to PHS
                  shall become immediately due and payable upon termination or
                  expiration. If terminated under this Article 13, sublicensees
                  may elect to convert their sublicenses to direct licenses with
                  PHS pursuant to Paragraph 4.03. Unless otherwise specifically
                  provided for under this AGREEMENT, upon termination or
                  expiration of this AGREEMENT, LICENSEE shall return all
                  LICENSED PRODUCTS or other materials included within the
                  LICENSED PATENT RIGHTS to PHS or provide PHS with
                  certification of the destruction thereof.

14.      GENERAL PROVISIONS
         ------------------

         14.01    Neither Party may waive or release any of its rights or
                  interests in this AGREEMENT except in writing. The failure of
                  the GOVERNMENT to assert a right hereunder or to insist upon
                  compliance with any term or condition of this AGREEMENT shall
                  not constitute a waiver of that right by the GOVERNMENT or
                  excuse a similar subsequent failure to perform any such term
                  or condition by LICENSEE.

         14.02    This AGREEMENT constitutes the entire agreement between the
                  Parties relating to the subject matter of the LICENSED PATENT
                  RIGHTS, and all prior negotiations, representations,
                  agreements, and understandings are merged into, extinguished
                  by, and completely expressed by this AGREEMENT.

         14.03    The provisions of this AGREEMENT are severable, and in the
                  event that any provision of this AGREEMENT shall be determined
                  to be invalid or unenforceable under any controlling body of
                  law, such determination shall not in any way affect the
                  validity or enforceability of the remaining provisions of this
                  AGREEMENT.

         14.04    If either Party desires a modification to this AGREEMENT, the
                  Parties shall, upon reasonable notice of the proposed
                  modification by the Party desiring the change, confer in good
                  faith to determine the desirability of such modification. No
                  modification will be effective until a written amendment is
                  signed by the signatories to this AGREEMENT or their
                  designees.

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<PAGE>

         14.05    The construction, validity, performance, and effect of this
                  AGREEMENT shall be governed by Federal law as applied by the
                  Federal courts in the District of Columbia.

         14.06    All notices required or permitted by this AGREEMENT shall be
                  given by prepaid, first class, registered or certified mail or
                  by an express/overnight delivery service provided by a
                  commercial carrier, properly addressed to the other Party at
                  the address designated on the following Signature Page, or to
                  such other address as may be designated. In writing by such
                  other Party. Notices shall be considered timely if such
                  notices are received on or before the established deadline
                  date or sent on or before the deadline date as verifiable by
                  U.S. Postal Service postmark or dated receipt from a
                  commercial carrier. Parties should request a legibly dated
                  U.S. Postal Service postmark or obtain a dated receipt from a
                  commercial carrier or the U.S. Postal Service. Private metered
                  postmarks shall not be acceptable as proof of timely mailing.

         14.07    This AGREEMENT shall not be assigned by LICENSEE except: a)
                  with the prior written consent of PHS, such consent not to be
                  withheld unreasonably; or b) as part of a sale or transfer of
                  substantially the entire business of LICENSEE relating to
                  operations which concern this AGREEMENT. LICENSEE shall notify
                  PHS within ten (10) days of any assignment of this AGREEMENT
                  by LICENSEE, and LICENSEE shall pay PHS, as an additional
                  royalty, one percent (1%) of the fair market value of any
                  consideration received for any assignment of this AGREEMENT
                  within thirty (30) days of such assignment.

         14.08    LICENSEE agrees in its use of any PHS-supplied materials to
                  comply with all applicable statutes, regulations, and
                  guidelines, including PHS and DHHS regulations and guidelines.
                  LICENSEE agrees not to use the materials for research
                  involving human subjects or clinical trials in the United
                  States without complying with 21 CFR Part 50 and 45 CFR Part
                  46. LICENSEE agrees not to use the materials for research
                  involving human subjects or clinical trials outside of the
                  United States without notifying PHS, in writing, of such
                  research or trials and complying with the applicable
                  regulations of the appropriate national control authorities.
                  Written notification to PHS of research involving human
                  subjects or clinical trials outside of the United States shall
                  be given no later than sixty (60) days prior to commencement
                  of such research or trials.

         14.09    LICENSEE acknowledges that it is subject to and agrees to
                  abide by the United States laws and regulations (including the
                  Export Administration Act of 1979 and Arms Export Control Act)
                  controlling the export of technical data, computer software,
                  laboratory prototypes, biological material, and other
                  commodities. The transfer of such items may require a license
                  from the cognizant Agency of the U.S. GOVERNMENT or written
                  assurances by LICENSEE that it shall not export such items to
                  certain foreign countries without prior approval of such
                  agency. PHS neither represents that a license is or is not
                  required or that, if required, it shall be issued.

         14.10    LICENSEE agrees to mark the LICENSED PRODUCTS or their
                  packaging sold in the United States with all applicable U.S.
                  patent numbers and similarly to indicate "Patent Pending"
                  status. All LICENSED PRODUCTS manufactured in, shipped to, or
                  sold in other countries shall be marked in such a manner as to
                  preserve PHS patent rights in such countries.

         14.11    By entering into this AGREEMENT, PHS does not directly or
                  indirectly endorse any product or service provided, or to be
                  provided, by LICENSEE whether directly or indirectly related
                  to this AGREEMENT. LICENSEE shall not state or imply that this
                  AGREEMENT is an endorsement by the GOVERNMENT, PHS, any other
                  GOVERNMENT organizational unit, or any GOVERNMENT employee.
                  Additionally, LICENSEE shall not use the names of NIH, CDC,
                  PHS, or DHHS or the GOVERNMENT or their employees in any
                  advertising, promotional, or sales literature without the
                  prior written consent of PHS.

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<PAGE>

         14.12    The Parties agree to attempt to settle amicably any
                  controversy or claim arising under this AGREEMENT or a breach
                  of this AGREEMENT, except for appeals of modifications or
                  termination decisions provided for in Article 13. LICENSEE
                  agrees first to appeal any such unsettled claims or
                  controversies to the designated PHS official, or designee,
                  whose decision shall be considered the final agency decision.
                  Thereafter, LICENSEE may exercise any administrative or
                  judicial remedies that may be available.

         14.13    Nothing relating to the grant of a license, nor the grant
                  itself, shall be construed to confer upon any person any
                  immunity from or defenses under the antitrust laws or from a
                  charge of patent misuse, and the acquisition and use of rights
                  pursuant to 37 CFR Part 404 shall not be immunized from the
                  operation of state or Federal law by reason of the source of
                  the grant.

         14.14    Paragraphs 4.03, 8.01, 9.05-9.07, 12.01-12.05, 13.08, 13.09,
                  and 14.12 of this Agreement shall survive termination of this
                  Agreement.

                          SIGNATURES BEGIN ON NEXT PAGE

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<PAGE>

                     PHS PATENT LICENSE AGREEMENT-EXCLUSIVE

                                 SIGNATURE PAGE

For PHS:

/s/ Signature Illegible                                              01/07/00
                                                                      --------
Jack Spiegel, Ph.D.                                                     Date
Director, Division of Technology Development and Transfer
Office of Technology Transfer
National Institutes of Health

Mailing Address for Notices:

Office of Technology Transfer
National Institutes of Health
6011 Executive Boulevard, Suite 325
Rockville, Maryland 20852-3804 U.S.A.

For LICENSEE (Upon, information and belief, the undersigned expressly certifies
or affirms that the contents of any statements of LICENSEE made or referred to
in this document are truthful and accurate.):

by:

/s/ Signature Illegible                                               1/8/00
                                                                      ------
Signature of Authorized Official                                       Date

Thomas E. Smart
---------------
Printed Name

Vice President, Corporate Development
-------------------------------------
Title

Official and Mailing Address for Notices:

GenVec, Inc
-----------

65 West Watkins Mill Road
-------------------------

Gaithersburg, MD 20878
----------------------

Attention: President
--------------------

Copies to: Vice President, Corporate Development
------------------------------------------------

Any false or misleading statements made, presented, or submitted to the
GOVERNMENT, including any relevant omissions, under this AGREEMENT and during
the course of negotiation of this AGREEMENT are subject to all applicable civil
and criminal statutes including Federal statutes 31 U.S.C. sections 3801-3812
(civil liability) and 18 U.S.C. section 1001 (criminal liability including
fine(s) and/or imprisonment).

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
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<PAGE>

                 APPENDIX A--PATENT(S) OR PATENT APPLICATION(S)

PATENT(S) OR PATENT APPLICATION(S):

*

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<PAGE>

                 APPENDIX B-LICENSED FIELDS OF USE AND TERRITORY

LICENSED FIELDS OF USE:

         Gene Therapy for Ocular Diseases, including but not limited to, macular
degeneration, cancer, diabetic retinopathy, ocular histoplasmosis syndrome, and
retinopathy associated with neovascularization in neonatals.

Licensed Territory:

         Worldwide

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
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<PAGE>

                              APPENDIX C-Royalties

ROYALTIES:

I.       License Issue/Execution Royalty pursuant to Paragraph 6.01:
         -------------------------------

                  LICENSEE agrees to pay to PHS a noncreditable, nonrefundable
                  license issue royalty in the amount of * which is due upon
                  execution of this AGREEMENT. This * is to be paid within
                  thirty (30) days of the EFFECTIVE DATE of this AGREEMENT.

II.      Minimum Annual Royalty pursuant to Paragraph 6.02:
         ----------------------

LICENSEE agrees to pay to PHS a nonrefundable minimum annual royalty in the
amount of:

                  *

III. Earned Royalties pursuant to Paragraph 6.03.
         ----------------

LICENSEE agrees to pay PHS earned royalties on NET SALES of by or on behalf of
LICENSEE and its sublicensees as follows:

                  (A) * on NET SALES of LICENSED PRODUCTS manufactured or sold
in a country within the LICENSED TERRITORY, where a patent application or
patent, within the Licensed Patent Rights, exists pursuant to Article 6 and
while this AGREEMENT is in force.

For Earned Royalties on NET SALES due under this, Section III, in the event
there is no issued valid patent claim in the LICENSED PATENT RIGHTS covering
such LICENSED PRODUCTS in a given country but there is a pending claim within
the LICENSED PATENT RIGHTS covering such LICENSED PRODUCTS, the royalties set
forth in paragraph (A) of this Section shall be reduced by fifty percent (50.0%)
(hereinafter the "Patent Pending Reduction") until the date when such pending
claims are allowed for issuance by the appropriate authority of said given
country. The Patent Pending Reduction will not apply to royalties from a sale of
LICENSED PRODUCT(S) in a country where the LICENSED PRODUCT(S) are not covered
by a valid issued patent claim but where such LICENSED PRODUCTS were
manufactured in a country where the LICENSED PRODUCT(S) or LICENSED PROCESS(ES)
are covered by a valid issued patent claim.

IV. Benchmark Royalties pursuant to Paragraph 6.04:
    -------------------

LICENSEE agrees to pay PHS Benchmark Royalties as follows:

                  (A) *

                  (B) *

                  (C) * and

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<PAGE>

                  (D) *

V.    Sublicensing Royalties pursuant to Paragraph 6.05:
      ----------------------

LICENSEE agrees to pay PHS additional Sublicensing Royalties as follows:

                  (A) * of the following sublicensing royalties/fees
                  received by LICENSEE from the sublicensing of
                  the LICENSED PATENT RIGHTS: (i) execution/up front
                  royalties/fees; (ii) minimum annual royalties/fees; and (iii)
                  benchmark/milestone royalties; and

                  (B) In the event LICENSEE enters into a Corporate Partnership,
                  as defined in Paragraph 2.21 herein, PHS shall receive no less
                  than * as its share of the execution/up front royalties,
                  pursuant to Paragraph  V(A), received by LICENSEE pursuant to
                  the CORPORATE PARTNERSHIP sublicense said royalties pursuant
                  to this paragraph (B) payable within thirty (30) days of the
                  Effective Date of such agreement establishing a CORPORATE
                  PARTNERSHIP.

Such sublicensing royalties/fees do not include royalties/fees received by
LICENSEE (i) for the purchase of equity, (ii) debt financing, (iii) funds for
future research and/or development, (iv) the license or sublicense of
intellectual property other than the LICENSED PRODUCT(S), or (v) reimbursement
for patent or other intellectual property expenses incurred by LICENSEE in
connection with LICENSED PRODUCTS, or (vi) reimbursement for other expenses
incurred by LICENSEE in connection with LICENSED PRODUCTS, said other expenses
being subject to the prior approval by PHS such approval not being reasonably
withheld. Additionally, payments by LICENSEE to PHS for Benchmark Royalties as
set forth above in this Appendix C, Section IV shall be fully creditable against
amounts due PHS, under this Section V, for the same benchmarks (for example, if
PHS is due a payment under Section IV, Paragraph (A) then this amount, *
may be deducted from (credited against) any payment received from a sublicensee
for this same benchmark prior to calculating the royalty due under this
Paragraph V(A)).

VI.   Past Patent Expenses Royalty pursuant to Paragraph 6.09:
      ----------------------------

LICENSEE agrees to pay PHS an amount equal to one-quarter (1/4) of the total
amount of patent expenses previously incurred by PHS and which is due upon
execution of this AGREEMENT. This royalty for PAST PATENT EXPENSES is to be paid
in four (4) equal installments according to the following schedule:

                  (A) First Installment which is payable within thirty (30) days
                      of the Effective Date of this AGREEMENT;
                  (B) Second Installment which is payable on January 30, 2001;
                  (C) Third Installment which is payable on January 30, 2002;
                      and
                  (D) Fourth Installment which is payable on January 30, 2003.

VII.  Materials Transfer Royalty pursuant to Paragraph 6.13:
      --------------------------

                  LICENSEE agrees to pay PHS a materials transfer royalty in the
                  amount of * which is due upon the EFFECTIVE DATE of this
                  AGREEMENT and which is payable within thirty days (30) days of
                  the EFFECTIVE DATE of this AGREEMENT.

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
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<PAGE>

                            APPENDIX D-MODIFICATIONS

PHS and Licensee agree to the following modifications to the Articles and
Paragraphs of this AGREEMENT:

Article 1:
----------

Paragraph 1.02 is amended to read as follows:

         1.02     By assignment of rights from PHS employees and other
                  inventors, DHHS, on behalf of the United States Government,
                  owns intellectual property rights claimed in any United States
                  and/or foreign patent applications or patents corresponding to
                  the assigned inventions. DHHS also owns any tangible
                  embodiments of these inventions actually reduced to practice
                  by PHS. In addition, PHS, through its Interinstitutional
                  Agreement with the University of Southern California ("USC"),
                  L-221-94/2, effective January 4, 1999, has an exclusive
                  license to certain intellectual property rights claimed in any
                  United States and/or foreign patent applications or patents
                  which are the subject of said Interinstitutional Agreement.

Article 2:
----------

Paragraph 2.03 is amended to read as follows:

         2.03     "FIRST COMMERCIAL SALE" shall mean, with respect to any
                  LICENSED PRODUCT(S) on a country by country basis, the first
                  transfer of such LICENSED PRODUCT(S), by or on behalf of
                  LICENSEE or its sublicensees, for use or consumption of such
                  LICENSED PRODUCT(S) following approval by the United States
                  Food and Drug Administration (FDA) or comparable regulatory
                  authority in exchange for cash or some equivalent to which
                  value can be assigned for the purpose of determining NET
                  SALES. A transfer of the LICENSED PRODUCT(S) by LICENSEE or
                  its sublicensees (a) solely for research and development
                  purposes and for the purpose of directly enabling LICENSEE and
                  its sublicensees to research and develop LICENSED PRODUCT(S)
                  under this AGREEMENT and/or (b) prior to LICENSEE's receipt of
                  approval of a Biologics License Application (BLA), Product
                  License Application (PLA), New Drug Application (NDA) or
                  equivalent by the FDA or comparable regulatory authority of
                  any other country for the use of such LICENSED PRODUCT(S)
                  shall not be considered a FIRST COMMERCIAL SALE in the
                  applicable country.

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<PAGE>

Paragraphs 2.06 through 2.08 are amended to read as follows:

         2.06     "LICENSED PATENT RIGHTS" shall mean:

                  a)       Patent applications (including provisional patent
                           applications and PCT patent applications) and/or
                           patents listed in Appendix A, all divisions and
                           continuations of these applications, all patents
                           issuing from such applications, divisions, and
                           continuations, and any reissues, reexaminations, and
                           extensions of all such patents;

                  b)       to the extent that the following contain one or more
                           claims directed to the invention or inventions
                           disclosed in a) above: i) continuations-in-part of a)
                           above; ii) all divisions and continuations of these
                           continuations-in-part; iii) all patents issuing from
                           such continuations-in-part, divisions, and
                           continuations; iv) priority patent application(s) of
                           a) above; and v) any reissues, reexaminations, and
                           EXTENSIONS OF ALL SUCH PATENTS;

                  c)       to the extent that the following contain one or more
                           claims directed to the invention or inventions
                           disclosed in a) above: all counterpart foreign and
                           U.S. patent applications and patents to a) and b)
                           above, including those listed in Appendix A.

                  LICENSED PATENT RIGHTS shall not include those claims in b) or
                  c) above that are directed to new matter which is not the
                  subject matter disclosed in a) above, unless the applicable
                  claims further characterize the subject matter disclosed in
                  a).

         2.07     "LICENSED PROCESS(ES)" means processes which, in the course of
                  being practiced would, in the absence of this Agreement,
                  infringe one or more claims of the LICENSED PATENT RIGHTS that
                  have not been held invalid or unenforceable by an unappealed
                  or unappealable judgment of a court of competent jurisdiction
                  or is otherwise expired.

         2.08     "LICENSED PRODUCT(S)" means (a) tangible materials which, in
                  the course of manufacture, use, offer to sell, sale, or
                  importation would, in the absence of this Agreement, infringe
                  one or more claims of the LICENSED PATENT RIGHTS that have not
                  been held invalid or unenforceable by an unappealed or
                  unappealable judgment of a court of competent jurisdiction or
                  is otherwise expired or (b) any tangible materials, including
                  all progeny, subclones, and derivatives or conjugates thereof,
                  as defined below in paragraph 2.19 as LICENSED MATERIALS.

Paragraph 2.10 is amended to read as follows:

         2.10     "NET SALES" means the total gross amounts received by LICENSEE
                  and sublicensees for LICENSED PRODUCTS sold in the FIRST
                  COMMERCIAL SALE and subsequent commercial sales, 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 on sales, turnover or delivery of
                  such LICENSED PRODUCTS and actually paid or allowed by
                  LICENSEE or any sublicensee; and (d) amounts actually allowed
                  or credited due to returns or uncollectible amounts. No
                  deductions shall be made for commissions paid to individuals,
                  whether they be with independent sales agencies or regularly
                  employed by LICENSEE, or sublicensees, and on its payroll or
                  for the cost of collections.

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<PAGE>

The following new Paragraphs 2.13 through 2.22 are added to read as follows:

         2.13     GENE THERAPY means the introduction of a gene and/or variants
                  of said gene into a person for therapeutic purposes (i) by in
                  vivo introduction for incorporation into cells of such person
                  or (ii) by ex vivo introduction into cells for transfer into a
                  person

         2.14     "PERSON" means an individual, corporation, partnership, trust,
                  business trust, association, joint stock company, joint
                  venture, pool, syndicate, sole proprietorship, unincorporated
                  organization, governmental authority or any other form of
                  entity not specifically listed herein.

         2.15     "AFFILIATE(S)" shall mean, with respect to LICENSEE, any other
                  Person which during the term of this AGREEMENT controls, is
                  controlled by or is under common control with LICENSEE, but
                  for only so long as such PERSON controls, is controlled by or
                  is under common control with LICENSEE. For this purpose,
                  control means 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
                  where control of fifty percent (50%) or more of such rights is
                  not permitted in the country where such Person exists, the
                  maximum permitted in such a country.

         2.16     "ACTIVE THERAPEUTIC AGENT(S)" means DNA or other component,
                  which could or does directly or indirectly impart a separate
                  and distinct therapeutic benefit to the recipient.

         2.17     "COMBINATION PRODUCT(S)" means LICENSED PRODUCT(S) that are
                  sold in combination with one or more, ACTIVE THERAPEUTIC
                  AGENT(S) which are not LICENSED PRODUCT(S).

         2.18     "VALID CLAIM(S)" means either (a) a claim of an issued and
                  unexpired patent included within the LICENSED PATENT RIGHTS,
                  which has not been held invalid by an unappealable or
                  unappealed within the time limit allowed for appeal, decision
                  of a court or other governmental agency of competent
                  jurisdiction, unappealable or unappealed within the time limit
                  allowed for appeal or (b) a claim of a pending patent
                  application included within the LICENSED PATENT RIGHTS, which
                  claim has not been abandoned without the possibility of
                  revival or pursued through a timely filed continuation or
                  divisional application or finally disallowed without the
                  possibility of appeal.

         2.19     "LICENSED MATERIALS" means the plasmid phiFS17, as described
                  in Steele, FR, et al., "Pigment epithelium-derived factor:
                  Neurotrophic activity and identification as a member of the
                  serine protease inhibitor gene family" PNAS, USA 90(4):
                  1526-1530 (Feb. 15, 1993) which contains the cDNA encoding
                  human Pigment Epithelium Derived Factor.

         2.20     "EFFECTIVE DATE" means the date of the last signature of a
                  Party to this AGREEMENT.

         2.21     "CORPORATE PARTNERSHIP" means an agreement entered into by
                  LICENSEE with a corporate entity pursuant to which Licensee
                  grants to such an entity a sublicense under the LICENSED
                  PATENT RIGHTS, which agreement provides that Licensee shall
                  receive in excess of * in payments from such entity within
                  a * period in exchange for such rights.

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<PAGE>

         2.22     "TOTAL PRO RATA SHARE" means the total number of additional
                  licenses granted by PHS which include the LICENSED PATENT
                  RIGHTS and which have LICENSED FIELDS OF USE which include but
                  are not necessarily limited to therapeutic applications
                  divided by the total number of licenses granted by PHS which
                  include the LICENSED PATENT RIGHTS and which have LICENSED
                  FIELDS OF USE which include but are not necessarily limited to
                  therapeutic applications. For example, if PHS has granted 4
                  additional licenses which include the LICENSED PATENT RIGHTS
                  and which have LICENSED FIELDS OF USE which include, but are
                  not necessarily limited to therapeutic applications, then the
                  TOTAL PRO RATA SHARE would be four fifths (4/5).

Article 3:
----------

Paragraph 3.02 is amended to read as follows:

         3.02     This AGREEMENT confers no license or rights by implication,
                  estoppel, or otherwise under any patent applications or
                  patents of PHS other than LICENSED PATENT RIGHTS regardless of
                  whether such patents are dominant or subordinate to LICENSED
                  PATENT RIGHTS, except as set forth in Paragraphs 12.01, 13.05,
                  and 13.07.

Article 4:
----------

Paragraphs 4.02 through 4.03 are amended to read as follows:

         4.02     LICENSEE agrees that any sublicenses granted by it shall
                  provide that the obligations to PHS and USC of Paragraphs
                  5.01-5.04, 8.01, 9.07, 10.01, 10.02, 10.04, 12.05, and
                  13.07-13.09 of this AGREEMENT shall be binding upon the
                  sublicensee as if it were a Party to this AGREEMENT. LICENSEE
                  further agrees to attach copies of these Paragraphs to all
                  sublicense agreements.

         4.03     Any sublicenses granted by LICENSEE shall provide for the
                  termination of the sublicense, or the conversion to a license
                  directly between such sublicensees and PHS, at the option of
                  the sublicensee, upon termination of this AGREEMENT under
                  Article 13. Such conversion is subject to PHS approval, which
                  shall not be withheld unless the sublicensee is in default
                  under this, or a separate agreement with the GOVERNMENT and
                  has not cured such default within ninety (90) days of
                  notification thereof or is debarred from doing business with
                  the GOVERNMENT, and contingent upon acceptance by the
                  sublicensee of the remaining provisions of this AGREEMENT.

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<PAGE>

Article 5:
----------

Paragraphs 5.01 through 5.02 are amended to read as follows:

         5.01              (a) PHS reserves on behalf of the Government an
                           irrevocable, nonexclusive, nontransferable,
                           royalty-free license for the practice of all
                           inventions licensed under the LICENSED PATENT RIGHTS
                           throughout the world by or on behalf of the
                           GOVERNMENT and on behalf of any foreign government or
                           international organization pursuant to any existing
                           or future treaty or agreement to which the GOVERNMENT
                           is a signatory. Prior to the FIRST COMMERCIAL SALE,
                           and upon request, by the GOVERNMENT, LICENSEE agrees
                           to provide PHS reasonable quantities of LICENSED
                           PRODUCTS or materials made through the LICENSED
                           PROCESSES for PHS research use. LICENSEE shall be
                           obligated to provide such reasonable quantities only
                           if such quantities are already manufactured or plan
                           to be manufactured and are not committed, or
                           anticipated to be committed, to LICENSEE'S research
                           and development activities or to a third Party.

                  (b)      In the event that LICENSED PATENT RIGHTS are Subject
                           Inventions made under a Cooperative Research and
                           Development Agreement (CRADA), LICENSEE grants to the
                           GOVERNMENT, pursuant to 15 U.S.C. 3710a(b)(1)(A), a
                           nonexclusive, nontransferable, irrevocable, paid-up
                           license to practice LICENSED PATENT RIGHTS or have
                           LICENSED PATENT RIGHTS practiced throughout the world
                           by or on behalf of the GOVERNMENT. In the exercise of
                           such license, the GOVERNMENT shall not publicly
                           disclose trade secrets or commercial or financial
                           information that is privileged or confidential within
                           the meaning of 5 U.S.C. 552(b)(4) or which would be
                           considered as such if it had been obtained from a
                           non-Federal Party. Prior to the FIRST COMMERCIAL
                           SALE, and upon request by the GOVERNMENT, LICENSEE
                           agrees to provide PHS reasonable quantities of
                           LICENSED PRODUCTS or materials made through the
                           LICENSED PROCESSES for PHS research use. LICENSEE
                           shall be obligated to provide such reasonable
                           quantities only if such quantities are already
                           manufactured or plan to be manufactured and are not
                           committed, or anticipated to be committed, to
                           LICENSEE'S research and development activities or to
                           a third Party.

         5.02     LICENSEE agrees that components of LICENSED PRODUCTS or
                  LICENSED PRODUCTS used or sold in the United States embodying
                  LICENSED PATENT RIGHTS or produced through use of LICENSED
                  PROCESSES shall be manufactured substantially in the United
                  States, unless a written waiver is obtained in advance from
                  PHS.

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<PAGE>

Paragraph 5.04(a) is amended to read as follows:

         5.04     (a)      In addition to the reserved license of Paragraph
                           5.01 above, PHS reserves the right to grant
                           nonexclusive RESEARCH LICENSES to make and to use,
                           but not to sell or have sold, the inventions defined
                           by the LICENSED PATENT RIGHTS for purposes of
                           research involving the inventions themselves, and not
                           for purposes of commercial manufacture or use or in
                           lieu of purchase if the inventions are available as
                           commercial products for research purposes. The
                           purpose of this license is to encourage basic
                           research, whether conducted at an academic or
                           corporate facility. In order to safeguard the
                           LICENSED PATENT RIGHTS, however, PHS shall consult
                           with LICENSEE before granting to commercial entities
                           a RESEARCH LICENSE or providing to them research
                           samples of materials claimed in LICENSED PATENT
                           RIGHTS. In the event LICENSEE can provide convincing
                           written evidence to PHS that a commercial entity that
                           has been granted a RESEARCH LICENSE TO LICENSED
                           PATENT RIGHTS is developing the inventions for
                           commercial manufacture or use or in lieu of purchase
                           if the inventions are available as commercial
                           products, then LICENSEE can request that PHS
                           terminate its RESEARCH LICENSE with such commercial
                           entities, such request not to be unreasonably denied.

Paragraph 5.04(b) is deleted in its entirety.

Article 6:
----------

Paragraph 6.01 is amended to read as follows:

         6.01     LICENSEE agrees to pay to PHS a noncreditable, nonrefundable
                  license issue royalty as set forth in Appendix C.

Paragraphs 6.06 through 6.11 are amended to read as follows:

         6.06     A patent or patent application licensed under this AGREEMENT
                  shall cease to fall within the LICENSED PATENT RIGHTS for the
                  purpose of computing earned royalty payments in any given
                  country on the earliest of the dates that a) the application
                  has been abandoned and not continued, b) the patent expires or
                  irrevocably lapses, or c) all of the claims have been held to
                  be invalid or unenforceable by an unappealed or unappealable
                  decision of a court of competent jurisdiction or
                  administrative agency.

         6.07     No multiple royalties shall be payable because any LICENSED
                  PRODUCTS or LICENSED PROCESSES are covered by more than one
                  claim of the LICENSED PATENT RIGHTS.

         6.08     On sales of LICENSED PRODUCTS by LICENSEE or sublicensees made
                  in other than an arm's-length transaction, the value of the
                  NET SALES attributed under this Article 6 to such a
                  transaction shall be that which would have been received in an
                  arm's-length transaction, based on sales of like quantity and
                  quality products on or about the time of such transaction.

         6.09     With regard to expenses associated with the preparation,
                  filing, prosecution, and maintenance of all patent
                  applications and patents included within the LICENSED PATENT
                  RIGHTS incurred by PHS or USC prior to the EFFECTIVE DATE of
                  this AGREEMENT, LICENSEE shall pay to PHS, as an additional
                  Past Patent Expenses Royalty, an amount as set forth in
                  Appendix C.

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<PAGE>

         6.10     With regard to expenses associated with the preparation,
                  filing, prosecution, and maintenance, including interferences,
                  opposition, reissues and reexaminations, of all patent
                  applications and patents included within the LICENSED PATENT
                  RIGHTS incurred by PHS on or after the EFFECTIVE DATE of this
                  AGREEMENT PHS, at its sole option, may require LICENSEE:

                  (a) to pay PHS on an annual basis, within sixty (60) days of
                  PHS's submission of a statement and request for payment, and
                  subject to the provisions of Paragraph 6.12 herein, a royalty
                  amount equivalent to one quarter (1/4) of all such patent
                  expenses incurred during the previous calendar year(s) or, in
                  the event that PHS has granted more than three (3) additional
                  licenses which have LICENSED FIELDS OF USE which include but
                  are not necessarily limited to therapeutic applications,
                  LICENSEE shall pay a pro rata share of such patent expenses
                  where such pro rata share is determined by the number of
                  licensees to the LICENSED PATENT RIGHTS which have LICENSED
                  FIELD OF USE which include but are not necessarily limited to
                  therapeutic applications; or

                  (b) to pay such expenses, in the amounts set forth in (a)
                  above, directly to the law firm employed by PHS to handle such
                  functions. However, in such event, PHS and not LICENSEE shall
                  be the client of such law firm.

                  In limited circumstances, as provided for under Paragraph 7.02
                  below, LICENSEE may be given the right to assume
                  responsibility for the preparation, filing, prosecution, or
                  maintenance, including interferences, oppositions, reissues
                  and reexaminations, of any patent application or patent
                  included with the LICENSED PATENT RIGHTS. In that event,
                  LICENSEE shall directly pay the attorneys or agents engaged to
                  prepare, file, prosecute, or maintain such patent applications
                  or patents and shall provide to PHS copies of each invoice
                  associated with such services as well as documentation that
                  such invoices have been paid. In the event that LICENSEE is
                  given the right to assume responsibility for the preparation,
                  filing, prosecution, or maintenance of any patent application
                  or patent included within the LICENSED PATENT RIGHTS pursuant
                  to Paragraph 7.02 herein LICENSEE may (i) if PHS has granted
                  three (3) or fewer additional licenses which include the
                  LICENSED PATENT RIGHTS and which have LICENSED FIELDS OF USE
                  which include but are not necessarily limited to therapeutic
                  applications, credit an amount equal to three quarters (3/4)
                  of the expenses paid by LICENSEE under this Paragraph against
                  royalties due under Paragraphs 6.03 (Earned Royalties), 6.04
                  (Benchmark Royalties), and/or 6.05 (Sublicensing Royalties) of
                  this AGREEMENT or (ii) if PHS has granted more than three (3)
                  additional licenses which include the LICENSED PATENT RIGHTS
                  and which have LICENSED FIELDS OF USE which include but are
                  not necessarily limited to therapeutic applications, credit an
                  amount equal to the TOTAL PRO RATA SHARE of the expenses paid
                  by LICENSEE under this Paragraph, against royalties due under
                  Paragraph 6.03 (Earned Royalties), 6.04 (Benchmark Royalties),
                  and/or 6.05 (Sublicensing Royalties) of this Agreement. Prior
                  to taking this credit Licensee shall provide to PHS copies of
                  each invoice associated with such services as well as
                  documentation that such invoices have been paid.

         6.11     LICENSEE may elect to surrender its rights in any country of
                  the LICENSED TERRITORY under any LICENSED PATENT RIGHTS upon
                  sixty (60) days written notice to PHS and owe no payment
                  obligation under Article 6.10 for patent-related expenses
                  incurred in that country after sixty (60) days of the
                  effective date of such written notice.

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New Paragraphs 6.12 through 6.14 are added to read as follows:

         6.12     In the event that any of the patent applications or patents
                  within the LICENSED PATENT RIGHTS are subject to an
                  interference, reexamination, reissue, opposition proceeding,
                  or equivalent thereof LICENSEE agrees to pay a pro rata share
                  of the expenses incurred by PHS in such a proceeding where
                  said pro rata share is determined by the total number of
                  licenses granted by PHS which include the patent or patent
                  application subject to the interference, reexamination,
                  reissue, opposition proceeding, or equivalent thereof within
                  the LICENSED PATENT RIGHTS and where said license includes but
                  is not necessarily limited to therapeutic applications in its
                  LICENSED FIELD OF USE. In the event that at the time of the
                  interference, opposition, reexamination, reissue, opposition
                  proceeding PHS has granted less than a total of four (4)
                  licenses which include a therapeutic application in their
                  LICENSED FIELD OF USE LICENSEE may take, as a credit against
                  royalties due under Paragraph 6.03 (Earned Royalties),
                  Paragraph 6.04 (Benchmark Royalties) and/or Paragraph 6.05
                  (Sublicensing Royalties) their pro rata share of expenses
                  which shall be the amount in excess of one quarter (1/4) of
                  the expenses incurred under this Paragraph.

         6.13     LICENSEE agrees to pay PHS a noncreditable, nonrefundable
                  Materials Transfer Royalty for providing LICENSED MATERIALS as
                  set forth in Appendix C.

         6.14     In the event LICENSEE or sublicensee sells COMBINATION
                  PRODUCT(S), NET SALES from such sales for the purposes of
                  calculating the amount due under Paragraph 6.03 of this
                  AGREEMENT shall be calculated by multiplying the NET SALES of
                  that combination by the fraction A/(A+B), where A is the gross
                  selling price of the LICENSED PRODUCTS sold separately and B
                  is the gross selling price of the ACTIVE THERAPEUTIC AGENT(S)
                  of the LICENSED PRODUCT sold separately. In the event that no
                  such separate sales are made by LICENSEE or sublicensee, NET
                  SALES receipts for royalty determination pursuant to Paragraph
                  6.03 shall be reasonably allocated by LICENSEE or sublicensee
                  between the LICENSED PRODUCTS and the ACTIVE THERAPEUTIC
                  AGENTS of the LICENSED PRODUCT based upon their relative
                  importance to the efficacy of using the COMBINED PRODUCTS and
                  upon their contribution to the proprietary position of the
                  COMBINED PRODUCTS. In the event PHS believes such allocation
                  is inequitable and the parties are unable to resolve such
                  dispute, the matter may be resolved through Administrative
                  Dispute Resolution as required by the Administrative Dispute
                  Resolution Act.

Article 7:
----------

Paragraphs 7.01 through 7.04 are amended to read as follows:

         7.01     Except as otherwise provided in this Article 7, PHS agrees to
                  take responsibility for, but to consult with, the LICENSEE in
                  the preparation, filing, prosecution, and maintenance,
                  including interferences, oppositions, reissues and
                  reexaminations, of any and all patent applications or patents
                  included in the LICENSED PATENT RIGHTS and shall furnish
                  copies of relevant patent-related documents, including all
                  communications filed with or received from a competent
                  examining authority, for example, the USPTO, the EPO, or the
                  JPO, to LICENSEE.

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<PAGE>

         7.02     Upon PHS's written request, LICENSEE may assume, but is not
                  obligated to assume, the responsibility for the preparation,
                  filing, prosecution, and maintenance, including interferences,
                  oppositions, reissues, and reexaminations of any and all
                  patent applications or patents included in the LICENSED PATENT
                  RIGHTS and shall on an ongoing basis promptly furnish copies
                  of all patent-related documents to PHS. In such event,
                  LICENSEE shall select registered patent attorneys or patent
                  agents to provide such services on behalf of LICENSEE and PHS.
                  PHS shall provide appropriate powers of attorney and other
                  documents necessary to undertake such actions to the patent
                  attorneys or patent agents providing such services. LICENSEE
                  and its attorneys or agents shall consult with PHS in all
                  aspects of the preparation, filing, prosecution and
                  maintenance, including interferences, oppositions, reissues,
                  and reexaminations of patent applications and patents included
                  within the LICENSED PATENT RIGHTS and shall provide PHS
                  sufficient opportunity to comment on any document that
                  LICENSEE intends to file or to cause to be filed with the
                  relevant intellectual property or patent office. In the event
                  that this AGREEMENT terminates for any reason, PHS shall take
                  and assume all responsibility for preparation and maintenance,
                  including interferences, oppositions, reissues, and
                  reexaminations of any and all patent applications or patents
                  included in the LICENSED PATENT RIGHTS at its own expense

         7.03     If LICENSEE exercises its rights pursuant to Paragraph 7.02
                  and assumes responsibilities pursuant to Paragraph 7.02 but
                  fails to exercise reasonable diligence, then PHS may provide
                  LICENSEE with written notice that PHS wishes to assume control
                  of the preparation, filing, prosecution and maintenance,
                  including interferences, oppositions, reissues and
                  reexaminations, of any and all patent applications or patents
                  included in the LICENSED PATENT RIGHTS. If PHS elects to
                  assume such responsibilities, LICENSEE agrees to cooperate
                  fully with PHS, its attorneys, and agents in the preparation,
                  filing, prosecution, and maintenance, including interferences,
                  oppositions, reissues, and reexaminations, of any and all
                  patent applications or patents included in the LICENSED PATENT
                  RIGHTS and to provide PHS with copies of any and all documents
                  or other materials that PHS deems necessary to undertake such
                  responsibilities. Licensee shall be responsible for all costs
                  associated with transferring patent prosecution
                  responsibilities to an attorney or agent of PHS's choice.

         7.04     Each Party shall promptly inform the other as to all matters
                  that come to its attention that may affect the preparation,
                  filing, prosecution, or maintenance, including interferences,
                  oppositions, reissues, and reexaminations, of the LICENSED
                  PATENT RIGHTS and permit each other to provide comments and
                  suggestions with respect to the preparation, filing,
                  prosecution, and maintenance of LICENSED PATENT RIGHTS, which
                  comments and suggestions shall be considered by the other
                  Party.

               THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

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Article 8:
----------

Paragraphs 8.01 through 8.02 are amended to read as follows:

         8.01     LICENSEE agrees to keep accurate and correct records of
                  LICENSED PRODUCTS made, used, sold, or imported and LICENSED
                  PROCESSES practiced under this AGREEMENT appropriate to
                  determine the amount of royalties due PHS. Such records shall
                  be retained for at least three(3) years following a given
                  reporting period and shall be available during normal business
                  hours for inspection at the expense of PHS by an accountant or
                  other designated auditor selected by PHS for the sole purpose
                  of verifying reports and payments hereunder. The accountant or
                  auditors shall only disclose to PHS information relating to
                  the accuracy of reports and payments made under this
                  AGREEMENT. If an inspection shows an underreporting or
                  underpayment in excess of * for any twelve (12) month period,
                  then LICENSEE shall reimburse PHS for the cost of the
                  inspection at the time LICENSEE pays the unreported royalties,
                  including any late charges as required by Paragraph 9.08 of
                  this AGREEMENT. All payments required  under this Paragraph
                  shall be due within thirty (30) days of the date PHS provides
                  LICENSEE notice of the payment due.

         8.02     LICENSEE agrees to have an audit of sales and royalties
                  conducted, at the written request of PHS, by an independent
                  auditor selected by LICENSEE at least every two (2) years if
                  annual sales of the LICENSED PRODUCT or LICENSED PROCESSES are
                  over two (2) million dollars. The audit shall address, at a
                  minimum, the amount of gross sales by or on behalf of LICENSEE
                  during the audit period, terms of the license as to percentage
                  or fixed royalty to be remitted to the GOVERNMENT, the amount
                  of royalty funds owed to the GOVERNMENT under this AGREEMENT,
                  and whether the royalty amount owed has been paid to the
                  GOVERNMENT and is reflected in the records of the LICENSEE.
                  The audit shall also indicate the PHS license number, product,
                  and the time period being audited. A report certified by the
                  auditor shall be submitted promptly by the auditor directly to
                  PHS on completion. LICENSEE shall pay for the entire cost of
                  the audit.

Article 9:
----------

Paragraph 9.04 is amended to read as follows:

         9.04     LICENSEE shall submit to PHS within sixty (60) days after each
                  calendar half-year ending June 30 and December 31 a royalty
                  report setting forth for the preceding half-year period the
                  amount of the LICENSED PRODUCTS sold or LICENSED PROCESSES
                  practiced by or on behalf of LICENSEE in each country within
                  the LICENSED TERRITORY on a product by product basis, the NET
                  SALES, and the amount of royalty accordingly due. With each
                  such royalty report, LICENSEE shall submit payment of the
                  earned royalties due. If no earned royalties are due to PHS
                  for any reporting period, the written report shall so state.
                  The royalty report shall be certified as correct by an
                  authorized officer of LICENSEE and shall include a detailed
                  listing of all deductions made under Paragraph 2.10 to
                  determine NET SALES made under Article 6 to determine
                  royalties due.

Paragraph 9.07 is amended to read as follows:

         9.07     Either LICENSEE or sublicensee of LICENSEE shall be
                  responsible for determining if any tax on royalty income is
                  owned outside the United States and shall pay any such tax and
                  be responsible for all filings with appropriate agencies of
                  foreign governments.

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Article 10:
-----------

Paragraphs 10.01 through 10.02 are amended to read as follows:

         10.01    LICENSEE shall use its reasonable efforts to bring the
                  LICENSED PRODUCTS and LICENSED PROCESSES to PRACTICAL
                  APPLICATION. "Reasonable efforts" for the purposes of this
                  provision shall include adherence to the COMMERCIAL
                  DEVELOPMENT PLAN at Appendix F and performance of the
                  BENCHMARKS at Appendix E. The efforts of a sublicensee shall
                  be considered the efforts of LICENSEE for purposes of
                  Paragraph 10.01.

         10.02    Upon the FIRST COMMERCIAL SALE, until the expiration of this
                  AGREEMENT, LICENSEE shall use its reasonable efforts to make
                  LICENSED PRODUCTS and LICENSED PROCESSES reasonably accessible
                  to the United States public.

New Paragraphs 10.03 through 10.04 are added to read as follows:

         10.03    PHS agrees to provide LICENSEE with a sample of the LICENSED
                  MATERIALS within thirty (30) days after PHS receives the
                  payment of the Materials Transfer Royalty under Paragraph 6.13
                  and, at reasonable cost to Licensee, to replace them in the
                  event of their unintentional destruction by LICENSEE. LICENSEE
                  agrees to retain control over the LICENSED MATERIALS and shall
                  not distribute or release them to others, other than its
                  contract production facilities or in furtherance of reasonable
                  research and development activities to facilitate the ability
                  of LICENSEE to take advantage of the rights hereunder in a
                  manner which is not inconsistent with the practices and
                  procedures by which LICENSEE distributes their own proprietary
                  materials, without the prior written consent of PHS, except as
                  otherwise permitted by this AGREEMENT.

         10.04    Because of the public investment in the research that
                  culminated in the LICENSED PATENT RIGHTS, LICENSEE
                  agrees, within a reasonable time after FIRST COMMERCIAL
                  SALE following regulatory approval for marketing LICENSED
                  PRODUCTS in the United States, to set pup an indigent
                  patient access program or to include in an existing
                  indigent patient access program LICENSED PRODUCTS. Under
                  the terms of LICENSEE'S indigent patient access program,
                  reasonable quantities in excess of commercially allocated
                  amounts of LICENSED PRODUCT(S) may be provided to qualified
                  indigent citizens of the United States who are not covered
                  under any public or private health plan. PHS encourages and
                  supports all contributions to the public good an thus
                  agrees that no earned royalties shall be due on such
                  donations of LICENSED PRODUCTS BY LICENSEE.

Article 11:
-----------

Paragraphs 11.01 through 11.04 are amended to read as follows:

         11.01    PHS and LICENSEE agree to notify each other promptly of each
                  infringement or possible infringement of the LICENSED PATENT
                  RIGHTS, as well as any facts which may affect the validity,
                  scope, or enforceability of the LICENSED PATENT RIGHTS of
                  which either Party becomes aware. PHS agrees to inform all
                  licensees about each infringement promptly upon receipt of
                  such information and to give the Licensee the opportunity to
                  confer with other licensees of LICENSED PATENT RIGHTS about
                  such infringement.

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<PAGE>

         11.02    Pursuant to this AGREEMENT and the provisions of Chapter 29 of
                  title 35, United States Code, LICENSEE may, but is not obliged
                  to: a) bring suit in its own name, at its own expense, and on
                  its own behalf for infringement of presumably valid claims in
                  the LICENSED PATENT RIGHTS; b) in any such suit, enjoin
                  infringement and collect for its use, damages, profits, and
                  awards of whatever nature recoverable for such infringement;
                  and c) settle any claim or suit for infringement of the
                  LICENSED PATENT RIGHTS provided, however, that (1) PHS and
                  appropriate GOVERNMENT authorities shall have the first right
                  to take such actions and (2) that PHS has informed all other
                  licensees of LICENSED PATENT RIGHTS of the infringement
                  pursuant to Paragraph 11.01. If LICENSEE desires to initiate a
                  suit for patent infringement, LICENSEE shall notify PHS in
                  writing. If PHS does not notify LICENSEE of its intent to
                  pursue legal action within * days, LICENSEE will be free
                  to initiate suit. PHS shall have a continuing right to
                  intervene in such suit. LICENSEE shall take no action to
                  compel the GOVERNMENT either to initiate or to join in any
                  such suit for patent infringement. LICENSEE may request the
                  GOVERNMENT to initiate or join in any such suit if necessary
                  to avoid dismissal of the suit. Should the GOVERNMENT be made
                  a Party to any such suit, LICENSEE shall reimburse the
                  GOVERNMENT for any costs, expenses, or fees which the
                  GOVERNMENT incurs as a result of such motion or other action,
                  including any and all costs incurred by the GOVERNMENT in
                  opposing any such motion or other action. In all cases,
                  LICENSEE agrees to keep PHS reasonably apprised of the status
                  and progress of any litigation. Before LICENSEE commences an
                  infringement action, LICENSEE shall notify PHS and give
                  careful consideration to the views of PHS and to any potential
                  effects of the litigation on the public health in deciding
                  whether to bring suit. Notwithstanding the above, if LICENSEE
                  is not the sole claimant, excluding the GOVERNMENT, to a suit
                  for infringement, LICENSEE will bear only its pro rata share
                  as determined by the total number of claimants to such suit of
                  any such expenses incurred as a result of such suit.

         11.03    In the event that a declaratory judgment action alleging
                  invalidity or non-infringement of any of the LICENSED PATENT
                  RIGHTS shall be brought against LICENSEE or raised by way of
                  counterclaim or affirmative defense in an infringement suit
                  brought by LICENSEE under Paragraph 11.02, pursuant to this
                  AGREEMENT and the provisions of Chapter 29 of Title 35, United
                  States Code or other statutes, LICENSEE may, but is not
                  obliged to: a) defend the suit in its own name, at its own
                  expense, and on its own behalf for presumably valid claims in
                  the LICENSED PATENT RIGHTS; b) in any such suit, ultimately to
                  enjoin infringement and to collect for its use, damages,
                  profits, and awards of whatever nature recoverable for such
                  infringement; and c) settle any claim or suit for declaratory
                  judgment involving the LICENSED PATENT RIGHTS-provided,
                  however, that PHS and appropriate GOVERNMENT authorities shall
                  have the first right to take such actions and shall have a
                  continuing right to intervene in such suit. If PHS does not
                  notify LICENSEE of its intent to respond to the legal action
                  within * days, LICENSEE will be free to do so. LICENSEE
                  shall take no action to compel the GOVERNMENT either to
                  initiate or to join in any such declaratory judgment
                  action. LICENSEE may request the GOVERNMENT to initiate or to
                  join any such suit if necessary to avoid dismissal of the
                  suit. Should the GOVERNMENT be made a Party to any such suit
                  by motion or any other action of LICENSEE, LICENSEE shall
                  reimburse the GOVERNMENT for any costs, expenses, or fees
                  which the GOVERNMENT incurs as a result of such motion or
                  other action. If LICENSEE elects not to defend against such
                  declaratory judgment action, PHS, at its option, may do so at
                  its own expense. In all cases, LICENSEE agrees to keep PHS
                  reasonably apprised of the status and progress of any
                  litigation. Before LICENSEE commences an infringement action,
                  LICENSEE shall notify PHS and give careful consideration to
                  the views of PHS and to any potential effects of the
                  litigation on the public health in deciding whether to bring
                  suit. Notwithstanding the above, if LICENSEE is not the sole
                  claimant, excluding the GOVERNMENT, to a suit for
                  infringement, LICENSEE will bear only its pro rata share, as
                  determined by the total number of claimants to such suit, of
                  any such expenses incurred as a result of such suit.

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<PAGE>

         11.04    In any action under Paragraphs 11.02 or 11.03, except for
                  actions where the LICENSEE opts-out under Paragraph 11.07, the
                  expenses, including costs, fees, attorney fees, and
                  disbursements, shall be paid by LICENSEE in accordance with
                  Paragraphs 11.02 or 11.03. Up to * of such expenses may be
                  credited against the royalties payable to PHS under
                  Paragraph 6.03 of this AGREEMENT under the LICENSED
                  PATENT RIGHTS in the country where the suit is filed, except
                  where LICENSEE elects to opt-out pursuant to Paragraph 11.07
                  of this AGREEMENT. In the event that such expenses exceed the
                  amount of royalties payable by LICENSEE in any calendar year,
                  the expenses in excess may be carried over as a credit on the
                  same basis into succeeding calendar years. A credit against
                  litigation expenses, however, may not reduce the royalties due
                  in any calendar year to less than the minimum annual royalty.
                  Any recovery made by LICENSEE, through court judgment or
                  settlement, first shall be applied to reimburse LICENSEE for
                  its litigation expense and then to reimburse PHS for royalties
                  withheld as a credit against litigation expenses. Any
                  remaining recoveries shall be shared by LICENSEE and PHS as if
                  the recovery was a sublicensing royalty under Paragraph 6.05
                  of this AGREEMENT.

New Paragraphs 11.07 through 11.07 are added to read as follows:

         11.06    No suit may be brought by any other Party involving the
                  LICENSED PATENT RIGHTS without express written consent of
                  LICENSEE. In the event that another Party having rights under
                  the LICENSED PATENT RIGHTS desires to initiate a suit
                  involving the LICENSED PATENT RIGHTS, LICENSEE shall be
                  immediately consulted. Appropriate procedures which provide
                  LICENSEE with adequate control of the litigation procedure
                  shall be implemented in the event that LICENSEE agrees to
                  permit such a suit to go forward. PHS shall notify any other
                  potential licensees of the LICENSED PATENT RIGHTS of this
                  provision and shall include this provision in all licenses
                  involving the LICENSED PATENT RIGHTS.

         11.07    In any action under Article 11, LICENSEE has the right to
                  opt-out from bringing or being a Party to such suit by
                  notifying PHS within * or anytime thereafter of the date that
                  LICENSEE first becomes aware of an infringement to the
                  LICENSED PATENT RIGHTS. Such course of action will not
                  affect LICENSEE'S other rights under this AGREEMENT, except
                  that LICENSEE will not share in any recovery from such a suit.
                  LICENSEE does, however, agree to fully cooperate with PHS in
                  bringing such a suit, including access to, and testimonial
                  support from, employee of LICENSEE with any out of pocket
                  expense to be borne by PHS.

Article 12:
-----------

Paragraphs 12.01 through 12.05 are amended to read as follows:

         12.01    PHS and USC offer no warranties other than those specified in
                  Article 1.

         12.02    PHS and USC do not warrant the validity of the LICENSED PATENT
                  RIGHTS and make no representations whatsoever with regard to
                  the scope of the LICENSED PATENT RIGHTS, or that the LICENSED
                  PATENT RIGHTS may be exploited without infringing other
                  patents or other intellectual property rights of third
                  parties.

         12.03    PHS and USC MAKE NO WARRANTIES, EXPRESSED OR IMPLIED, OF
                  MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY
                  SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT
                  RIGHTS OR TANGIBLE MATERIALS RELATED THERETO.

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<PAGE>

         12.04    PHS and USC do not represent that they will commence legal
                  actions against third parties infringing the LICENSED PATENT
                  RIGHTS or permit any other licensee of the LICENSED PATENT
                  RIGHTS to threaten or commence legal actions without prior
                  written notification to LICENSEE.

         12.05    LICENSEE shall indemnify and hold PHS and USC, its employees,
                  students, fellows, agents, and consultants harmless from and
                  against all liability, demands, damages, expenses, and losses,
                  including but not limited to death, personal injury, illness,
                  or property damage in connection with or arising out of: a)
                  the use by or on behalf of LICENSEE, its sublicensees,
                  directors, employees, or third parties of any LICENSED PATENT
                  RIGHTS; or b) the use of a design, manufacture, distribution,
                  or use of any LICENSED PRODUCTS, LICENSED PROCESSES, LICENSED
                  MATERIALS or biological materials, or other products or
                  processes covered by LICENSED PATENT RIGHTS by LICENSEE.
                  LICENSEE agrees to maintain a liability insurance program
                  consistent with sound business practice.

Article 13:
-----------

Paragraph 13.01 is amended to read as follows:

         13.01    The term of this AGREEMENT shall commence on the EFFECTIVE
                  DATE, and unless earlier terminated in a manner provided
                  herein, this AGREEMENT shall continue in full force and effect
                  on a country by country and LICENSED PRODUCT by LICENSED
                  PRODUCT basis until the expiration of the last to expire of
                  all VALID CLAIMS in such countries included in the LICENSED
                  PATENT RIGHTS. Notwithstanding the above, upon expiration, but
                  not termination of this AGREEMENT, and subject to the
                  provisions of Paragraph 13.09, PHS grants to LICENSEE a
                  non-exclusive, fully paid-up, irrevocable license to use or
                  otherwise exploit LICENSED MATERIALS.

Paragraphs 13.03 through 13.06 are amended to read as follows:

         13.03    In the event that LICENSEE becomes insolvent, files a petition
                  in bankruptcy, or determines to file a petition in bankruptcy,
                  LICENSEE shall immediately notify PHS in writing. Furthermore,
                  PHS shall have the right to terminate this AGREEMENT
                  immediately upon PHS's receipt of a written petition for
                  bankruptcy of LICENSEE under this Paragraph.

         13.04    LICENSEE shall have a unilateral right to terminate this
                  AGREEMENT and/or any licenses in any country or territory by
                  giving PHS thirty (30) days written notice to that effect.

         13.05    PHS shall specifically have the right to terminate or
                  modify, at its option, this AGREEMENT, if PHS determines
                  that the LICENSEE: 1) is not executing the COMMERCIAL
                  DEVELOPMENT PLAN submitted with its request for a license
                  and the LICENSEE cannot otherwise demonstrate to PHS's
                  satisfaction that the LICENSEE has taken, or can be
                  expected to take within a reasonable time, effective steps
                  to achieve PRACTICAL APPLICATION of the LICENSED PRODUCTS
                  or LICENSED PROCESSES; 2) has not achieved the BENCHMARKS
                  as may be modified under Paragraph 9.02; 3) has willfully
                  made a false statement of, or willfully omitted, a material
                  fact in the license application or in any report required by
                  the license AGREEMENT; 4) has committed a material breach
                  of a covenant or agreement contained in the license; 5) is
                  not keeping LICENSED PRODUCTS or LICENSED PROCESSES
                  reasonably available to the public after commercial use
                  commences; 6) cannot reasonably satisfy unmet health and
                  safety needs; or 7) cannot reasonably justify a failure to
                  comply with the domestic production requirement of
                  Paragraph 5.02 unless waived. In making this determination,
                  PHS will take into account the normal course of such
                  commercial development programs conducted with sound and
                  reasonable business practices and judgment and the annual
                  reports submitted by LICENSEE under Paragraph 9.02. Prior
                  to invoking this right, PHS shall give written notice to
                  LICENSEE providing LICENSEE specific notice of, and a
                  ninety (90) day opportunity to respond to, PHS's concerns
                  as to the previous items 1) to 7).

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<PAGE>

         13.06    When the public health and safety so require, and after
                  written notice to LICENSEE providing LICENSEE with a sixty
                  (60) day opportunity to respond, PHS shall have the right
                  to require LICENSEE to grant sublicenses to responsible
                  applicants, on reasonable terms, in LICENSED FIELD OF USE
                  under the LICENSED PATENT RIGHTS, unless (1) LICENSEE can
                  reasonably demonstrate that the granting of the sublicense
                  would not materially increase the availability to the
                  public of the subject matter of the LICENSED PATENT RIGHTS
                  or (2) submits a COMMERCIAL DEVELOPMENT PLAN for the
                  LICENSED PATENT RIGHTS and LICENSED PRODUCTS in such a
                  FIELD OF USE which PHS reasonably deems to moot concerns of
                  public health and safety. PHS will not require the granting
                  of a sublicense unless the responsible applicant has first
                  negotiated in good faith with LICENSEE.

Paragraph 13.09 is amended to read as follows:

         13.09    Within ninety (90) days of expiration or termination of this
                  AGREEMENT under this Article 13, a final report shall be
                  submitted by LICENSEE. Any royalty payments, including those
                  incurred but not yet paid (such as the full minimum annual
                  royalty), and those related to patent expense, due to PHS
                  shall become immediately due and payable upon termination or
                  expiration. If terminated under this Article 13, sublicensees
                  may elect to convert their sublicenses to direct licenses with
                  PHS pursuant to Paragraph 4.03. Unless otherwise specifically
                  provided for under this AGREEMENT, upon termination, but not
                  upon expiration, of this AGREEMENT, LICENSEE shall return all
                  LICENSED PRODUCTS or other materials included within the
                  LICENSED PATENT RIGHTS to PHS or provide PHS with
                  certification of the destruction thereof.

Article 14:
-----------

Paragraphs 14.06 and 14.07 are amended to read as follows:

         14.06    All notices required or permitted by this AGREEMENT shall be
                  given by prepaid, first class, registered or certified mail or
                  by an express/overnight delivery service provided by a
                  commercial carrier, or by facsimile with confirmation copy
                  sent by regular first class, prepaid mail, properly addressed
                  to the other Party at the address designated on the following
                  Signature Page, or to such other address as may be designated
                  in writing by such other Party. PHS notices to LICENSEE shall
                  be addressed: "Attention: President" with copies of such
                  notices sent to "Vice President, Corporate Development",
                  Notices shall be considered timely if such notices are
                  received on or before the established deadline date or sent on
                  or before the deadline date as verifiable by U.S. Postal
                  Service postmark or dated receipt from a commercial carrier.
                  Parties should request a legibly dated U.S. Postal Service
                  postmark or obtain a dated receipt from a commercial carrier
                  or the U.S. Postal Service. Private metered postmarks shall
                  not be acceptable as proof of timely mailing.

         14.07    This AGREEMENT shall not be assigned by LICENSEE except: a)
                  with the prior written consent of PHS, such consent not to be
                  withheld unreasonably; or b) as part of a sale or transfer of
                  substantially the entire business of LICENSEE relating to
                  operations which concern this AGREEMENT. LICENSEE shall notify
                  PHS within ten (10) days of any assignment of this AGREEMENT
                  by LICENSEE.

Paragraphs 14.10 through 14.12 are amended to read as follows:

         14.10    LICENSEE agrees to mark the LICENSED PRODUCTS or their
                  packaging sold in the United States with all applicable U.S.
                  patent numbers and similarly to indicate "Patent Pending"
                  status. ALL LICENSED PRODUCTS manufactured in, shipped to, or
                  sold in other countries shall be marked in such a manner as to
                  preserve PHS and USC patent rights in such countries.

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
Model 980611 Page 35 of 38 Final GenVec, Inc. January 7, 2000

<PAGE>

         14.11    By entering into this AGREEMENT, PHS and USC do not directly
                  or indirectly endorse any product or service provided, or to
                  be provided, by LICENSEE whether directly or indirectly
                  related to this AGREEMENT. LICENSEE shall not state or imply
                  that this AGREEMENT is an endorsement by the GOVERNMENT, PHS,
                  USC, any other GOVERNMENT organizational unit, or any
                  GOVERNMENT employee. Additionally, LICENSEE shall not use the
                  names of NIH, CDC, PHS, USC, or DHHS or the GOVERNMENT or
                  their employees in any advertising, promotional, or sales
                  literature without the prior written consent of PHS and USC.

         14.12    The Parties agree to attempt to settle amicably any
                  controversy or claim arising under this AGREEMENT or a breach
                  of this AGREEMENT. LICENSEE agrees first to appeal any such
                  unsettled claims or controversies to the designated PHS
                  official, or designee, whose decision shall be considered the
                  final agency decision. Thereafter, LICENSEE may exercise any
                  administrative or judicial remedies that may be available.

               THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
Model 980611 Page 36 of 38 Final GenVec, Inc. January 7, 2000

<PAGE>

                     APPENDIX E--BENCHMARKS AND PERFORMANCE

LICENSEE agrees to the following BENCHMARKS for its performance under this
AGREEMENT and, within thirty (30) days of achieving a BENCHMARK, shall notify
PHS that the BENCHMARK has been achieved.

It is understood that the following benchmarks are those that currently are
believed to represent the appropriate course of action for bringing a product to
market. It further is understood that changes in circumstances, including but
not limited to, changes in the applicable law, changes in the progress in the
development of a product, changes in the market for such ocular products or
changes in the type and nature of products pursued by LICENSEE, and/or delays in
the commercial or scientific progress of the product or LICENSEE'S business, may
necessitate following a different plan for commercialization of a product. In
such instances, LICENSEE may request that the schedule of BENCHMARKS be modified
and will so notify PHS in writing and submit a new schedule of BENCHMARKS
subject to the approval of PHS, such approval not unreasonably being withheld.

*

<PAGE>

                     APPENDIX F--COMMERCIAL DEVELOPMENT PLAN

Attached as Exhibit 1 (14 pages total including cover sheet and table of
contents), submitted to PHS by Licensee on September 20, 1999.

PHS Patent License Agreement-Exclusive CONFIDENTIAL L-180-97/0
Model 980611 Page 38 of 38 Final GenVec, Inc. January 7, 2000
<PAGE>

                              TABLE OF CONTENTS

I.      SUMMARY..............................................................1

II.     COMPANY PROFILE......................................................1

III.    AGE-RELATED MACULAR DEGENERATION.....................................3

IV.     PRODUCT DESCRIPTION..................................................4

V.      DEVELOPMENT AND MANUFACTURING PLAN...................................5

VI.     RESEARCH PLAN; ADENOVIRUS VECTOR DESIGN FOR OCULAR GENE THERAPY......8

VII.    CLINICAL PLAN........................................................9

VIII.   TIMELINES...........................................................10

SELECTED REFERENCES.........................................................12

APPENDIX-BENCHMARKS AND PERFORMANCE.........................................13

                                                                   Confidential
<PAGE>

I.   SUMMARY

GenVec is an emerging pharmaceutical company and a leader in the field of
gene therapy. The Company has a product-driven culture, and has demonstrated
the ability to rapidly create, evaluate and advance product candidates that
address important medical needs. GenVec also has a significant and expanding
technology base, with over 200 patents issued and pending throughout the
world. The Company is able to draw upon this technology to create technically
feasible products for initial introduction into the medical marketplace, as
well as second-generation products to extend its product franchise.

Importantly, GenVec possesses the resources and expertise to create
technically feasible gene therapy products utilizing the Pigment
Epithelium-Derived Factor (PEDF) technology, and is a strong partner for
rapidly advancing product candidates incorporating this PHS technology. These
resources and capabilities are described in more detail throughout the
Development Plan. In addition, the discovery that PEDF is an antiangiogenic
factor heightens our initial interest in this protein because of its
complementary nature with respect to our other product programs (see COMPANY
PROFILE for further details). Specifically, GenVec is a leader in the
development of therapeutic angiogenesis (proangiogenesis) agents such as
vascular endothilial growth factor for the treatment of coronary artery and
peripheral vascular diseases.

To create this leadership position, GenVec has established expertise and
capabilities pertaining to angiogenesis, gene delivery and expression systems
for such applications, and state-of-the-art process development and
manufacturing-related technologies. This expertise and our capabilities place
GenVec in the distinct position of being able to leverage not only
proangiogenic approaches in the treatment of diseases, but also antiangiogenic
strategies. We have been and are keenly interested in extending our current
angiogenic program to include a complementary antiangiogenic arm, and are
interested in pursuing the commercial development of PEDF gene therapy product
for both ocular and non-ocular indications, such as cancer. The Development
Plan submitted herein pertains to the field of ocular gene therapy
applications for which GenVec has been granted the right to pursue an
exclusive license.

II.  COMPANY PROFILE

GenVec is a pioneer in the development of novel gene-based pharmaceuticals to
treat major illnesses such as cardiovascular disease and cancer. The Company
is a leader in the field of therapeutic angiogenesis (new blood vessel
formation) for the treatment of coronary artery disease (CAD) and peripheral
vascular disease (PVD). GenVec's lead investigational product for therapeutic
angiogenesis is AdovVEGF121.10 (also referred to as BIOBYPASS-Registered
Trademark- angiogen). BIOBYPASS-Registered Trademark- is a trademark of
GenVec, Inc. This is a novel, propietary compound that combines GenVec's gene
delivery technology and adenoviral manufacturing processes with the
patern-protected VEGFI21.10 gene, which GenVec exclusively licensed from
Scios, Inc. on a worldwide basis. BIOBYPASS-Registered Trademark- angiogen is
being developed presently under the terms of a collaboration with the
Parke-Davis pharmaceutical division of Warner-Lambert Company.

                                        1

                                                                   Confidential
<PAGE>

Poor blood flow, or ischemia, is typically the major problem associated with
both CAD and PVD. The goal is to induce the formation of new blood vessels in
tissues with inadequate blood flow such as in the heart and legs. Preclinical
and toxicological testing of BIOBYPASS-Registered Trademark- angiogen was
carried out successfully by GenVec in collaboration with its external
scientific advisors. BIOBYPASS-Registered Trademark- angiogen received IND
approval and multiple Phase I studies have been completed. Phase II studies
will be initiated this year.

GenVec's other product development programs include the treatment of vascular
damage such as arterial stenosis and restenosis which frequently occur
following vascular graft procedures and balloon angioplasty. The Company is
pursuing the treatment of cancer through a drug discovery partnership with
Fuso Pharmaceutical Industries, Ltd. of Japan, as well as an alliance with
Varian Biosynergy to develop products of use in radiation oncology.

Based on our experiences and accomplishments, GenVec has the capabilities
necessary to successfully develop Pigment Epithelium-Derived Factor (PEDF)
and/or its truncated variants for an ophthalmic application. GenVec has prior
experience in the manufacture of clinical grade material as well as experience
in preclinical and clinical drug development. As described above, we have
clinical experience at Cornell Medical Center and other institutions. GenVec
has a clinical research/regulatory infrastructure; this group is capable of
taking PEDF through the clinical development phase to registration. And GenVec
has experience with the CBER gene therapy group.

GenVec, a privately held corporation, was incorporated in 1992. It holds or
has licenses to over 200 issued, allowed or pending patents worldwide, of
which 28 are issued or allowed in the United States. The Company is located in
Rockville, Maryland, and has approximately 85 employees as of July 1999. The
Company will move to a new expanded facility in Gaithersburg, Maryland at the
end of 1999.

A. GENVEC'S GOALS

   -  To utilize molecular-based treatment strategies to develop innovative
      products that significantly improve patient care

   -  To combine advances in molecular biology and gene transfer to achieve
      medical and technological breakthroughs

   -  To focus on products that have a clear clinical development path and meet
      patients' needs

B. CORPORATE EXECUTIVES

<TABLE>

   <S>                                      <C>
   HERBERT J. CONRAD                        CHAIRMAN, BOARD OF DIRECTORS
                                            PREVIOUSLY OF HOFFMAN-LAROCHE
   RONALD G. CRYSTAL, M.D.                  CHAIRMAN, SCIENTIFIC ADVISORY BOARD
                                            PRESENTLY OF CORNELL UNIVERSITY MEDICAL COLLEGE
   PAUL H. FISCHER, PH.D.                   PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
                                            PREVIOUSLY OF ONCOLOGIX, PFIZER
   JEFFREY W. CHURCH                        CHIEF FINANCIAL OFFICER
                                            PREVIOUSLY OF PRICE WATERHOUSE, MERIDIAN

                                       2
                                                                   Confidential
<PAGE>

   HENRIK S. RASMUSSEN, M.D., PH.D.         VICE PRESIDENT, CLINICAL RESEARCH AND REGULATORY AFFAIRS
                                            PREVIOUSLY OF BRITISH BIOTECH, PFIZER
   C. RICHTER KING, PH.D.                   VICE PRESIDENT, RESEARCH
                                            PREVIOUSLY OF GEORGETOWN UNIVERSITY, ONCOLOGIX
   IMRE KOVESDI, PH.D.                      CHIEF SCIENTIFIC OFFICER
                                            PREVIOUSLY OF LEDERLE
   THOMAS E. SMART                          VICE PRESIDENT, CORPORATE DEVELOPMENT
                                            PREVIOUSLY OF CELL GENESYS, G.D. SEARLE
   GRANT YONEHIRO                           VICE PRESIDENT, PRODUCT MANAGEMENT
                                            PREVIOUSLY OF CELL GENESYS

</TABLE>

C. FACILITIES OVERVIEW

   By the end of 1999, GenVec will have 44,000-sq. ft. of new laboratory and
   corporate development space in Gaithersburg, Maryland. Research and
   discovery laboratories, development/manufacturing scale-up facilities,
   animal facilities and administrative offices will all be housed in a single
   location. Future expansion space also is available.

III. AGE-RELATED MACULAR DEGENERATION

A. MEDICAL NEED AND MARKET FOR AGE-RELATED MACULAR DEGENERATION

   The National Eye Institute (NEI) has published that age-related macular
   degeneration (AMD) is now one of the major debilitating diseases of the
   aging population. Concern has been raised so much so that research in this
   area is now a high priority for the NEI and that at least $16 million is
   dedicated to research directly related to AMD. This amount in 1997
   represents an increase of 333% since 1989. As of 1997, it was estimated
   that AMD caused visual impairment in approximately 1.7 million of the 34
   million Americans age 65 and older (1). According to the Macular
   Degeneration Foundation,the prevalence for AMD in the U.S. may actually be
   higher, ranging between 4 to 13 million for individuals greater than 55 years
   old.

   AMD exists in two forms: the dry form and wet form. The dry form, though
   more prevalent, is a progressive and slow disease. In contrast, the wet
   form can very rapidly lead to severe visual impairment and blindness. The
   wet form, also known as exudative macular degeneration, results from new
   blood vessel formation as well as blood vessel leakage. Disruption of the
   blood vessels distorts the central portion of the retina, the macula, which
   is responsible for sharp, central vision. Eventually, scar tissue may form
   and lead to further distortion in the macula that eventually can cause
   severe vision loss. Approximately 10-15% of all AMD is due to that wet form.

   At present, there are no FDA-approved products for the treatment of dry
   macular degeneration and although there are several methods of treatment
   for the wet form of AMD, none of these methods are considered satisfactory
   (see Table 1). The newest technology, a photodynamic method, is considered
   by many ophthalmologists as providing only palliative care. THUS, THERE IS
   A GREAT UNMET MEDICAL NEED TO IDENTIFY NEW THERAPIES THAT CAN PROVIDE
   TREATMENT FOR AMD PARTICULARLY FOR THE AGGRESSIVE FORM, WET MACULAR
   DEGENERATION.

                                       3
                                                                   Confidential
<PAGE>

   The present submission will focus on a gene therapy approach for the
   treatment of wet macular degeneration.

   Table 1-Estimated Cost per Procedure in the Treatment of Wet Macular
   Degeneration

   PROCEDURE                             COST/PROCEDURE
   Radiation Therapy                     $1,000/visit X 8 visits = $8,000*
   Laser Surgery                         $3,000*
   Surgery (Retinal translocation)       $45,000*
   Photodynamic Therapy                  $1,200/visit x 6 visits = $7,200+

   *Costs based on estimations provided by the Macular Degeneration Foundation,
    1999
   +Cost estimate as of BioWorld Today, August 17, 1999

B. MEDICAL NEED AND MARKET FOR DIABETIC RETINOPATHY

   Diabetic retinopathy occurs to some extent in approximately 90% of the 8
   million diagnosed diabetic patients in the United States. It is one of the
   major complications of diabetes. Like exudative macular degeneration,
   blurred vision and blindness in diabetic patients results from leaking
   blood vessels and abnormal growth of new vessels in the retina. Subsequent
   vitreous hemorrhaging and retinal detachment can lead to permanent
   blindness. However, unlike exudative macular degeneration, where no
   suitable treatments exist, laser treatment is considered an acceptable
   treatment therapy for diabetic retinopathy. Therefore, the developmental
   research, and clinical plan as stated for PEDF gene therapy product, though
   focused primarily on exudative macular degeneration, is very likely
   to be applicable to diabetic retinopathy (DR) and other ocular diseases
   in which neovascularization is part of the pathogenesis. Our strategy will
   be to initiate work on relevant model systems for macular degeneration and
   based on preliminary results decide whether to expand the developmental
   program to include diabetic retinopathy. If so, animal testing will be
   expanded to include models more physiologically relevant to diabetic
   retinopathy than macular degeneration. The cost to extend the development
   program to include diabetic retinopathy would be approximately double of
   that for macular degeneration alone. Similarly, GenVec will investigate
   additional ocular indications as future data warrant.

IV.  PRODUCT DESCRIPTION

   GenVec intends to develop a gene therapy product that codes for the human
   antiangiogenic protein, Pigment Epithelium-Derived Factor (PEDF). The
   lead product will be delivered locally in the eye(s) of individuals with
   wet macular degeneration.

A. MEDICAL RATIONALE

   GenVec's approach *
                                           4
                                                                   Confidential
<PAGE>

   *

                           [Pages 5-10 are redacted]

                                       5
                                                                   Confidential
<PAGE>

*
Conclusion: GenVec has identified that ophthalmic diseases, particularly wet
macular degeneration and diabetic retinopathy, as areas of high medical need as
well as promising commercial opportunities. Utility of
Pigment-Epithelium-Derived Factor (PEDF) and its distinctive biological
properties could provide potentially a major advancement toward the treatment of
blinding eye diseases resulting from aberrant neovascularization. GenVec has
identified a Project Team for this program, and has committed considerable time
and effort in evaluating this opportunity and are intent on moving this program
forward as quickly as possible.

FOR FURTHER QUESTIONS OR CONCERNS PLEASE CONTACT:

Diane Arrington, GenVec
Associate Director of Corporate Development
12111 Parklawn Drive
Rockville, MD 28852
(301)816-3016 x230 or diana_arrington@genvec.com

                                     11
                                                                   Confidential

<PAGE>

SELECTED REFERENCES

1.   http://www.nci.nih.gov.news/varmus.html

2.   Hanahan D. and Polkman. S. (1996) Patents and emerging mechanisms of the
     angiogenci switch during tumorigenesis. Cell 86, 353-364.

3.   Auerbach, W., and Auerbach, R. (1994) Angiogenesis inhibition: a review.
     Pharmacol Ther. 63, 265-311.

4.   Dawson, D.W.; Volpen, O.V. Gillis, P.E., Crawford, S.E., Xu, H.J. Benedict,
     W., and Bouck, N.P. (1999) Pigment epithelium-derived factor: A potent
     inhibitor of angiogenesis. Science 285, 245-248.

5.   Becern, S.P. Palmer, I. Kumar, A. Steele, E. Shilbach, J.; Notario, V., and
     Chader, G.J. (1993) Overexpression of fetal human pigment
     epithelium-derived factor in Escherichia coli. A functionally active
     neurotrophic factor. J. Biol. Chern 268:23148-23156.

6.   Steele, F.R. Chader, G.J. Johnson, L.V. and Tombran-Tinic, J. (1993)
     Pigment eipthelium-derived factor: Neurotrophic activity and identification
     as a member of the serine protease inhibitor gene family. Proc. Neti Acad
     Sci USA 90: 1526-1530.

7.   Kovesdi, I. Brough, D.E. Bruder, J.T. and Wickham, T.J. (1997) Adenoviral
     vectors for genbe transfer, Curr. Opin. Biotechnol, 8, 583-589.

8.   Brough, D.E. Lizonova, A, Han. C., Kulesa, V.A., and Kovesdi, I. (1995)
     A gene transfer vector-cell line system for complete functional
     complementation of adenovirus early regions E1 and E4. J.
     Virology, 70, 6497-6501.

9.   Brough, D.E. Han, C. Kules, V.A. Lee. G.M. Carolupo, L.J. Lizonova, A. and
     Kovesdi. I. (1997) Activation of transgene expression by early egion 4 is
     responsible for a high level of persistent transgene expression from
     adenovirus vectors in vivo. J. Virology. 71. 9206-9233.

10.  Polverini, P.J. Bouck N.P., and Rastinejad F. (1991) Assay and purification
     of naturally occuring inhibitor of angiogenesis. Methods of Enzymol.
     198: 440-459.

11.  Frank, R.N., Das, A, and Weber, M.L. (1989) A model of subretinal
     neovascularization in the pigmented Curr. Eye Res. 8: 239-247.

                                      12
                                                                   Confidential

<PAGE>

                                 CONFIDENTIAL

                            PUBLIC HEALTH SERVICE

               AMENDMENT TO PATENT LICENSE AGREEMENTS EXCLUSIVE

                                  COVER PAGE

For PHS internal use only:

     Patent License Number:

     L-180-97/1
     --------------------------------------------------------------------------

     Serial Number(s) of Licensed Patent(s) and/or Patent Application(s):

     USSN 08/367,841 08/520,373; 07/894,215 and U.S. Patent 5,840,686
     --------------------------------------------------------------------------

     --------------------------------------------------------------------------

     --------------------------------------------------------------------------

     Licensee:

     GenVec, Inc.
     --------------------------------------------------------------------------

     Cooperative Research and Development Agreement (CRADA) Number (if
     applicable):

     None
     --------------------------------------------------------------------------

     Additional Remarks:

     --------------------------------------------------------------------------

     Public Benefit(s):

     --------------------------------------------------------------------------

This Patent License Agreement, hereinafter referred to as the "Amendment",
consists of this Cover Page, an attached Amendment, and a Signature Page. The
Parties to this Amendment are:

     1)     The National Institutes of Health ("NIH"), the Centers for Disease
            Control and Prevention ("CDC"), or the Food and Drug
            Administration ("FDA"), hereinafter singly or collectively
            referred to as "PHS", agencies of the United States Public Health
            Service within the Department of Health and Human Services
            ("DHHS"); and

     2)     The person, corporation, or institution identified above and/or
            on the Signature Page, having offices at the address indicated on
            the Signature Page, hereinafter referred to as "Licensee".

<PAGE>

                 AMENDMENT TO PHS PATENT LICENSE-NONEXCLUSIVE

PHS and Licensee agree as follows:

Whereas, PHS and Licensee have previously entered into a certain Patent
License - Exclusive, L-180-97/0, (hereinafter, Agreement,), having an
Effective Date of January 8, 2000 ("L-180-97") which relates to certain
Licensed Materials, Licensed Product(s), and Licensed Process(es) as defined
therein (hereinafter, "Licensed Technology").

Whereas, Licensee desires L-180-97, which relates to certain Licensed
Technology, to be amended in order to facilitate the ability of Licensee to
further exploit the commercial potential of Licensed Technology; and

Whereas, PHS, in consideration of Licensee's willingness to develop new
products, and otherwise further commercially exploit the Licensed Technology
is willing to amend L-180-97 as set forth herein to provide Licensee with the
opportunity to further commercially exploit the Licensed Technology.

Unless otherwise amended herein all definitions included in this Amendment
have the same meaning as in L-180-97.

Unless otherwise amended herein all terms and conditions of L-180-97 remain
in force, the terms and conditions of this Amendment are explicitly
incorporated into L-180-97, and this Amendment, in conjunction with L-180-97,
will be constitute the entire Agreement between Licensee and PHS.

The "Effective Date" of this Amendment will be the date of the last signature
on the attached Signature Page.

Now therefore, PHS and Licensee, intending to be bound, hereby agree to amend
L-180-97 as follows:

1.  ARTICLE 2:

Paragraph 2.19 is amended to read as follows:

     2.19  "Licensed Materials" means (a) the plasmid piFS17, as described in
           Steele, FR, et al., "Pigment epithelium-derived factor: Neurotrophic
           activity and identification as a member of the serine protease
           inhibitor gene family" PNAS, USA 90(4): 1526-1530 (Feb. 15, 1993)
           which contains the eDNA encoding human Pigment Epithelium Derived
           Factor; (b) approximately 10mul of polyclonal antisera which contains
           polyclonal antibodies which specifically recognize Pigment Epithelium
           Derived Factor (PEDF) and which is described in Wu YQ, et al. Protein
           Expression Purification 6(4): 447-56 (Aug. 1995); and (c) a small
           quantity, approximately 10 mug, of purified PEDF protein prepared as
           described in Stratikos, E, et al. Protein Science 5(12): 2575-82
           (Dec. 1996).
<PAGE>

2. ARTICLE 6;

Paragraph 6.02 is amended to read as follows:

     6.02 Licensee agrees to pay to PHS a nonrefundable minimum annual royalty
          as set forth in Appendix C. The minimum annual royalty is due and
          payable on January 1 of each calendar year and may be credited against
          any earned royalties due for sales made in that year. The minimum
          annual royalty due for the first calendar year of this Agreement may
          be prorated according to the fraction of the calendar year remaining
          between the Effective Date of this Agreement and the next subsequent
          January 1. The minimum annual royalty for the first calendar year
          of this Agreement is due as of the Effective Date of this Agreement,
          may be credited against any earned royalties due for sales made in the
          first calendar year and is payable within thirty (30) days of the
          Effective Date of this Agreement.

New Paragraphs 6.15 through 6.16 are added to read as follows:

     6.15 Licensee agrees to pay PHS, as an additional royalty, a nonrefundable,
          non-creditable Amendment Execution Royalty as set forth in Appendix C.

     6.16 Licensee agrees to pay PHS, as an additional royalty, a nonrefundable,
          non-creditable Subsequent Materials Transfer Royalty as set forth in
          Appendix C.

3. ARTICLE 10;

A new Paragraph 10.05 is added to read as follows:

     10.05 PHS agrees to provide to Licensee a copy of Interinstitutional
          Agreement (hereinafter, IIA), L-221-94/2, between PHS and USC upon
          execution of this Amendment. Licensee agrees not to disclose this IIA
          to any third party, without the prior written approval of PHS, except
          in conjunction with sublicensing activities carried out under
          Paragraph 4.01 of this Agreement. Licensee shall use reasonable care
          to maintain the confidentiality of the IIA, with at least the same
          degree of care as is exercised in respect of Licensees own proprietary
          information, and shall disclose the IIA, only to those of Licensees
          employees who have a need to review the IIA, for the purposes of
          complying with the terms of this Agreement.

4. APPENDIX C is amended to add the following new sections VIII and IX:

     VIII. AMENDMENT EXECUTION ROYALTY according to Paragraph 6.15:

          (A)  For this, the first amendment of L-180-97, the Amendment
               Execution Royalty is * due as of the Effective Date of the
               Amendment and payable within thirty (30) day of the Effective
               Date of the Amendment.

     IX.  SUBSEQUENT MATERIALS TRANSFER ROYALTY pursuant to Paragraph 6.16:

          (A)  For this, the first provision of additional Licensed Materials to
               Licensee related to Licensed Technology, Licensee agrees to pay
               PHS a Subsequent Materials Transfer Royalty in the total of *
               with the royalty being apportioned as follows: * to item (b) of
               Paragraph 2.19 as amended herein and * to item (c) of Paragraph
               2.19 as amended herein. The Subsequent Materials Transfer Royalty
               is due as of the Effective Date of this Amendment and is payable
               within thirty (30) days of the Effective Date of this Amendment.
                         SIGNATURES BEGIN ON NEXT PAGE

Amendment to PHS Patent License Agreement-Non-Exclusive CONFIDENTIAL L-180-97/1
Model 980611 Page 3 of 4 FINAL GenVec, Inc. March 2, 2000
<PAGE>

           AMENDMENT TO PHS PATENT LICENSEE AGREEMENT--NON-EXCLUSIVE

                                 SIGNATURE PAGE

For PHS:

Jack Spiegel                                       3/9/2000
--------------------------------               ----------------
Jack Spiegel, Ph.D.                            Date
Director, Division of Technology
Development and Transfer
Office of Technology Transfer
National Institutes of Health

Mailing Address for Notices:

Office of Technology Transfer
National Institutes of Health
6011 Executive Boulevard, Suite 325
Rockville, Maryland 20852-3804 U.S.A.

For Licensee (Upon, information and belief, the undersigned expressly
certifies of or affirms that the contents of any statements of Licensee made
or referred to in this document are truthful and accurate.):

by:

Thomas E. Smart                                        March 2, 2000
---------------------------------------------         ----------------
Signature of Authorized Official                      Date

Thomas E. Smart
---------------------------------------------
Printed Name

Senior Vice President, Corporate Development
---------------------------------------------
Title

Official and Mailing Address for Notices:

GenVec, Inc.
---------------------------------------------

65 West Watkins Mill Road
---------------------------------------------

Gaithersburg, MD 208878
---------------------------------------------

Attention: President
---------------------------------------------
Copies to: Vice President Corporate Development
---------------------------------------------

Any false or misleading statements made, presented, or submitted to the
Government, including any relevant omissions, under this Amendment and during
the course of negotiation of this Amendment are subject to all applicable civil
and criminal statutes including Federal statutes 31 U.S.C. Sections 3801-3812
(civil liability) and 18 U.S.C. Section 1001 (criminal liability including
fines(s) and/or imprisonment).

Amendment to PHS Patent License Agreement-Non-Exclusive CONFIDENTIAL L-180-97/1
Model 980611 Page 4 of 4 FINAL GenVec, Inc. March 2, 2000

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