Amendment No. 1 Research, Development And Collaboration Agreement

EXHIBIT 10.5.1


AMENDMENT NO. 1 RESEARCH, DEVELOPMENT AND COLLABORATION AGREEMENT


This Amendment No. 1 to Research, Development and Collaboration Agreement (the "Amendment No. 1") effective as of January 1, 1999, is entered into by and between GenVec, Inc. ("GenVec") and Warner-Lambert Company ("Warner"), and amends that certain Research, Development and Collaboration Agreement entered into by Warner and GenVec effective as of July 21, 1997 (the "Agreement").


1. All capitalized terms not defined in this Amendment No. 1 shall have the meanings given to them in the Agreement.


2. The Agreement is hereby amended to revise Section 1.5 as follows:


1.5 "COLLABORATION PRODUCT" shall mean a Product Configuration for
which Development has commenced pursuant to this Agreement. On a
country-by-country basis, a Product Configuration which has commenced
sales shall continue to be a Collaboration Product unless Warner or its
Affiliates or Sublicensees discontinue sales of such Collaboration
Product in the applicable country and have no intent to resume such
sales.


3. The Agreement is hereby amended to revise Section 2.2.3(a) as follows:


2.2.3 ASIAN COMPANY.


(a) GenVec may enter into an agreement(s) with one or more companies for the research, development and/or commercialization of one or more Product Configurations in Japan or other countries outside the Territory and the Co-Promotion Countries, any such company (an "Asian Partner" and collectively, the "Asian Partners") shall have the right to obtain access to and the right to use the Data Package for the purpose of seeking Regulatory Approval for any Product Configurations for any indication to which the Asian Partner has commercialization rights in Japan and/or any other country, subject to Section 15.2. Notwithstanding the foregoing, Warner shall only be obligated to provide each component of the Data Package a single time and GenVec shall designate which of GenVec or the Asian Partners shall be the party to whom Warner shall provide the Data Package components; provided, however, that the party receiving the Data Package may provide the Data Package to GenVec and one or more other Asian Partners, and GenVec (or its Asian Partner designee) shall reasonably seek to minimize the number and frequency of requests for the components of the Data Package. In exchange for receiving such access and rights, the Asian Partner(s) must agree to pay to Warner amounts to be agreed by Warner and the Asian Partner(s), which shall not, in the aggregate, exceed one-fourth of all costs incurred in connection with those aspects of the Research Program or the Development in which data contained in the Data Package was generated or obtained. In addition to the payment to Warner described above, each Asian Partner shall be obligated to pay all expenses it incurs in conducting research and development activities with respect to any Product Configuration specifically and solely for obtaining Regulatory Approvals in Japan and/or any other country for which it has commercialization rights.


4. The Agreement is hereby amended to revise Section 1.27 by amending the formula therein to read as follows:
Average percentage
discount on a = (1-A/B) x 100
particular "bundle"


5. The Agreement is hereby amended by adding the following clause to the beginning of the first sentence of Section 4.5.1: "Subject to the terms of Section 6.3.5, and . . ."


6. The Agreement is hereby amended to add the following to the end of Section 6.1:


On or before March 20, 1999, Warner shall pay to GenVec the amount of
three million seven hundred fifty thousand dollars ($3,750,000).


7. The Agreement is hereby amended to revise Section 6.3 by the addition
of new Section 6.3.5:


6.3.5 REIMBURSEMENT. On or before March 20, 1999, Warner shall pay to
GenVec one million two hundred fifty thousand dollars ($1,250,000) as
reimbursement of certain Development Costs described on Exhibit A
hereto incurred by GenVec in the period July 1, 1997 through December
31, 1998 with respect to Collaboration Products. No further Development
Costs shall be owed to GenVec by Warner for the period July 1, 1997
through December 31, 1998. Each year the Executive Committee shall
approve a twelve (12) month budget for all Development Costs
anticipated to be incurred by GenVec and reimbursed by Warner (the
"Budget"). The Executive Committee shall review such Budget every six
(6) months. Except as specifically approved in the Budget, after
December 31, 1998, GenVec shall not receive funding for any Development
Costs in excess of the funds paid by Warner pursuant to Sections 6.3 or
11.7, without the prior written consent of the Executive Committee or a
Warner designee and only such pre-approved Development Costs shall be
reimbursed to GenVec by Warner. For any of the above approved
Development Costs in excess of the funds paid by Warner pursuant to
Sections 6.3 or 11.7, GenVec shall be reimbursed by Warner for
Development Costs, if any, incurred by GenVec up to a maximum of 110%
of the approved amount. GenVec shall further not expend any of the
funds received by it under Sections 6.3.1, 6.3.2 and 11.7 for
Development Costs except pursuant to the Budget. In the event that
GenVec believes that additional Development funding in excess of 110%
of that approved by the Executive Committee is required or desirable
for the conduct of activities to be conducted by GenVec in connection
with the Development, it may notify the Executive Committee; provided,
Warner shall have no obligation to reimburse GenVec for any such excess
without the prior written approval of the Executive Committee or a
Warner designee.


8. Section 6.4.1 of the Agreement is hereby revised to restate the third and fourth milestone payments due to GenVec for the "Filing of a PLA" with respect to Collaboration Products for the first occurrence for each of CAD and PVD as follows:


-2-


*
*


All other milestones set forth in Section 6.4.1 shall remain unchanged.


9. Section 6.5.1 of the Agreement is hereby revised to replace the following :


"Annual Net Sales up to *
Annual Net Sales over *


with the following new description of royalties:


"Annual Net Sales up to *
Annual Net Sales over *
and less than or equal *
Annual Net Sales above *


10. Section 6.5.4 of the Agreement is hereby amended to replace the words "*" with the words "*".


11. The Agreement is hereby amended to revise Section 6.6.2 to provide in its entirety as follows:


Except as expressly provided in Sections 6.6.1 or 6.6.3, Warner shall
be responsible for the payment of all royalties, license fees and
milestone and other payments due from GenVec or Warner to any Third
Party(ies) under licenses or similar agreements (including license or
similar agreement entered into by GenVec only if approved by the
Executive Committee) for the manufacture, use, import, or sale of
Collaboration Products in the Territory; provided, if the Executive
Committee fails to approve a particular license or other agreement(s)
with a Third Party, Warner shall have no rights to any intellectual
property or other subject matter within the scope of such agreements,
and GenVec shall have no liability under this Agreement for not
providing such rights to Warner.


12. The Agreement is hereby amended to revise Section 6.6.3 to provide in its entirety as follows:


6.6.3 SHARED RESPONSIBILITIES. Subject to Section 6.5.4, in the event
that (y) the aggregate amount paid or otherwise due or owing by Warner
for royalties with respect to a particular Collaboration Product (i) to
GenVec for royalties pursuant to Section 6.5.1, and (ii) for royalty
payments to Third Parties pursuant to Section 6.6.2, and (z) the Cost
of Manufacture of such Collaboration Product, in the aggregate, exceed
thirty percent (30%) of the Net Sales of such Collaboration Product,
then Warner and GenVec shall equally share the portion of the aggregate
of the payments for (y) and (z) by Warner which are in excess of thirty
percent (30%) of Net Sales of the applicable Collaboration Product, to
the extent such payments in excess of thirty percent (30%) of Net Sales
are attributable to (y) (ii) above. It is understood and agreed that
Warner shall be solely responsible for any such payment obligations for
(y) and (z) which in the aggregate are less than or eq ...