Document:

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                                                                   EXHIBIT 10.4b

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of
November 1, 2000 by and among HMN Financial, Inc., a Delaware corporation (the
"Company"), Home Federal Savings Bank, a federally chartered savings bank (the
"Bank") and a wholly owned subsidiary of the Company and Timothy P. Johnson, a
resident of Stewartville, Minnesota ("Executive").

          A.   Executive currently holds the positions of Chief Financial
Officer of the Bank and Chief Financial Officer of the Company;

          B.   Executive will continue to serve as the Chief Financial Officer
of the Bank and Chief Financial Officer of the Company, all subject to the terms
and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements of the Bank, the Company and Executive set forth below,
the Bank, the Company and Executive, intending to be legally bound, agree as
follows:

          1.   EMPLOYMENT. Effective as of November 1, 2000 Executive shall
perform services for the Company and the Bank, upon the terms and conditions set
forth in this Agreement.

          2.   TERM OF EMPLOYMENT. Unless terminated at an earlier date in
accordance with Section 7 hereof, the term of Executive's employment with the
Company and the Bank under this Agreement shall be for a period of two years
commencing on November 1, 2000 and ending on October 31, 2002, or any one-year
extension hereof (such two year term, the "Employment Period"). Commencing on
the first anniversary of the execution of this Agreement and on each anniversary
thereafter, this Agreement shall be extended for a period of twelve (12) months
in addition to the then-remaining term of employment under this Agreement,
unless any of the Company, the Bank or the Executive gives contrary written
notice to the others not less than 90 days in advance of the date on which the
term of employment under this Agreement would otherwise be extended, and
PROVIDED THAT no extension shall occur unless prior to each anniversary of the
effective date, each of the Company Board and the Bank Board has reviewed a
formal evaluation of Executive's performance during the year preceding such
anniversary prepared by the Compensation Committee of the Company Board and
explicitly approved such extension of the term of this Agreement.

          3.   POSITION AND DUTIES.

          (a)  EMPLOYMENT WITH THE COMPANY. During the term of Executive's
employment with the Company and the Bank, Executive shall perform such duties
and responsibilities as the Board of Directors of the Company (the "Company
Board") or the Board of Directors of the Bank (the "Bank Board") shall assign to
him from time to time consistent with his position. Executive shall be an
executive officer of the Company and the

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Bank and Executive's title shall be "Chief Financial Officer" of the Company
and "Chief Financial Officer" of the Bank.

          (b)  PERFORMANCE OF DUTIES AND RESPONSIBILITIES. Executive shall serve
the Company and the Bank faithfully and to the best of his ability and shall
devote his full working time, attention and efforts to the business of the
Company and the Bank during his employment with the Company and the Bank.
Executive hereby represents and confirms that he is under no contractual or
legal commitments that would prevent him from fulfilling his duties and
responsibilities as set forth in this Agreement. During his employment with the
Company and the Bank, Executive may participate in charitable, foster care and
personal investment activities to a reasonable extent, and he may serve as a
director of business organizations in which he has personally invested, so long
as such activities and directorships do not interfere with the performance of
his duties and responsibilities hereunder.

          4.   COMPENSATION.

          (a)  SALARY. During the Employment Period, the Bank shall pay to
Executive an annual base salary of $125,000.00, less deductions and
withholdings, which base salary shall be paid in accordance with the Bank's
normal payroll policies and procedures. During each year after the first year of
Executive's employment hereunder, the Compensation Committee of the Company
Board shall conduct an annual performance review of Executive and thereafter
establish Executive's base salary in an amount not less than the base salary in
effect for the prior year and the amount, if any, of the bonus that will be
payable to Executive.

          (b)  EMPLOYEE BENEFITS. During the Employment Period, Executive shall
be entitled to participate in all employee benefit plans and programs of the
Bank to the extent that Executive meets the eligibility requirements for each
individual plan or program. The Bank provides no assurance as to the adoption or
continuance of any particular employee benefit plan or program, and Executive's
participation in any such plan or program shall be subject to the provisions,
rules and regulations applicable thereto. In addition, Executive shall be
eligible for stock awards and stock options of the Company as authorized from
time to time by the Company Board.

          (c)  EXPENSES. During the Employment Period, the Bank shall reimburse
Executive for all reasonable and necessary out-of-pocket business, travel and
entertainment expenses incurred by him in the performance of his duties and
responsibilities hereunder and in connection with any Continuing Professional
Education courses, subject to the Bank's normal policies and procedures for
expense verification and documentation.

          5.   CONFIDENTIAL INFORMATION. Except as permitted by the Company
Board or the Bank Board, during the Employment Period and at all times
thereafter, Executive shall not divulge, furnish or make accessible to anyone or
use in any way other than in the ordinary course of the business of the Company
or the Bank, any confidential, proprietary or secret knowledge or information of
the Company or the Bank that Executive has acquired or shall acquire during the
term of his work for the Company or the Bank as an employee,

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whether developed by himself or by others, concerning any business
strategies, marketing plans or customer lists of the Company or the Bank or
any other confidential or proprietary information or secret aspects of the
business of the Company or the Bank. Executive acknowledges that the
above-described knowledge and information constitutes a unique and valuable
asset of the Company and the Bank and represents a substantial investment of
time and expense by the Company and the Bank, and that any disclosure or
other use of such knowledge or information other than for the sole benefit of
the Company or the Bank would be wrongful and would cause irreparable harm to
the Company and the Bank. During the Employment Period, Executive shall
refrain from any acts or omissions that would reduce the value of such
knowledge or information to the Company or the Bank. The foregoing
obligations of confidentiality shall not apply to any knowledge or
information that (i) is now or subsequently becomes generally publicly known
in the form in which it was obtained from the Company or the Bank, (ii) is
independently made available to Executive in good faith by a third party who
has not violated a confidential relationship with the Company or the Bank, or
(iii) is required to be disclosed by legal process, other than as a direct or
indirect result of the breach of this Agreement by Executive.

          6.   VENTURES. If, during the Employment Period, Executive is engaged
in or associated with the planning or implementing of any project, program or
venture involving the Company or the Bank and a third party or parties, all
rights in such project, program or venture shall belong to the Company or the
Bank, as applicable. Except as approved in writing by the Company Board or the
Bank Board, Executive shall not be entitled to any interest in any such project,
program or venture or to any commission, finder's fee or other compensation in
connection therewith, other than the compensation to be paid to Executive by the
Bank as provided herein. Executive shall have no interest, direct or indirect,
in any customer or supplier that conducts business with the Company or the Bank,
unless such interest has been disclosed in writing to and approved by the
Company Board or the Bank Board, as applicable, before such customer or supplier
seeks to do business with the Company or the Bank. Ownership by Executive, as a
passive investment, of less than 2.5% of the outstanding shares of capital stock
of any corporation listed on a national securities exchange or publicly traded
in the over-the-counter market shall not constitute a breach of this Section 6.

          7.   TERMINATION OF EMPLOYMENT.

          (a)  The Executive's employment with the Company and the Bank shall
terminate immediately upon:

               (i)  Executive's receipt of written notice from the Company or
                    the Bank of the termination of his employment;

               (ii) Receipt by the Company or the Bank of Executive's written
                    resignation from the Company or the Bank;

               (iii) Executive's Disability (as defined below);

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               (iv) Executive's death; or

               (v)  the expiration of the Employment Period.

          (b)  The date upon which Executive's termination of employment with
the Company and the Bank occurs shall be the "Termination Date."

          (c)  In the event of Executive's termination of employment for any of
the foregoing reasons, Executive shall immediately resign as a director and/or
officer of the Company and the Bank and any of their subsidiaries.

          8.   PAYMENTS UPON TERMINATION OF EMPLOYMENT.

          (a)  If prior to a Change in Control (as defined in the separate
Change-in-Control Agreement attached hereto (the "Change-in-Control Agreement"))
or after the Transition Period as defined in the Change-in-Control Agreement,
Executive's employment with the Company and the Bank is terminated:

               (i)  by the Company or Bank for any reason other than (A) for
                    Cause (as defined below), or (B) the delivery of a written
                    notice to Executive that the Bank elects not to extend the
                    term of this Agreement, or

               (ii) by Executive as a result of his resignation for Good Reason
                    (as defined below), or

               (iii) by reason of Executive's Disability (as defined below),

the Bank shall:

               (i)  pay to Executive as severance pay an amount equal to his
                    current base salary during the remaining period of the
                    Employment Period; and

               (ii) if Executive elects to continue his group health insurance
                    coverage with the Bank following the termination of his
                    employment with the Company and the Bank, reimburse him for
                    the full cost of the premiums he is required to pay to
                    maintain such coverage at the same level of coverage that
                    was in effect as of the Termination Date for the remaining
                    term of the Employment Period.

Any amount payable to Executive as severance pay or reimbursement for the cost
of the continuation of his group health insurance coverage hereunder shall be
subject to deductions and withholdings and shall be paid to Executive by the
Bank in approximately equal monthly installments during the remaining term of
this Agreement commencing on the first

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normal payroll date of the Bank following the expiration of all applicable
rescission periods provided by law and continuing monthly thereafter.

The Bank shall be entitled to deduct from any severance pay otherwise payable to
Executive hereunder: (i) any amount earned as income by Executive after the
Termination Date as a result of self-employment or employment with any other
employer, other than income resulting from Executive's foster care duties, and
(ii) any amount received by Executive after the Termination Date under any
short-term or long-term disability insurance plan or program provided to him by
the Bank. In addition, the Bank shall be entitled to cease making reimbursement
payments to Executive for the cost of the continuation of his group health
insurance coverage with the Bank after the Termination Date if Executive becomes
eligible for comparable group health insurance coverage from any other employer.
For purposes of mitigation and reduction of the Bank's financial obligations to
Executive under this Section 8(a), Executive shall promptly and fully disclose
to the Bank in writing: (i) the nature and amount of any such earned income from
self-employment or employment with any other employer, (ii) the amount of any
such disability insurance payments, or (iii) the fact that he has become
eligible for comparable group health insurance coverage from any other employer,
and Executive shall be liable to repay any amounts to the Bank that should have
been so mitigated or reduced but for Executive's failure or unwillingness to
make such disclosures.

          (b)  If after a Change in Control and during the Transition Period,
Executive's employment terminates, Executive's rights to payments and benefits
shall be governed by the Change-in-Control Agreement.

          (c)  If Executive's employment with the Company or the Bank is
terminated by reason of:

               (i)  Executive's abandonment of his employment or Executive's
                    resignation for any reason other than Good Reason (as
                    defined below),

               (ii) termination of Executive's employment by the Company or the
                    Bank for Cause (as defined below),

               (iii) Executive's death, or

               (iv) the expiration of the Employment Period,

the Bank shall pay to Executive or his beneficiary or his estate, as the case
may be, his base salary through the Termination Date.

          (d)  "Cause" hereunder shall mean:

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               (i)  an act or acts of dishonesty undertaken by Executive and
                    intended to result in substantial gain or personal
                    enrichment of Executive at the expense of the Company or the
                    Bank;

               (ii) unlawful conduct or gross misconduct that is willful and
                    deliberate on Executive's part and that, in either event, is
                    injurious to the Company or the Bank;

               (iii) the conviction of Executive of a felony;

               (iv) failure of Executive to perform his duties and
                    responsibilities hereunder or to satisfy his obligations as
                    an officer or employee of the Company or the Bank, which
                    failure has not been cured by Executive within 30 days after
                    written notice thereof to Executive from the Company or the
                    Bank; or

               (v)  material breach of any terms and conditions of this
                    Agreement by Executive not caused by the Company or the
                    Bank, which breach has not been cured by Executive within
                    ten days after written notice thereof to Executive from the
                    Company or the Bank.

          (e)  "Good Reason" hereunder shall mean:

               (i)  material breach of any terms and conditions of this
                    Agreement by the Company or the Bank not caused by
                    Executive, which breach has not been cured by the Company or
                    the Bank within ten days after written notice thereof to the
                    Company or the Bank from Executive;

               (ii) the Company or the Bank shall require Executive to relocate
                    to any place other than a location within thirty-five miles
                    of the location at which the Executive performed his
                    primary duties immediately prior to the requirement by
                    the Company or the Bank to relocate or, if the Executive
                    performed such duties at the Company's principal
                    executive offices, the Company or the Bank shall relocate
                    its principal executive offices to any location other
                    than a location within thirty-five miles from the
                    location of the principal executive offices; or

               (iii) a material reduction of Executive's base salary,
                    perquisites or benefits unless such reduction is part of a
                    general reduction in the base salaries, perquisites and/or
                    benefits for all executive officers of the Company of the
                    Bank.

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          (f)  "Disability" hereunder shall mean the inability of Executive to
perform on a full-time basis the duties and responsibilities of his employment
with the Company and the Bank by reason of his illness or other physical or
mental impairment or condition, if such inability continues for an uninterrupted
period of 180 days or more during any 360-day period. A period of inability
shall be "uninterrupted" unless and until Executive returns to full-time work
for a continuous period of at least 30 days.

          (g)  In the event of termination of Executive's employment, the sole
obligation of the Company and the Bank shall be its obligation to make the
payments called for by Sections 8(a) or 8(c) hereof, as the case may be, and the
Company and the Bank shall have no other obligation to Executive or to his
beneficiary or his estate, except as otherwise provided by law, under the terms
of any other applicable agreement between Executive and the Company or the Bank
or under the terms of any employee benefit plans or programs then maintained by
the Bank in which Executive participates.

          (h)  Notwithstanding the foregoing provisions of this Section 8, the
Bank shall not be obligated to make any payments to Executive under Section 8(a)
hereof unless Executive shall have signed a release of claims in favor of the
Bank and the Company in a form to be prescribed by the Company Board or the Bank
Board, all applicable consideration periods and rescission periods provided by
law shall have expired and Executive is in strict compliance with the terms of
Section 5 hereof as of the dates of the payments.

          9.   RETURN OF RECORDS AND PROPERTY. Upon termination of his
employment with the Company and the Bank, Executive shall promptly deliver to
the Bank any and all Company or Bank records and any and all Company or Bank
property in his possession or under his control, including without limitation
any manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, printouts, computer disks, computer tapes, source codes,
data, tables or calculations and all copies thereof, documents that in whole or
in part contain any trade secrets or confidential, proprietary or other secret
information of the Company or the Bank and all copies thereof, and keys, access
cards, access codes,  passwords, credit cards, personal computers, telephones
and other electronic equipment belonging to the Company or the Bank.

          10.  REMEDIES.

          (a)  EQUITABLE. Executive acknowledges that it would be difficult to
fully compensate the Company or the Bank for monetary damages resulting from any
breach by him of the provisions of Section 5 hereof. Accordingly, in the event
of any actual or threatened breach of any such provisions, the Company and the
Bank shall, in addition to any other remedies they may have, be entitled to
injunctive and other equitable relief to enforce such provisions, and such
relief may be granted without the necessity of proving actual monetary damages.

          (b)  ARBITRATION. Except for disputes arising under Section 5 hereof,
all disputes involving the interpretation, construction, application or alleged
breach of this Agreement and all disputes relating to the termination of
Executive's employment with the

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Company or the Bank shall be submitted to final and binding arbitration in
Minneapolis, Minnesota. The arbitrator shall be selected and the arbitration
shall be conducted pursuant to the then most recent Employment Dispute
Resolution Rules of the American Arbitration Association. The decision of the
arbitrator shall be final and binding, and any court of competent
jurisdiction may enter judgment upon the award. All fees and expenses of the
arbitrator shall be shared equally by Executive and the Company or the Bank.
The arbitrator shall have jurisdiction and authority to interpret and apply
the provisions of this Agreement and relevant federal, state and local laws,
rules and regulations insofar as necessary to the determination of the
dispute and to remedy any breaches of the Agreement and/or violations of
applicable laws, but shall not have jurisdiction or authority to award
punitive damages or alter in any way the provisions of this Agreement. The
arbitrator shall have the authority to award attorneys' fees and costs to the
prevailing party. The parties hereby agree that this arbitration provision
shall be in lieu of any requirement that either party exhaust such party's
administrative remedies under federal, state or local law.

          11.  MISCELLANEOUS.

          (a)  GOVERNING LAW. All matters relating to the interpretation,
construction, application, validity and enforcement of this Agreement shall be
governed by the laws of the State of Minnesota without giving effect to any
choice or conflict of law provision or rule, whether of the State of Minnesota
or any other jurisdiction, that would cause the application of laws of any
jurisdiction other than the State of Minnesota.

          (b)  ENTIRE AGREEMENT. Except for a Change in Control Agreement
between Executive and the Bank dated the date hereof, this Agreement contains
the entire agreement of the parties relating to the subject matter of this
Agreement and supersedes all prior agreements and understandings with respect to
such subject matter, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
that are not set forth herein.

          (c)  AMENDMENTS. No amendment or modification of this Agreement shall
be deemed effective unless made in writing and signed by the parties hereto.

          (d)  NO WAIVER. No term or condition of this Agreement shall be deemed
to have been waived, except by a statement in writing signed by the party
against whom enforcement of the waiver is sought. Any written waiver shall not
be deemed a continuing waiver unless specifically stated, shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.

          (e)  ASSIGNMENT. This Agreement shall not be assignable, in whole or
in party, by either party without the written consent of the other party.

          (f)  COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and such counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.

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          (g)  SEVERABILITY. To the extent that any portion of any provision of
this Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this Agreement shall be
unaffected and shall continue in full force and effect.

          (h)  CAPTIONS AND HEADINGS. The captions and paragraph headings used
in this Agreement are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.

          IN WITNESS WHEREOF, Executive, the Company and the Bank have executed
this Agreement as of the date set forth in the first paragraph.

                                        HMN FINANCIAL, INC.

                                        By /s/ M. F. Schumann
                                           ------------------------------

                                           Its Chairman
                                               --------------------------

                                        HOME FEDERAL SAVINGS BANK

                                        By /s/ M. F. Schumann
                                           ------------------------------
                                           Its Chairman
                                               --------------------------

                                        TIMOTHY P. JOHNSON

                                        /s/ Timothy P. Johnson
                                        ---------------------------------

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                                                                 EXHIBIT 10.16.1

                                LICENSE AGREEMENT

         This AGREEMENT made this twentieth (20th) day of December, 2000 (the
"Effective Date"), by and between Northwestern University, an Illinois
corporation having a principal office at 633 Clark Street, Evanston, Illinois
60208 (hereinafter referred to as "Northwestern") and GenVec, Inc., a Delaware
corporation having a principal office at 65 West Watkins Mill Road,
Gaithersburg, Maryland 20878-4021 (hereinafter referred to as "Licensee") (each
a "Party" and collectively the "Parties").

                                   WITNESSETH
         WHEREAS, Northwestern is the owner of certain patent rights relating to
* and has the right to grant licenses hereunder, subject to a royalty-free,
nonexclusive license heretofore granted to the United States Government;
         WHEREAS, Northwestern desires to have the patent rights developed and
commercialized to benefit the public and is willing to grant a license
hereunder;
         WHEREAS, Licensee has represented to Northwestern that Licensee will
commit itself to a thorough, vigorous and diligent program to develop and
subsequently manufacture, market, offer for sale and sell products utilizing the
patent rights;
         WHEREAS, Licensee desires to obtain a license under the patent rights
upon the terms and conditions hereafter set forth;
         NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Parties hereto agree as follows:

                             ARTICLE 1 - DEFINITIONS
         1.1 "AFFILIATE" shall mean any corporation, firm, partnership or other
entity, which controls, is controlled by or is under common control with a
Party. For the purposes of this definition, "control" shall mean any right or
collection of rights that together allow direction on any vote with respect to
any action by an entity or the direction of management and operations of that
entity. Such right or collection of rights includes without limitation (a) the
authority to act as sole member or shareholder or partner with a majority
interest in an entity; (b) a majority interest in an entity; and (c) the
authority to appoint, elect, or approve at least a majority of the governing
board of that entity.
         1.2 "FDA" shall mean the United States Food & Drug Administration and
any successor agency thereto.
         1.3 "FIELD" shall mean Gene Therapy for ocular diseases only,
including but not limited to, macular degeneration, cancer of the eye, diabetic
retinopathy, ocular histoplasmosis syndrome, and retinopathy associated with
neovascularization in neonatals. All other uses or applications unless provided
for herein are excluded.

[*] = CERTAIN INFORMATION CONTAINED 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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         1.4 "IND" shall mean Investigational New Drug Application suitable for
obtaining approval to ship a Licensed Product for the purpose of safety and
effectiveness testing of such Licensed Product.
         1.5 "LICENSED PRODUCT" shall mean tangible materials which, in the
course of manufacture, use, offer to sell, sale, or importation by or on behalf
of Licensee would, in the absence of the License, infringe one or more claims of
the Patent Rights that have not been held invalid or unenforceable by an
unappealed or unappealable judgment of a court or competent jurisdiction or is
otherwise expired.
         1.6 "COMBINATION PRODUCT(S)" shall mean a Licensed Product(s) that is
sold in combination with one or more other products, active therapeutic
agent(s), or agents of administration of Licensed Product which are not Licensed
Product(s).
         1.7 "NDA" shall mean an application suitable for obtaining Regulatory
Approval, the approval of which is necessary to market Licensed Products in the
United States, whether such application is pending or approved or has been filed
with respect to the Licensed Products, submitted to the FDA under applicable
United States Law.
         1.8 "NET SALES" shall mean the total gross amounts received by Licensee
and sublicensees or Affiliates 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
taxes and excise duties and other governmental charges based on sales, turnover
or delivery of such Licensed Products and actually paid or allowed by Licensee
or sublicensee; (d) amounts allowed or credited due to returns or uncollectible
amounts. In the event Licensee or sublicensee or Affiliate sells Combination
Product(s), Net Sales from such sales for the purposes of calculating the
amounts due under 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 Product(s) sold separately and B is the gross selling
price of the active therapeutic agent(s), or agents of administration of the
Licensed Product sold separately.
         1.9 "PATENT RIGHTS" shall mean the patents and patent applications
listed on Exhibit A attached hereto and incorporated herein by reference, and
any patents which issue from the patent applications listed on Exhibit A
attached hereto and incorporated herein by reference, and all substitutions,
additions, extensions, reissues, renewals, divisions, continuations and
continuations-in-part thereof and any foreign counterparts thereto.
         1.10 "VALID CLAIM" shall mean either (a) a claim of an issued and
unexpired patent included within the Patent Rights, which has not been held
invalid by a decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed for appeal, or
(b) a claim of a pending patent application included within the Patent Rights,
which claim has not been abandoned or finally disallowed without the possibility
of appeal or refiling of such application. If a claim of a pending application
has not been issued as a claim of an issued patent, in less than seven (7) years
after the filing date of such claim, such pending claim shall not be a Valid
Claim for purposes of this Agreement unless and until the patent is issued
including such claim.

                                       2

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         1.11 "REGULATORY APPROVAL" shall mean the approval of either the FDA or
a foreign counterpart thereto required to commence commercial sale of a Licensed
Product in such country in the Territory.
         1.12 "TERRITORY" shall mean the entire world.
         1.13 "FIRST COMMERCIAL SALE" shall mean with respect to any Licensed
Product on a country-by-country basis, the first sale for use or consumption of
such Licensed Product following approval by the FDA or comparable foreign
regulatory authority. A transfer of the Licensed Product 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 under this Agreement and/or (b) prior to Licensee's
receipt of approval of a PLA, NDA or equivalent by the FDA (or from the
governing health authority of any other country) for use of such Licensed
Product in humans, shall not be considered a First Commercial Sale in the
applicable country.
         1.14 "GENE THERAPY" shall mean the introduction of nucleic acid into a
person with the purpose of modifying the functions or behaviors of cells of the
human body, either by EX VIVO introduction of nucleic acid into cells, which
cells are later introduced into such persons' body, or by IN VIVO introduction
of nucleic acid into the person's body, to be incorporated into cells of such
person (nucleic acid being any composition of matter that includes two or more
covalently joined nucleotides and/or variants thereof).
         1.15 "CONFIDENTIAL INFORMATION" shall mean any and all information
contained in written or graphic form and marked "Confidential" which is
forwarded to one by the other, or, if disclosed orally, is described by a
written summary thereof sent to Recipient within thirty (30) days of initial
oral disclosure.
         1.16 "PLA" shall mean 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.

                               ARTICLE II - GRANT
         2.1 Northwestern hereby grants to Licensee and its Affiliates a
license, with the right to sublicense, under Patent Rights to make, have made,
use, import, offer for sale and sell Licensed Products in the Territory in the
Field. Such license shall be exclusive in the Field.
         2.2 The grant under Paragraph 2.1 shall be subject to the obligations
of Northwestern and of Licensee to the United States Government under any and
all applicable laws, regulations, and executive orders including those set forth
in 35 U.S.C. Section 200, et seq.
         2.3 Northwestern retains the right to utilize Patent Rights for
noncommercial research purposes and to grant licenses to third parties outside
of the Field as defined herein.
         2.4 Licensee may grant and authorize sublicenses within the scope of
the license granted to Licensee pursuant to this Agreement. Licensee shall
notify Northwestern in writing of grant of any such sublicense which notice
shall identify the sublicensee and the business terms of such sublicensees as
they relate to Licensed Products. The identity of all sublicensees and the
business terms shall be Confidential Information of Licensee.

                                       3

<PAGE>

                     ARTICLE III - CONFIDENTIAL INFORMATION
         3.1 Northwestern and Licensee each agree that all Confidential
Information shall be received in strict confidence, used only for the purposes
of this Agreement, and not disclosed by the recipient (except as required by law
or court agency or administrative order), its agents or employees to any third
party without the prior written consent of an authorized officer of the
disclosing Party, unless such Confidential Information (a) was in the public
domain at the time of disclosure, (b) later became part of the public domain
through no act or omission of the recipient, its employees, agents, successors
or assigns, (c) was lawfully disclosed to the recipient by a third party having
the right to disclose it, (d) was already known by the recipient at the time of
disclosure, (e) was independently developed, as recipient can by competent
written proof demonstrate, by persons in its employ or consultants who have had
no contact or exposure to, directly or indirectly, with Confidential Information
received hereunder, (f) is required by law, regulations, court or administrative
agency order, provided that recipient gives prior written notice of such
disclosure to the disclosing party and takes all reasonable and lawful actions
to avoid and/or minimize the extent of such disclosure, or (g) is required to be
submitted to a government agency to obtain and maintain the approvals and
clearances of Licensed Products. Subject to Paragraph 3.2, disclosure of
Confidential Information may also be made to Affiliates, distributors,
customers, and agents, to nonclinical and clinical investigators, collaborators,
contract manufacturers, and to consultants underlying such disclosure.
Northwestern and Licensee also agree that Confidential Information may be orally
disclosed by one Party to the Other Party. Such Confidential Information shall
be confirmed in writing and designated "Confidential" within thirty (30) days of
disclosure for the provisions of this Article III to apply.
         3.2 Each Party's obligation of confidence hereunder shall be fulfilled
by using at least the same degree of care with the other Party's Confidential
Information as it uses to protect its own confidential information. This
obligation shall exist while this Agreement is in force and for a period of two
(2) years thereafter; provided, however, with respect to Confidential
Information pertaining to sublicenses or other party agreements the obligations
of recipient under this Agreement shall, subject to Paragraph 3.1 above, survive
any termination or expiration of this Agreement until the expiration of the
applicable confidentiality obligations of those third party agreements.
         3.3 This Agreement may be distributed solely (a) to those employees,
agents, active or prospective investors or corporate partners, professional
advisors, and independent contractors of Northwestern or Licensee who have a
need to know its contents, (b) to those persons whose knowledge of its contents
will facilitate performance of the obligations of the parties under this
Agreement, (c) to those persons, if any, whose knowledge of its contents is
essential in order to permit Licensee or Northwestern to maintain or secure the
benefits under policies of insurance, or (d) as may be required by law or
regulation or by court or administrative agency order or the Securities and
Exchange Commission, provided that the recipient of Confidential Information
give prior written notice of such disclosure to the disclosing party and takes
all reasonable and lawful actions to avoid and/or minimize the extent of such
disclosure.

                                       4

<PAGE>

                    ARTICLE IV - MILESTONES AND DUE DILIGENCE
         4.1 Licensee shall, upon execution of this Agreement, submit to
Northwestern a preliminary development and business plan that sets forth an
outline of Licensee's intended efforts to develop and commercialize Licensed
Products. Such plan shall include a summary of personnel, expenditures and
estimated timing for the development of Licensed Products and estimates of the
market potential for Licensed Products.
         4.2 Licensee shall use commercially reasonable efforts to comply with
the following milestones:
               (a)  completion of GMP manufacturing of Licensed Product within *
                    from the Effective Date;
               (b)  completion of toxicological studies for IND and submission
                    of an IND for a Licensed Product within * from the Effective
                    Date;
               (c)  completion of a safety trial in humans (Phase I clinical
                    trial) for a Licensed Product within * from the Effective
                    Date;
               (d)  completion of a Phase II clinical trial for a Licensed
                    Product within * from the Effective Date;
               (e)  completion of a Phase III clinical trial for a Licensed
                    Product within * from the Effective Date;
               (f)  submission to an applicable regulatory authority of an NDA
                    or PLA for a Licensed Product within * from the Effective
                    Date;
         The foregoing milestones may be satisfied by Licensee and/or its
Affiliates or sublicensees. Licensee agrees to devote that level of resources to
the commercialization of a Licensed Product as other companies in the industry
customarily devote to products of similar commercial potential. Further, it is
understood by Northwestern that the foregoing milestones are believed to
represent the appropriate course of action for bringing a product to the market.
It is further 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 ocular products or changes
in the type and nature of products pursued by Licensee, and/or delays in the
commercial or scientific progress of a 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 milestones be modified
and will so notify Northwestern in writing and submit a new schedule of
milestones subject to approval of Northwestern, such approval not to be
unreasonably withheld. Northwestern agrees that receipt of a milestone payment
pursuant to Article 5 shall be construed as due diligence toward Licensee's
compliance with such milestone.

                               ARTICLE V - PAYMENT
         In consideration of the license granted by Northwestern to Licensee
under this Agreement, Licensee shall pay to Northwestern the following:
         5.1 A non-creditable, non-refundable licensing fee of $* upon execution
of this Agreement, and within 60 days of the Effective Date.
         5.2 The following non-creditable and non-refundable milestone payments
on the earlier of the dates specified or upon achievement of particular
milestones in the development of Licensed Products:
               (a)  $* upon submission of the first IND for a Licensed Product,
                    or *;

                                       5

<PAGE>

               (b)  $* upon the first initiation of a Phase II clinical trial of
                    a Licensed Product or *;
               (c)  $* upon the first initiation of a Phase III clinical trial
                    of a Licensed Product or *;
               (d)  $* upon the first Regulatory Approval of a Licensed Product
                    in a major market country (United States, Japan, France,
                    Germany, United Kingdom, Italy) or *.
          5.3 Beginning the first full calendar year after the Regulatory
     Approval of a Licensed Product in a major market country, or the year 2009,
     whichever comes first, Licensee shall pay to Northwestern minimum royalty
     payments of $* per year, payable on January 30 of the year. Any such
     minimum royalty payments shall be fully creditable against any payments
     required under Paragraph 5.4.
          5.4 A running royalty of * percent (*%) of Net Sales of Licensed
     Products manufactured or sold in a country within the Territory covered by
     a Valid Claim of an issued patent. In the event that Licensee enters into
     other licensee agreement(s) with third party(ies) with respect to
     intellectual property which in Licensee's opinion is legally required or
     which is cost effective, improves the manufacture, use or sale of Licensed
     Product(s), Licensee may offset amounts paid to such third party(ies)
     against earned royalties due Northwestern hereunder, by reducing Licensee's
     obligation to Northwestern by *% for each *% of royalties which Licensee is
     obligated to pay to third parties; provided, however, the minimum earned
     royalty rate due Northwestern shall not be less than * percent (*%). In the
     event that there is no issued Valid Claim in the Patent Rights covering
     such Licensed Product(s) in a given country, but there is pending claim
     within the Licensed Patent Rights covering such Licensed Product(s) and
     such claims have been pending for seven (7) years or less from the filing
     date of such claims, the royalties set forth above shall be reduced by *
     percent (*%) (hereinafter the "Patent Pending Reduction") until the date
     when such pending claims are allowed for issuance by the appropriate
     authority with such country.
          5.5 In addition to the running royalties under Paragraph 5.4, *
     percent (*%) of the following sublicensing royalties/fees received by
     Licensee from the sublicensing of the Patent Rights: (i) execution or
     up-front royalties/fees, (ii) minimum annual royalties/fees, and (iii)
     benchmark or milestone royalties/fees. Such sublicensing royalties/fees do
     not include royalties or fees received by Licensee for the purchase of
     equity, debt financing, research and/or development funds, the license or
     sublicense of intellectual property other than the Licensed Product(s) or
     reimbursement for patent or other expenses.

                  ARTICLE VI - PAYMENT, REPORT AND RECORDS
         6.1      PAYMENT DATES AND REPORTS
                  Upon the First Commercial Sale of Licensed Product(s) and
within sixty (60) days after the end of each calendar quarter of each year
during the term of this Agreement (including the last day of any calendar
quarter following the expiration of this Agreement), Licensee shall pay to
Northwestern, all royalties accruing during such calendar quarter. Such payments
shall be accompanied by a statement showing the Net Sales of each Licensed
Product by Licensee and its sublicensees in each country, the applicable royalty
rate and the calculation of the amount of royalty due.

                                       6

<PAGE>

         6.2      ACCOUNTING
                  a.       PAYMENTS IN U.S. DOLLARS
                            All dollar sums referred to in this Agreement are
expressed in U.S. dollars and Net Sales used for calculating the royalties and
other sums payable to Northwestern by Licensee pursuant to Paragraph 6.1 shall
be computed in U.S. dollars. For purposes of determining the amount of royalties
due, the amount of Net Sales in any foreign currency shall be computed by
converting such amount into U.S. dollars at the prevailing commercial rate of
exchange for purchasing U.S. dollars with such foreign currency in question as
quoted by Citibank in New York on the last business day of the calendar quarter
for which the relevant royalty payment is to be made by Licensee.
                  b.       BLOCKED ROYALTIES
                           Notwithstanding the foregoing, if by reason of any
restrictive exchange laws or regulations Licensee or any Affiliate or
sublicensee hereunder shall be unable to convert to U.S. dollars an amount
equivalent to the royalty payable by Licensee hereunder in respect of Licensed
Product sold for funds other than U.S. dollars, Licensee shall notify
Northwestern promptly with an explanation of the balance thereof due hereunder
and not paid in funds other than U.S. dollars after, and to the extent that such
restrictive exchange laws or regulations are lifted so as to permit such
conversion to United States dollars, of which lifting Licensee shall promptly
notify Northwestern. At its option, Northwestern shall meanwhile have the right
to request the payment (to it or to a nominee), and upon such request Licensee
shall pay, or cause to be paid, all such amounts (or such portions thereof as
are specified by Northwestern) in funds, other than U.S. dollars, designated by
Northwestern and legally available to Licensee under such then existing
restrictive exchange laws or regulations.
     6.3 RECORDS
         Licensee shall keep, and shall cause its Affiliates and sublicensees to
keep, for three (3) years from the date of payment of royalties, complete and
accurate records of sales of each Licensed Product by Licensee; its Affiliates
and its sublicensees in sufficient detail to enable the accruing royalties to be
determined accurately. Northwestern shall have the right during this period of
three (3) years after receiving any report with respect to royalties due and
payable to appoint, at its expense, an independent certified public accountant
to inspect the relevant records of Licensee, its Affiliates, and its
sublicensees to verify such report. Northwestern shall submit the name of said
accountant to Licensee for approval; said approval shall not be unreasonably
withheld. Licensee shall make its records and those of its Affiliates, and use
reasonable efforts to have its sublicensees make available its records for
inspection by such independent certified public accountant during regular
business hours at such place or places where such records are customarily kept,
upon reasonable notice from Northwestern, to the extent necessary to verify the
accuracy of the reports and payments with not more than one (1) inspection per
calendar year. Northwestern agrees to hold in strict confidence all information
concerning royalty payments and reports, and all information learned in the
course of any audit or inspection, except to the extent necessary for
Northwestern to reveal such information in order to enforce its rights under
this Agreement or as may be required by law. If royalties are understated by 10
percent (10%) or more in Licensee's favor, the Licensee shall, within ten (10)
days of receipt of the audit report, pay the balance due Northwestern plus all
reasonable costs of the audit or inspection and interest

                                       7

<PAGE>

at the prime rate as quoted by Citibank in New York from the date at which such
balance would have otherwise been due and payable. If royalties are understated
by less than ten percent (10%), Licensee shall include such understated amount
with the next scheduled payment pursuant to Paragraph 6.1.

                            ARTICLE VII - PUBLICATION
         Northwestern will be free to publish the results of any research
conducted at Northwestern, that may be related to Patent Rights or Licensed
Products and use any information for purposes of research, teaching, and other
educationally-related matters. Such publication rights shall not require
Licensee's approval, except only if Licensee has provided Northwestern with any
Confidential Information or proprietary information of Licensee, in which case
Northwestern agrees to submit to Licensee any proposed publication or
presentation related to Patent Rights at least thirty (30) days prior to
publication or public disclosure. Licensee, within twenty (20) days after
receipt, shall advise in writing if there is any Confidential Information or
proprietary information of Licensee or potentially patentable subject matter. At
Licensee's written request Northwestern shall remove any such Confidential
Information or proprietary information from such proposed publication or public
disclosure.

                        ARTICLE VIII - PATENT PROSECUTION
         8.1 Northwestern shall apply for, seek prompt issuance of, and maintain
during the term of this Agreement the Patent Rights in the United States and in
the foreign countries listed in Exhibit A hereto. The filing, registration,
prosecution, and maintenance of all Patent Rights shall be the primary
responsibility of Northwestern; provided, however, Licensee shall have
reasonable opportunities to advise Northwestern and shall cooperate with
Northwestern in such prosecution, filing and maintenance.
         8.2 Licensee agrees to pay for one-third (1/3) of all necessary and
reasonable out-of-pocket legal expenses incurred prior to the Effective Date by
Northwestern in obtaining and maintaining Patent Rights. Licensee shall
reimburse Northwestern for such expenses within thirty (30) days of receiving an
itemized invoice for payment thereof. For all necessary and reasonable
out-of-pocket legal expenses incurred after the Effective Date by Northwestern
in obtaining and maintaining Patent Rights, Licensee agrees to pay the lesser of
one-third (1/3) or a pro rata share of such expenses, where such pro rata share
is determined by the number of third parties with option or license to any
and/or all of the Patent Rights hereunder at the time Northwestern invoices
Licensee for such expenses ("Third Party Rights"). On a monthly basis,
Northwestern shall submit to Licensee an itemized invoice for such expenses
incurred during the prior month period, together with documentation in a form
reasonably acceptable to Licensee for applicable services with respect to such
expenses rendered by third party vendors, and the number of Third Party rights
then in effect. Licensee shall reimburse Northwestern the applicable amount of
such expenses within thirty (30) days of receiving an invoice for payment
thereof. Licensee may raise any objections to such amounts invoiced within the
thirty (30) day time period for payment.
         8.3 Northwestern shall permit Licensee to provide comments and
suggestions with respect to the selection of patent counsel, preparation,
filing, prosecution, and maintenance of Patent Rights, which comments and
suggestions shall be considered by

                                       8

<PAGE>

Northwestern, but may not be accepted. Following execution of this Agreement and
receipt of the license issue fee, Northwestern shall provide Licensee with
copies of all documents relating to patents or patent applications within the
Patent Rights as soon as is reasonably practical. Northwestern agrees to consult
Licensee on matters of all Office Actions issued by the Patent Office and agrees
to consider the incorporation into the final version of such documents any
reasonable change(s) and/or claim(s) requested by Licensee thereof. In any event
Northwestern shall not cancel any claims related to the subject matter of
Licensed Products or Licensed Processes, without the consent of Licensee.
         8.4 Northwestern shall seek Patent Rights in all countries as listed in
Exhibit A. If Licensee should desire to seek patent protection in countries not
listed in Exhibit A, Licensee shall notify Northwestern in writing and shall be
responsible for any associated costs, except Licensee shall only be responsible
for its pro rata share of such associated costs, if other licensees of Patent
Rights also desire patent protection in such country, and shall reimburse
Northwestern for such costs or its pro rata share, as applicable. If
Northwestern wishes to discontinue prosecuting or maintaining an application or
patent in a given country, Licensee shall have the option of assuming
responsibility for such prosecution or maintenance in Northwestern's name,
wherein, Licensee shall be responsible for all associated costs, and shall
reimburse Northwestern for such costs, except Licensee shall only be responsible
for its pro rata share of such associated costs if other licensees of Patent
Rights also desire patent protection in such country.

                            ARTICLE IX - INFRINGEMENT
         9.1 Licensee shall inform Northwestern promptly in writing of any
alleged infringement of the Patent Rights by a third party and of any available
evidence thereof.
         9.2 During the terms of this Agreement, Northwestern shall have the
right, but shall not be obligated, to prosecute at its own expense all
infringements of the Patent Rights and, in furtherance of such right, Licensee
hereby agrees that Northwestern may include Licensee as a party plaintiff in
such suit, without expense to Licensee. Prior to commencing an infringement
action, Northwestern shall give consideration to the views of Licensee in
connection with the action, including the selection of counsel. Northwestern
shall continue to inform Licensee of all contemplated strategies, including
settlement, consent judgment or other voluntary final disposition of the suit,
and shall carefully consider Licensee's views thereon. The total cost of any
such infringement action commenced or defended solely by Northwestern shall be
borne by Northwestern and Northwestern shall keep any recovery or damages for
past infringement derived therefrom.
         9.3 If within six (6) months after having been notified of any alleged
infringement, Northwestern shall not have brought and shall not be diligently
prosecuting an infringement action, or if Northwestern shall notify Licensee at
any time prior thereto of its intention not to bring suit against any alleged
infringer, then, and in those events only, Licensee shall have the right, but
shall not be obligated, to prosecute at its own expense any infringement of the
Patent Rights, and Licensee may, for such purposes, use the name of Northwestern
as party plaintiff; provided, however, that such right to bring such
infringement action shall remain in effect only for so long as the license
granted herein remains exclusive. No settlement, consent judgment or other
voluntary final

                                       9

<PAGE>

disposition of the suit may be entered into without the consent of Northwestern,
which consent shall not unreasonably be withheld. Licensee shall indemnify
Northwestern against any order for costs that may be made against Northwestern
in such proceedings. Licensee shall keep any recovery or damages for past
infringement derived therefrom; provided, however, that such recovery, less any
and all expenses or costs incurred by Licensee, including, but not limited to,
reasonable attorneys' fees, shall be treated as Net Sales for the purpose of
calculating running royalties under Paragraph 5.4.
         9.4 In the event that a declaratory judgment action alleging invalidity
or noninfringement of any of the Patent Rights shall be brought against
Licensee, Northwestern, at its option, shall have the right, within thirty (30)
days after it receives notice of the commencement of such action, to intervene
and take over the sole defense of the action at its own expense.
         9.5 In any infringement suit that either Party may institute to enforce
the Patent Rights pursuant to this Agreement, the other party hereto shall, at
the request and expense of the Party initiating such suit, cooperate in all
respects and, to the extent possible, have its employees testify when requested
and make available relevant records, papers, information, samples, specimens,
and the like.
         9.6 Licensee, during the term of this Agreement, shall have the sole
right in accordance with the terms and conditions herein to sublicense any
alleged infringer for future use of the Patent Rights. Any sublicensing
royalties/fees received by Licensee shall be treated pursuant to Paragraph 5.5.

                          ARTICLE X - PRODUCT LIABILITY
         10.1 Licensee shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold Northwestern, its trustees, directors,
officers, employees and Affiliates, harmless against all claims, proceedings,
demands and liabilities or any kind whatsoever, including legal expenses and
reasonable attorneys' fees arising out of the death of or injury to any person
or persons or out of any damage to property, or resulting from the production,
manufacture, sale, use, lease, consumption or advertisement of the Licensed
Product(s) or arising from any obligation of Licensee hereunder.
         10.2 Licensee shall obtain and carry in full force and effect
commercial, general liability insurance which shall protect Licensee and
Northwestern with respect to events covered by paragraph 10.1 above. Such
insurance shall be written by a reputable insurance company authorized to do
business in the State of Illinois, shall list Northwestern as an additional
named insured thereunder, shall be endorsed to include product liability
coverage and shall require thirty (30) days written notice to be given to
Northwestern prior to any cancellation or material change thereof. The limits of
such insurance shall not be less than Five Million Dollars ($5,000,000) per
occurrence with an aggregate of Five Million Dollars ($5,000,000) for personal
injury or death; provided, however, upon the approval of an IND for a Licensed
Product, Licensee shall maintain insurance of not less than an aggregate of Ten
Million Dollars ($10,000,000) for personal injury or death, and upon the First
Commercial Sale of a Licensed Product maintain insurance of not less than an
aggregate of Fifteen Million Dollars ($15,000,000) for personal injury or death.
In addition, Licensee shall maintain insurance of not less than One Million
Dollars ($1,000,000) per occurrence with an aggregate of Three Million

                                       10

<PAGE>

Dollars ($3,000,000) for property damage. Licensee shall provide Northwestern
with Certificates of Insurance evidencing the same.
         10.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
NORTHWESTERN, ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES MAKE
NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, VALIDITY OF PATENT RIGHT OF CLAIMS, ISSUED OR PENDING AND
THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTHING IN
THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY
NORTHWESTERN THAT THE PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER
SHALL NOT INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY. IN NO EVENT SHALL
NORTHWESTERN, ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE
LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC
DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER
NORTHWESTERN SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL
KNOW OF THE POSSIBILITY.
         10.4 To Northwestern's best knowledge Northwestern represents that: (i)
Northwestern is the sole and exclusive owner of all right, title and interest in
and to the Patent Rights; (ii) Northwestern has the right to grant the rights
and licenses granted herein; (iii) the Patent Rights are free and clear of any
lien, encumbrance, security interest or restriction on license; (iv)
Northwestern has not previously granted, and will not grant during the term of
this Agreement, any right, license or interest in or to the Patent Rights, or
any portion thereof, inconsistent with the license granted to Licensee herein;
(v) there are no threatened or pending actions, suits, investigations, claims or
proceedings in any way relating to the Patent Rights, except for the routine
prosecution of pending patent applications relating to the Patent Rights.

                        ARTICLE XI - TERM AND TERMINATION
         11.1 This Agreement shall become effective on the Effective Date.
Unless sooner terminated as provided for below, this Agreement shall continue in
effect, on a Licensed Product-by-Licensed Product and country-by-country basis,
until the expiration of the last to expire patent for so long as there is an
issued Valid Claim in such country covering such Licensed Product.
         11.2 Licensee shall have a unilateral right to terminate this Agreement
and/or any licenses in any country by giving Northwestern sixty (60) days
written notice to that effect.
         11.3 Northwestern shall have the right to terminate or render this
license non-exclusive at any time if Northwestern determines that Licensee; (a)
has not adhered to the milestones and/or benchmarks of the commercial
development plan submitted by Licensee, and the Licensee cannot otherwise
demonstrate to Northwestern's satisfaction that Licensee has taken, or can be
expected to take within reasonable time, effective steps to achieve such
milestones and/or benchmarks, or (b) is not keeping Licensed Products

                                       11

<PAGE>

reasonably available to the public after commercial use commences. In making
this determination, Northwestern will take into account the normal course of
such commercial development programs conducted with sound and reasonable
business practices and judgment and annual reports submitted by Licensee. Prior
to invoking this right, Northwestern shall give written notice to Licensee
providing Licensee specific notice of, and a sixty (60) day opportunity to
respond to, Northwestern's concerns as to the previous items a) and/or b). If
Licensee has not cured such breach within sixty (60) days after receipt of such
notice from Northwestern, Northwestern will be entitled, in addition to any
other rights it may have under this Agreement, to terminate this Agreement
effective immediately; provided, however, if Licensee receives notification from
Northwestern of a material breach and if Licensee notifies Northwestern in
writing within sixty (60) days of receipt of such default notice that it
disputes the asserted default, the matter will be submitted to arbitration as
provided in Article XIII of this Agreement. For disputes involving Article IV,
Northwestern shall not have the right to terminate this Agreement until it has
been determined in such arbitration proceeding that Licensee materially breached
this Agreement, and the Licensee fails to cure such breach within ninety (90)
days after the conclusion of such arbitration proceeding.
         11.4 The provisions of Article III (Confidentiality), Article VI
(Payments, Reports and Records), Article X (Product Liability), Article XII
(Assignment), Article XIII (Dispute Resolution) and Article XIV (Notices and
Payments) shall survive termination or expiration of this Agreement in
accordance with their terms.
         11.5 If (1) either Party breaches any material obligation imposed by
this Agreement; (2) either Party makes any general assignment for the benefit of
its creditors; (3) a petition is filed by or against either Party, or any
proceeding is initiated against either Party as a debtor, under any bankruptcy
or insolvency law, unless the laws then in effect void the effectiveness of this
provision; or (4) a receiver, trustee, or any similar office is appointed to
take possession, custody, or control of all or any part of either Party's assets
or property, then the other Party may, at its option, send a written notice that
it intends to terminate the license granted by this Agreement.
         11.6 If the Party in breach does not cure the breach, negate the
assignment, obtain a dismissal of the proceeding, or have the appointment
vacated and regaining its assets within ninety (90) days from the notice date,
then the other Party shall have the right to terminate the license granted
immediately upon the date of mailing of a written notice of termination to the
Party in breach.
         11.7 Upon termination of this Agreement for any cause, nothing herein
shall be construed to release either Party of any obligation that has matured
prior to the effective date of such termination. Licensee may, after the date of
such termination, sell all Licensed Products that it may have on hand at the
date of termination, provided that it pays the earned royalty thereon as
provided in this Agreement.
         11.8 In the event of termination for breach by Licensee, Licensee
agrees to no longer use any of the Patent Rights under which it has been granted
a license.
         11.9 Upon termination of this Agreement for any reason, Licensee shall
assign to Northwestern any and all existing sublicense agreements of any of the
Patent Rights hereunder, provided the financial obligations of each sublicensee
to Northwestern shall be limited to the amounts Licensee shall be obligated to
pay Northwestern for the activities of such sublicensee pursuant to this
Agreement. Northwestern agrees to keep

                                       12

<PAGE>

such assigned sublicenses in force to the extent that Northwestern is capable of
performing as Northwestern in place of Licensee. If any sublicense agreement
cannot be assigned to Northwestern, such sublicense agreement shall terminate
immediately, and such sublicensee shall be allowed to sell all Licensed Products
that it may have on hand at the date of termination, provided that it pays the
earned royalty thereon as provided in this Agreement, and Licensee agrees that
such sublicense agreements of the Patent Rights shall provide that upon the
termination of the sublicense agreement the sublicensee's rights to the Patent
Rights shall terminate under such sublicense agreement. Furthermore,
Northwestern agrees that Licensee shall be not held liable for any infringement
of any of the Patent Rights by such sublicensee after termination of the
sublicense agreement where the alleged infringing act(s) took place after
termination of the sublicense agreement.

                            ARTICLE XII - ASSIGNMENT
         This Agreement shall not be assignable by either Party without the
prior written consent of the other, except that any Party may assign this
Agreement to any Affiliate, to a successor in interest (including the surviving
company in any consolidation or merger), or to an assignee of substantially all
the business and assets of such Party, or with respect to Licensee, to an
assignee of all or substantially all of the business to which this Agreement
relates.

                        ARTICLE XIII - DISPUTE RESOLUTION
         13.1 The Parties agree to effect all reasonable efforts to resolve any
and all disputes between them in connection with this Agreement in an amicable
manner.
         13.2 The Parties agree that any dispute that arises in connection with
this Agreement and which cannot be amicably resolved by the parties shall be
resolved by binding Alternative Dispute Resolution (ADR) in the manner set forth
in Paragraph 13.3 though Paragraph 13.5.
         13.3 If a Party intends to begin ADR to resolve a dispute, such Party
shall provide written notice to the other Party informing the other Party of
such intention and the issues to be resolved. Within ten (10) business days
after its receipt of such notice, the other Party may, by written notice to the
Party initiating ADR, add additional issues to be resolved. If the Parties
cannot agree upon the selection of a neutral person within twenty (20) business
days following receipt of the original ADR notice, a neutral person shall be
selected by the then President of the Center for Public Resources (CPR), 680
Fifth Avenue, New York, New York 10019. The neutral person shall be a single
individual having experience in the biotechnology and/or pharmaceutical industry
who shall preside in resolution of any disputes between the Parties. The neutral
person selected shall not be an employee, director or shareholder of either
Party or an Affiliate or sublicensee.
         13.4 Each Party shall have ten (10) business days from the date the
neutral person is selected to object in good faith to the selection of that
person. If either Party makes such an objection, the then President of the CPR
shall, as soon as possible thereafter, select another neutral person under the
same conditions as set forth above. This second selection shall be final.

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<PAGE>

13.5     The ADR shall be conducted in the following manner:
               (a)  No later than forty-five (45) business days after selection,
                    the neutral person shall hold a hearing to resolve each of
                    the issues identified by the Parties.
               (b)  At least five (5) days prior to the hearing, each Party must
                    submit to the neutral person and serve on the other Party a
                    proposed ruling on each issue to be resolved. Such proposed
                    ruling shall contain no argument on or analysis of the facts
                    or issues, and shall be limited to not more than fifty (50)
                    pages.
               (c)  The neutral person shall not require or permit any discovery
                    by any means, including depositions, interrogatories or
                    production of documents.
               (d)  Each Party shall be entitled to no more than eight (8) hours
                    of hearing to present testimony or documentary evidence to
                    the neutral person. The testimony of both Parties shall be
                    presented during consecutive calendar days. Such time
                    limitation shall apply to any direct, cross or rebuttal
                    testimony, but such time limitation shall only be charged
                    against the Party conducting such direct, cross or rebuttal
                    testimony. It shall be the responsibility of the neutral
                    person to determine whether the parties have had the eight
                    (8) hours to which each is entitled.
               (e)  Each Party shall have the right to be represented by
                    counsel. The neutral person shall have the sole discretion
                    with regard to the admissibility of any evidence.
               (f)  The neutral person shall rule on each disputed issue within
                    thirty (30) days following the completion of the testimony
                    of both Parties. Such ruling shall adopt in its entirety the
                    proposed ruling of one of the Parties on each disputed
                    issue.
               (g)  ADR shall take place in Chicago, Illinois. All costs
                    incurred for a hearing room shall be shared equally between
                    the Parties.
               (h)  The neutral person shall be paid a reasonable fee plus
                    expenses, which fees and expenses shall be shared equally by
                    the Parties.
               (i)  The ruling shall be binding on the Parties and may be
                    entered as an enforceable judgment by a state or federal
                    court having jurisdiction of the Parties.
        13.6  This section XIII shall survive any termination of this Agreement.

                       ARTICLE XIV - NOTICES AND PAYMENTS
         Any payment, notice or other communication pursuant to this Agreement
shall be sufficiently made or given on the date of mailing if sent to such Party
by certified first class mail, postage prepaid, addressed to it at its address
below or as it shall designate by written notice given to the other Party:

In the case of Northwestern:         Executive Director
                                     Technology Transfer Program
                                     Northwestern University

                                       14

<PAGE>

                                     1880 Oak Avenue, Suite 100
                                     Evanston, Illinois 60201

In the case of Licensee:             Attn:  President
                                     GenVec, Inc.
                                     65 West Watkins Mill Road
                                     Gaithersburg, MD 20878-4021
         With a copy to              Attn: Senior Vice President, Corporate
                                     Development

                              ARTICLE XV - GENERAL
         15.1 FORCE MAJEURE. Neither party shall be liable to the other for its
failure to perform any of its obligations under this Agreement, except for
payment obligations, during any period in which such performance is delayed
because rendered impracticable or impossible due to circumstances beyond its
reasonable control, including without limitation earthquakes, governmental
regulation, fire, flood, labor difficulties, interruption of supply of key raw
materials, civil disorder, and acts of God, provided that the Party experiencing
the delay promptly notifies the other Party of the delay.
         15.2 SEVERABILITY. In the event any provision of this Agreement is held
to be invalid or unenforceable, the valid or enforceable portion thereof and the
remaining provisions of this Agreement will remain in full force and effect.
         15.3 APPLICABLE LAW.  This Agreement is made in accordance with and
shall be governed and construed under the laws of the State of Illinois,
excluding its choice of law rules.
         15.4 ENTIRE AGREEMENT. This Agreement and the exhibits attached hereto
constitute the entire, final, complete and exclusive agreement between the
Parties and supersede all previous agreements or representations, written or
oral, with respect to the subject matter of this Agreement. This Agreement may
not be modified or amended except in writing signed by a duly authorized
representative of each party.
         15.5 HEADINGS. The headings for each article and section in this
Agreement have been inserted for convenience or reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.
         15.6 INDEPENDENT CONTRACTORS. The Parties are not employees or legal
representatives of the other party for any purpose. Neither Party shall have the
authority to enter into any contracts in the name of or on behalf of the other
Party.
         15.7 ADVERTISING. Licensee shall not use the name of the inventors for
Patent Rights, nor the name of Northwestern in any advertising, promotional or
sales literature, without prior written consent obtained from Northwestern in
each case; provided, however, Licensee, at its discretion, may make a mutually
agreed upon press release regarding the Agreement promptly following the
Effective Date of the Agreement. Once a particular press release has been
approved for disclosure by Northwestern, Licensee may make disclosures which do
not differ materially therefrom without any need for further consent by
Northwestern.
         15.8 WAIVER. Any waiver (express or implied) by either Party of any
breach of this Agreement shall not constitute a waiver of any other or
subsequent breach.

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<PAGE>

         15.9 COUNTERPARTS. This Agreement may be executed in counterparts with
the same force and effect as if each of the signatories had executed the same
instrument.
         15.10 PATENT MARKING. Licensee agrees to mark the Licensed Products
sold in the United States with all applicable United States patent numbers. All
Licensed Products shipped to or sold in other countries shall be marked in such
a manner as to conform with the patent laws and practice of the country of
manufacture or sale.

         IN WITNESS WHEREOF, the Parties have executed this Agreement effective
on the date first set forth above.

LICENSEE                                NORTHWESTERN

By:________________________             By:_________________________________
   Name: Thomas E. Smart                   Name: Lydia Villa-Komaroff, Ph.D
   Title: Sr. Vice President,              Title: Vice President for Research
    Corporate Development

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                                    EXHIBIT A

*

            NATIONAL PHASE FILINGS IN THE FOLLOWING COUNTRIES:
                           Canada
                           Japan
                           Australia
                           EPO countries designated as follows:
                                    Austria
                                    Belgium
                                    Switzerland/Liechtenstein
                                    Germany
                                    Denmark
                                    Spain
                                    Finland
                                    France
                                    United Kingdom
                                    Greece
                                    Ireland
                                    Italy
                                    Luxembourg
                                    Monaco
                                    Netherlands
                                    Portugal
                                    Sweden

                                       17

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