Exhibit 10.2

*** Text Omitted and Filed Separately

Pursuant to a Confidential Treatment Request

under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)

EX-U.S. LICENSE AGREEMENT

THIS EX-U.S. LICENSE AGREEMENT (the “Agreement”) is entered into as of the
Effective Date (as defined below) by and between VICAL INCORPORATED, a Delaware
corporation (“Vical”), having an address of 10390 Pacific Center Court, San
Diego, California, 92121, USA, and ASTELLAS PHARMA INC., a company organized
under the laws of Japan (“Astellas”), having an address of 3-11,
Nihonbashi-Honcho 2-chome, Chuo-Ku, Tokyo 103-8411, Japan.

RECITALS

WHEREAS, Vical has developed expertise and owns proprietary rights related to
Compounds and Products in the Field (each as defined below), as more fully
described below;

WHEREAS, Astellas is engaged in the research, development and commercialization
of pharmaceutical products; and

WHEREAS, Astellas wishes to obtain, and Vical is willing to grant to Astellas,
an exclusive license under Vical Technology (as defined below) to develop and
commercialize Products in the Field in the Territory (as defined below), subject
to the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

 

1. DEFINITIONS

1.1 “Affiliate” shall mean, with respect to a particular party, a person,
corporation, partnership, or other entity that controls, is controlled by or is
under common control with such party. For the purposes of this definition, the
word “control” (including, with correlative meaning, the terms “controlled by”
or “under the common control with”) means the actual power, either directly or
indirectly through one or more intermediaries, to direct or cause the direction
of the management and policies of such entity, whether by the ownership of more
than fifty percent (50%) of the voting stock of such entity, or by contract or
otherwise.

1.2 “Astellas Indemnitee” shall have the meaning provided in Section 11.1.

1.3 “Astellas Reserved Product” shall have the meaning provided in
Section 3.5(b).

1.4 “Calendar Quarter” shall mean each respective period of three consecutive
months ending on March 31, June 30, September 30 and December 31.

 

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1.5 “Calendar Year” shall mean each respective period of twelve (12) consecutive
months beginning on January 1.

1.6 “CMC” shall mean chemistry, manufacturing and controls.

1.7 “CMV” shall mean cytomegalovirus.

1.8 “Combination Product” shall mean any pharmaceutical product that contains
one or more Compound(s) in combination with one or more other therapeutically
and/or prophylactically active ingredient(s), whether packaged together or
included in a prime-boost regimen or in the same therapeutic formulation,
including, in each case, all formulations, line extensions and modes of
administration, but excluding, in each case, any formulation with the Vaxfectin
Adjuvant. For clarification, poloxamers, other delivery systems and adjuvants
shall not be considered therapeutically and/or prophylactically active
ingredients.

1.9 “Commercialization Plan” shall have the meaning provided in Section 4.2.

1.10 “Commercially Reasonable Efforts” shall mean that level of efforts and
resources consistent with commercially reasonable practices of a company in the
pharmaceutical industry with respect to the research, development or
commercialization of a pharmaceutical product at a similar stage of research,
development or commercialization, taking into account relevant factors
including, without limitation, measures of patent coverage, relative safety and
efficacy, product profile, the competitiveness of the marketplace, the
proprietary position of such product, the regulatory structure involved, the
market potential of such product and other relevant factors, including
comparative technical, legal, scientific and/or medical factors, all as measured
by the facts and circumstances in effect at the time when the carrying out of
such obligations is due.

1.11 “Committees” shall mean the JDC and JSC, collectively, and “Committee”
shall mean the JDC or JSC, as applicable.

1.12 “Competitive Product” shall have the meaning provided in Section 3.4.

1.13 “Compound” shall mean […***…] plasmid that encodes […***…] of glycoprotein
B and/or phosphoprotein 65 […***…].

1.14 “Confidential Information” shall mean all Information and other proprietary
scientific, marketing, financial or commercial information or data, which one
party or any of its Affiliates has furnished or otherwise made available to the
other party or its Affiliates, whether made available orally, in writing, or in
electronic form. Confidential Information shall include all such information
provided or made available pursuant to the Confidentiality Agreement. All Vical
Technology shall be Confidential Information of Vical. All Confidential
Information shall be subject to the Article 9.

1.15 “Confidentiality Agreement” shall mean that certain Confidentiality
Agreement […***…].

 

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1.16 “Control” shall mean, with respect to any Information, Patent or other
intellectual property right, possession by a party of the ability (whether by
ownership, license or otherwise, but without taking into account any rights
granted by one party to the other party under the terms of this Agreement) to
grant access, a right to use, a license or a sublicense (as applicable) to such
Information, Patent or other intellectual property right without violating the
terms of any agreement or other arrangement with any Third Party.

1.17 “CytRx” shall mean CytRx Corporation, a Delaware corporation located at 154
Technology Parkway, Technology Park/Atlanta, Norcross, GA 30092, USA.

1.18 “CytRx Agreement” shall mean that certain License Agreement, dated
December 7, 2001, by and between Vical and CytRx, and any amendments made in
accordance with its terms. A copy of the CytRx Agreement has been provided to
Astellas under separate cover.

1.19 “Development Plan” shall mean the annual plan for preclinical and clinical
development of Products in the Field, including the budget for such activities
to be performed by Vical, and any amendment or modification to such plan, which
plan (other than such plan agreed as of the Effective Date) is drafted by the
JDC and approved by the JSC.

1.20 “Effective Date” shall have the meaning provided in Section 12.15.

1.21 “EMA” shall mean the European Medicines Agency or any successor agency
thereto having the administrative authority to regulate the marketing of human
pharmaceutical products or biological therapeutic products in the European
Union.

1.22 “Excluded Claim” shall have the meaning provided in Section 12.3(c)(vi).

1.23 “Excluded Product” shall have the meaning provided in Section 3.5(a).

1.24 “Executives” shall have the meaning provided in Section 2.1(d).

1.25 “Field” shall mean all therapeutic and prophylactic use to control or
prevent CMV infection in (a) Immunocompromised Patients, including HSCT
Recipients and SOT Recipients, and (b) human transplant donors, but excluding,
in each case, any therapeutic or prophylactic use to control or prevent CMV
infection other than as expressly described in clauses (a) and (b).

1.26 “First Commercial Sale” shall mean, with respect to a Product, the first
sale for end use to a Third Party in a country in the Territory after the
applicable Regulatory Authority has granted Regulatory Approval in such country.

1.27 “Generic Product” shall mean, on a country-by-country basis, a product that
is introduced in the applicable country in the Territory by an entity other than
Astellas or a Sublicensee or their respective Affiliates, which (i) contains the
same or equivalent (by EMA or other applicable Regulatory Authority standards,
on a country-by-country basis) therapeutically and/or prophylactically active
ingredient(s) in the same dosage form, route of administration, and

 

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strength or concentration as a Product sold by Astellas or a Sublicensee or
their respective Affiliates in such country, (ii) has been granted Regulatory
Approval by an abridged procedure pursuant to and in accordance with Article 10
of Directive 2001/83/EC (or equivalent legislation in the Territory) in reliance
in whole or in part on the prior Regulatory Approval of a Product or the safety
and efficacy data generated for the prior Regulatory Approval for such Product,
or (iii) has been granted regulatory approval by a procedure pursuant to and in
accordance with Article 10a of Directive 2001/83/EC (or equivalent legislation
in the Territory).

1.28 “HSCT” shall mean transplantation of hematopoietic stem cells, including
peripheral blood stem cells, cord blood stem cells and bone marrow.

1.29 “HSCT Recipient” shall mean a human recipient in a HSCT.

1.30 “HSR Act” shall have the meaning provided in Section 12.15.

1.31 “HSR Filing Date” shall have the meaning provided in Section 12.15.

1.32 “ICC” shall have the meaning set forth in Section 12.3(c)(i).

1.33 “ICC Rules” shall have the meaning set forth in Section 12.3(c)(i).

1.34 “IFRS” shall mean the International Financial Reporting Standards.

1.35 “Immunocompromised Patients” shall mean human patients whose immune system
is not functioning normally because of an immunodeficiency disorder or other
disease, or as the result of the administration of immunosuppressive drugs or
other drugs that may indirectly cause a reduction of the immune system function.
For the avoidance of doubt, elderly patients and pregnant women shall not be
deemed Immunocompromised Patients solely because such patients are elderly or
pregnant, respectively.

1.36 “Information” shall mean all tangible and intangible (a) techniques,
technology, practices, trade secrets, inventions (whether patentable or not),
methods, protocols, processes, knowledge, know-how, skill, experience,
information, data and results (including pharmacological, toxicological,
clinical, analytical and quality control data and results), regulatory filings,
marketing reports, software and algorithms and (b) compositions of matter,
cells, cell lines, assays, animal models and physical, biological or chemical
material.

1.37 “[…***…]” shall have the meaning set forth in Section […***…].

1.38 “JDC” shall have the meaning set forth in Section 2.2.

1.39 “JSC” shall have the meaning set forth in Section 2.1.

1.40 “Losses” shall have the meaning provided in Section 11.1.

1.41 “MAA” shall mean a marketing authorization application or equivalent
application, and all amendments and supplements thereto, filed with the
applicable Regulatory

 

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Authority in a country or jurisdiction in the Territory (including any
supra-national agency such as the EMA in the European Union).

1.42 “Major Markets” shall mean […***…], and “Major Market” shall mean any of
the foregoing.

1.43 “[…***…]” shall have the meaning set forth in Section […***…].

1.44 “Manufacturing Coordinators” shall have the meaning set forth in
Section 2.7.

1.45 “Manufacturing Plan” shall mean (a) the annual plan for (i) CMC activities
(including, without limitation, formulation, analytical and process development,
and scale-up, stability, packaging and shipping studies) with respect to
Compound and Products in the Field and (ii) the manufacture of Compound and
Products in the Field and (b) any amendment or modification to such plan, which
plan (other than such plan agreed as of the Effective Date) is drafted by the
Manufacturing Coordinators and approved by the JSC during the term of the
Services Agreement.

1.46 “Net Sales” shall mean the gross amounts invoiced by Astellas and/or its
Sublicensees for sales or other dispositions of Products to Third Parties in the
Territory, less the following items, as allocable to such Products (if not
previously deducted from the amount invoiced): (a) trade, quantity and cash
discounts, credits or allowances; (b) credits or allowances additionally granted
upon returns, rejections or recalls or for retroactive price reductions and
billing errors; (c) rebates, discounts and chargeback payments in any form
granted to managed health care organizations, pharmacy benefit managers (or
equivalents thereof), national, state/provincial, local, and other governments,
their agencies and purchasers and payers/reimbursers, or to trade customers;
(d) freight, shipping and insurance charges directly related to the distribution
of Products; and (e) taxes, duties or other governmental tariffs (other than
income taxes). Net Sales (including Net Sales for the Combination Product) will
be calculated on a country-by-country basis.

Upon any sale or other disposition of any Product for any consideration other
than exclusively monetary consideration on bona fide arm’s-length terms, for
purposes of calculating Net Sales under this Agreement, such Product shall be
deemed to be sold exclusively for money at the average sales price during the
applicable reporting period generally achieved for such Product in the country
in which such sale or other disposition occurred when such Product is sold alone
and not as part of a Combination Product.

In no event will any particular amount, identified above, be deducted more than
once in calculating Net Sales. Sales of a Product between Astellas or its
Sublicensees and their Subdistributors exclusively for monetary consideration on
bona fide arm’s length terms at fair market value shall be included in the
computation of Net Sales, and for clarity the subsequent resale by a
Subdistributor of such Product to a Third Party shall be excluded from the
computation of Net Sales. Sales of a Product between Astellas and its
Sublicensees (which are not Subdistributors) for resale shall be excluded from
the computation of Net Sales, but the subsequent resale of such Product to a
Third Party shall be included within the computation of

 

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Net Sales. Any free-of-charge disposal or use of a Product for development,
regulatory or marketing purposes, such as clinical trials, compassionate use or
indigent patient programs, shall not be deemed a sale or disposition for
purposes of calculating Net Sales.

In the case of a Combination Product, Net Sales for such Combination Product
shall be calculated by multiplying actual Net Sales of such Combination Product
by the fraction A/(A+B) where A is the invoice price of the Product that
contains one or more Compound(s) as the sole active ingredient(s), if sold
separately, and B is the total invoice price of the other active ingredient(s)
in the Combination Product, if sold separately. If, on a country-by-country
basis, the other active ingredient(s) in the Combination Product is not sold
separately in such country, Net Sales for the purpose of determining royalties
of the Combination Product shall be calculated by multiplying actual Net Sales
of such Combination Product by the fraction A/D, where A is the average invoice
price of the Product that contains one or more Compound(s) as the sole active
ingredient(s), if sold separately in such country, and D is the average invoice
price of the Combination Product in such country. If the Product that contains
one or more Compound(s) as the sole active ingredient(s) is not sold separately
in a given country, the parties shall determine Net Sales for such Combination
Product by mutual agreement based on the relative contribution of the Product
that contains one or more Compound(s) as the sole active ingredient(s) and the
other active ingredient(s) in the Combination Product.

Net Sales will be calculated in accordance with this definition and Astellas’
accounting policies generally consistent with IFRS on an accrual basis, as
consistently applied. To the extent any accrued amounts used in the calculation
of Net Sales are estimates, such estimates shall be trued-up in accordance with
Astellas’ accounting policies generally consistent with IFRS, as consistently
applied, and Net Sales and related payments under this Agreement shall be
reconciled as appropriate.

1.47 “Patent Term Extension” shall have the meaning provided in Section 7.3.

1.48 “Patents” shall mean (a) all patents, including design patents,
certificates of invention, applications for certificates of invention, priority
patent filings and patent applications, including provisional patent
applications and design patent applications, and (b) any renewal, divisional,
continuation, continuation-in-part, or request for continued examination of any
of such patents, certificates of invention and patent applications, and any and
all patents or certificates of invention issuing thereon, and any and all
reissues, reexaminations, extensions, certificates of correction, divisions,
renewals, substitutions, confirmations, registrations, revalidations, revisions,
and additions of or to any of the foregoing.

1.49 “Phase 3 Clinical Trial” shall mean a pivotal clinical trial of a Product
conducted in human patients in any country designed to ascertain efficacy and
safety of such Product for the purpose of submitting an application for
Regulatory Approval to the competent Regulatory Authority in the Territory.

1.50 “[…***…]” shall have the meaning set forth in Section […***…].

1.51 “Product” shall mean any pharmaceutical product that contains one or more
Compound(s), alone or as a Combination Product, including, in each case, all
formulations, line

 

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extensions and modes of administration, including any pharmaceutical product
containing any formulation of one or more Compound(s) with poloxamer CRL1005,
but excluding, in each case, any formulation with the Vaxfectin Adjuvant.

1.52 “Regulatory Approval” shall mean any and all approvals (including
individual and national price and reimbursement approvals, as applicable),
licenses, registrations, or authorizations of any country, federal,
supranational, state or local regulatory agency, department, bureau or other
governmental entity that are necessary to market and sell a Product in the Field
in any country or regulatory jurisdiction in the Territory.

1.53 “Regulatory Authority” shall mean any national, federal, supra-national,
regional, state or local regulatory agency, department, bureau, commission,
council or other governmental entity whose review and/or approval is necessary
for the manufacture, packaging, use, storage, import, export, distribution,
promotion, marketing, offer for sale and sale of a Product in the Field in a
country or regulatory jurisdiction in the Territory.

1.54 “Representatives” shall have the meaning provided in Section 12.1.

1.55 “Reserved Product” shall have the meaning provided in Section 3.5(b).

1.56 “Restricted Period” shall have the meaning provided in Section 3.5(c).

1.57 “Royalty Term” shall have the meaning provided in Section 5.3(b).

1.58 “Sale” shall have the meaning provided in Section 12.7(a).

1.59 “Services Agreement” shall mean that certain Supply and Services Agreement
of even date herewith by and between Vical and Astellas, as amended in
accordance with its terms.

1.60 “SOT” shall mean solid organ transplantation.

1.61 “SOT Recipient” shall mean a human recipient in a SOT.

1.62 “Standstill Period” shall have the meaning provided in Section 12.1.

1.63 “[…***…]” shall have the meaning set forth in Section […***…].

1.64 “Subdistributor” shall mean a Third Party appointed by Astellas or one of
its Sublicensees as a distributor of Product which Third Party purchases Product
in the Territory from Astellas or its Sublicensee and resells and distributes
(including registration, promotion and marketing) the Product in its respective
territory.

1.65 “Sublicense Agreement” shall have the meaning provided in Section 3.2.

1.66 “Sublicensee” shall mean a Third Party or Affiliate to whom Astellas has
granted a sublicense of the right to research, develop, make, have made, use,
sell, offer for sale, have sold or import a Product in the Field in the
Territory, beyond the mere right to purchase such Product.

 

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1.67 “Term” shall have the meaning provided in Section 10.1.

1.68 “Territory” shall mean the world, excluding the United States of America
and its territories and possessions, including Puerto Rico and the District of
Columbia.

1.69 “Third Party” shall mean any entity other than Vical or Astellas or an
Affiliate of Vical or Astellas.

1.70 “U.S. Agreement” shall mean that certain U.S. License Agreement of even
date herewith by and between Vical and Astellas, as amended in accordance with
its terms.

1.71 “Valid Claim” shall mean a claim of an issued patent or pending patent
application within the Vical Primary Patents that has not been revoked or held
unenforceable or invalid by a decision of a court or governmental agency of
competent jurisdiction from which no appeal can be taken, or with respect to
which an appeal is not taken within the time allowed for appeal, and that has
not been abandoned, disclaimed or admitted to be invalid or unenforceable
through reissue, disclaimer, or otherwise.

1.72 “Vaxfectin Adjuvant” shall mean Vical’s proprietary cationic lipid-based
system known as Vaxfectin® comprising
(±)-N-(3-aminopropyl)-N,N-dimethyl-2,3-bis(syn-9-tetradeceneyloxy)-1-propanaminium
bromide (GAP-DMORIE) or derivatives thereof and one or more co-lipid(s),
including 1,2-diphytanoyl-sn-glycero-3-phosphoethanolamine (DPyPE), which is
claimed or disclosed in a Patent Controlled by Vical.

1.73 “Vical Indemnitee” shall have the meaning provided in Section 11.2.

1.74 “Vical Know-How” shall mean Information not included in the Vical Patents
that Vical Controls on the Effective Date or during the Term, which Information
is necessary or useful for the development, registration, manufacture, use,
promotion, distribution, offer for sale, sale import or export of Compounds or
Products in the Field in the Territory, including any Information Controlled by
Vical regarding poloxamer CRL1005 under which Vical has an exclusive license
pursuant to the CytRx Agreement, and any replication or any part of any of the
foregoing. For clarification, in the case of a Combination Product, Vical
Know-How does not include any Information Controlled by Vical relating to any
therapeutically and/or prophylactically active ingredient in such Combination
Product other than a Compound.

1.75 “Vical Patents” shall mean all Patents that Vical Controls as of the
Effective Date or during the Term, which Patents claim the composition of matter
of, or any method of making or using, Compounds or Products in the Field in the
Territory, including the Vical Primary Patents. For clarification, in the case
of a Combination Product, Vical Patents do not include any Patents Controlled by
Vical, which Patents relate to any therapeutically and/or prophylactically
active ingredient in such Combination Product other than a Compound. The Vical
Patents as of the Effective Date are listed on EXHIBIT A.

1.76 “Vical Primary Patents” shall mean (a) […***…], and such other Vical
Patents as the parties agree to include in this subsection (a) pursuant to the
last sentence of this Section 1.76, (b) corresponding foreign

 

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Patents in the Territory, whether now existing or hereafter filed and (c) any
renewal, divisional, continuation, continuation-in-part, or request for
continued examination of any of such patents, including provisional patent
applications, and any and all patents or certificates of invention issuing
thereon, and any and all reissues, reexaminations, extensions, certificates of
correction, divisions, renewals, substitutions, confirmations, registrations,
revalidations, revisions, and additions of or to any of the foregoing. Without
limiting the foregoing, if at any time during the Term the parties mutually
agree in writing that any Vical Patent other than the Patents set forth above
can maintain market exclusivity of a Product in the Field in such country or
countries in the Territory, such Vical Patent shall thereafter be regarded as a
Vical Primary Patent and shall automatically be included in Section 1.76(a)
above with respect to such country or countries. For clarity, if the parties
cannot mutually agree regarding whether any other Vical Patent shall be included
as a Vical Primary Patent, such disagreement shall not be subject to arbitration
as set forth in Section 12.3(c) and such Vical Patent shall not be a Vical
Primary Patent.

1.77 “Vical Reserved Product” shall have the meaning provided in Section 3.5(b).

1.78 “Vical Retained Product” shall have the meaning provided in Section 3.5(a).

1.79 “Vical Technology” shall mean the Vical Patents and Vical Know-How.

1.80 “Withdrawal Notice” shall have the meaning provided in Section 2.6.

 

2. GOVERNANCE

2.1 Joint Steering Committee. For purposes of this Agreement and the U.S.
Agreement, the parties will establish one joint steering committee (the “JSC”)
to oversee the activities of the parties with respect to development,
regulatory, manufacturing and commercialization matters relating to Products in
the Field.

(a) Composition. The JSC will be comprised of three (3) members appointed by
Astellas and three (3) members appointed by Vical, or such other equal number of
members of each party agreed by Astellas and Vical. Each party will notify the
other party of its initial JSC members within thirty (30) days after the
Effective Date. Each party may change its JSC members at any time by written
notice to the other party, which may be delivered at a scheduled meeting of the
JSC. Any member of the JSC may designate a substitute to attend and perform the
functions of that member at any meeting of the JSC. The JSC shall appoint for
each meeting a Vical member or an Astellas member, on an alternating basis, as
chairman for such meeting, whose role shall be to (i) provide written notice to
the JSC members of agenda items proposed for discussion or decision at such
meeting at least ten (10) days prior to such JSC meeting, together with
appropriate information related thereto, and (ii) convene and preside at such
meeting of the JSC; provided, however, that the chairman shall not be entitled
to prevent items from being discussed or to cast any tie-breaking vote. Each
party may, with the consent of the other party, such consent not to be
unreasonably withheld or delayed, invite non-member, non-voting representatives
of such party to attend meetings of the JSC.

(b) Responsibilities. The JSC shall be responsible for monitoring and providing
strategic oversight of the parties’ activities with respect to development,
regulatory,

 

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manufacturing and commercialization matters relating to Products in the Field.
Without limiting the foregoing, the JSC shall:

(i) review and approve the Development Plan and the Manufacturing Plan
(including any amendments thereto);

(ii) review (but not approve) the Commercialization Plan (including any
amendments thereto);

(iii) provide a forum in which Astellas updates Vical, and Vical provides input,
with regard to development, regulatory, manufacturing and commercialization
matters relating to Products in the Field;

(iv) facilitate the exchange of data and other Information between the parties
with regard to development, regulatory, manufacturing and commercialization
matters relating to Products in the Field; and

(v) perform such other duties as are specifically assigned by the parties to the
JSC in this Agreement or any other written agreement between the parties.

(c) Meetings. The JSC will hold meetings at such frequency as determined by the
JSC members, but no less than once every six (6) months. Such meetings may be in
person, via videoconference, or via teleconference. The location of in-person
JSC meetings will alternate between Vical’s offices in San Diego, California and
Astellas’ offices in Deerfield, Illinois unless the parties otherwise agree.

(d) Decision-Making. The JSC may make decisions with respect to any subject
matter that is within the JSC’s decision-making authority. Subject to this
Section 2.1(d), all decisions of the JSC shall be made by unanimous vote, with
the representatives of Vical on the JSC collectively having one vote and the
representatives of Astellas on the JSC collectively having one vote in all such
decisions. If the JSC cannot make a decision with regard to any matter to be
decided by the JSC within fifteen (15) days after such matter has been brought
to the JSC’s attention, then such matter shall be referred to the Chief
Executive Officer of Vical and a senior executive of Astellas who reports
directly to the Chief Executive Officer of Astellas (the Chief Executive Officer
of Vical and such senior executive of Astellas, collectively, the “Executives”)
for resolution. If the Executives cannot resolve the issue within thirty
(30) days after the matter has been brought to their attention then, subject to
good faith consideration of the views of Vical, and subject to Section 2.4,
Astellas’ Executive shall have the tie-breaking vote on such matter.

2.2 Joint Development Committee. For purposes of this Agreement and the U.S.
Agreement, the parties will establish one joint development committee (the
“JDC”) with respect to development of Products in the Field.

(a) Composition. The JDC will be comprised of three (3) members appointed by
Astellas and three (3) members appointed by Vical, or such other equal number of
members of each party agreed by Astellas and Vical. Each party will notify the
other party of its

 

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initial JDC members within thirty (30) days after the Effective Date. Each party
may change its JDC members at any time by written notice to the other party,
which may be delivered at a scheduled meeting of the JDC. Any member of the JDC
may designate a substitute to attend and perform the functions of that member at
any meeting of the JDC. The JDC shall appoint for each meeting a Vical member or
an Astellas member, on an alternating basis, as chairman for such meeting, whose
role shall be to (i) provide written notice to the JDC members of agenda items
proposed for discussion or decision at such meeting at least ten (10) days prior
to such JDC meeting, together with appropriate information related thereto, and
(ii) convene and preside at such meeting of the JDC; provided, however, that the
chairman shall not be entitled to prevent items from being discussed or to cast
any tie-breaking vote. Each party may, with the consent of the other party, such
consent not to be unreasonably withheld or delayed, invite non-member,
non-voting representatives of such party to attend meetings of the JDC.

(b) Responsibilities. The JDC shall be responsible for oversight of the progress
of the parties’ activities with respect to development of Compounds and Products
in the Field. Without limiting the foregoing, the JDC shall:

(i) draft the Development Plan (including any amendments thereto) for approval
by the JSC, and provide a forum for review and discussion of the Development
Plan;

(ii) provide a forum for review and discussion of the results of the development
of Compounds and Products in the Field;

(iii) facilitate the exchange of Information between the parties regarding the
development of Compounds and Products in the Field; and

(iv) perform such other duties as are specifically assigned by the JSC to the
JDC.

(c) Meetings. The JDC will hold meetings at such frequency as determined by the
JDC members, but no less than once each Calendar Quarter. Such meetings may be
in person, via videoconference, or via teleconference. The location of in-person
JDC meetings will alternate between Vical’s offices in San Diego, California and
Astellas’ offices in Deerfield, Illinois unless the parties otherwise agree.

(d) Decision-Making. The JDC may make decisions with respect to any subject
matter that is within the JDC’s decision-making authority. Subject to this
Section 2.2(d), all decisions of the JDC shall be made by unanimous vote, with
the representatives of Vical on the JDC collectively having one vote and the
representatives of Astellas on the JDC collectively having one vote in all such
decisions. If the JDC cannot make a decision with regard to any matter to be
decided by the JDC within fifteen (15) days after such matter has been brought
to the JDC’s attention, then such matter shall be referred to the JSC for
resolution in accordance with Section 2.1(d).

2.3 Minutes. Reasonably detailed written minutes will be kept of all Committee
meetings and will reflect material decisions made at such meetings. Minutes for
each meeting of

 

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each Committee will be prepared by the chairman of such meeting and such minutes
shall be sent to each member of the respective Committee for review and approval
within ten (10) days after the meeting. Minutes will be deemed approved unless a
member of the respective Committee objects to the accuracy of such minutes
within fifteen (15) days of receipt.

2.4 Scope of Decision-Making. Neither Committee nor any Executive in the course
of resolving any dispute of the JSC shall have any right or power to amend this
Agreement, to decide any matter in contravention of any terms of this Agreement
or to change any rights or obligations of either party under this Agreement.
Without limiting the foregoing, neither Committee nor any Executive in the
course of resolving any dispute of the JSC shall have the right or power to
(a) require Vical to perform studies or other development work that is not
expressly agreed in writing by Vical and Astellas, or (b) require Vical to incur
expenses other than as set forth in this Agreement or otherwise expressly agreed
in writing by Vical and Astellas.

2.5 Expenses. Each party shall bear all its own costs in connection with its
participation in the Committees, including expenses incurred by the members that
it appoints to the Committees in connection with their activities as members of
the Committees.

2.6 Withdrawal. At any time during the Term and for any reason, Vical shall have
the right to withdraw from participation in either Committee or both Committees
upon written notice to Astellas, which notice shall be effective immediately
upon receipt (“Withdrawal Notice”). Following the issuance of a Withdrawal
Notice and subject to this Section 2.6, Vical’s representatives on the
applicable Committee(s) shall not participate in any meetings of the applicable
Committee(s), nor shall Vical have any right to vote on decisions within the
authority of the applicable Committee(s). If, at any time, following the
issuance of a Withdrawal Notice, Vical wishes to resume participation in the
applicable Committee(s), Vical shall notify Astellas in writing and, thereafter,
Vical’s representatives on the applicable Committee(s) shall be entitled to
attend any subsequent meeting of the applicable Committee(s) as if a Withdrawal
Notice had not been issued by Vical. Following Vical’s issuance of a Withdrawal
Notice, unless and until Vical resumes participation in the applicable
Committee(s) in accordance with this Section 2.6: (a) all meetings of the
Committee(s) shall be held at Astellas’ facilities; (b) Astellas shall have the
right to make the final decision on all matters within the scope of authority of
the Committee(s); and (c) Vical shall have the right to continue to receive the
minutes of the Committee(s) meetings, but shall not have the right to approve
the minutes for any meeting of the applicable Committee(s) held after Vical’s
issuance of a Withdrawal Notice. For clarity, if Vical withdraws and then
resumes participation in a Committee, it shall not have any right to
retroactively review or modify any decision made by the Committee during Vical’s
withdrawal period.

2.7 Manufacturing Coordinators. Promptly after the Effective Date, each party
shall appoint an individual to act as the manufacturing coordinator for such
party (the “Manufacturing Coordinator”). The Manufacturing Coordinators shall be
the primary contacts of the parties regarding the manufacture of Compounds and
Products in the Field (including CMC activities such as formulation, analytical
and process development, and scale-up, stability, packaging and shipping
studies), draft the Manufacturing Plan (including any amendments thereto) for
approval by the JSC and otherwise facilitate the exchange of Information between

 

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the parties regarding the manufacture of Compounds and Products in the Field.
The Manufacturing Coordinators will meet at such frequency as determined by the
Manufacturing Coordinators, but no less than once every six (6) months. Each
Manufacturing Coordinator shall be permitted to attend meetings of the JSC as
non-voting participants. Each party may replace its Manufacturing Coordinator
with an alternative representative at any time with prior written notice to the
other party.

 

3. LICENSES AND OTHER RIGHTS

3.1 License and Sublicense Grant. Subject to the terms and conditions of this
Agreement, Vical hereby grants to Astellas an exclusive (even as to Vical and
its Affiliates, but subject to Vical’s performance of such development,
regulatory and manufacturing activities as agreed in writing by the parties),
royalty-bearing license and sublicense, with the right to sublicense in
accordance with Section 3.2, under the Vical Technology, to research, develop,
register, make, have made, use, promote, distribute, sell, offer for sale, have
sold, import and export Products in the Field in the Territory.

3.2 Sublicensing. Astellas shall have the right to grant sublicenses under the
license granted in Section 3.1 to one or more Third Parties or Affiliates
subject to the provisions of this Section 3.2. Each agreement under which
Astellas grants a sublicense under the license granted in Section 3.1 (each, a
“Sublicense Agreement”) shall (a) be in writing and (b) be consistent with, and
subject to the terms and conditions of, this Agreement (including the terms
relating to sublicenses of Vical Technology licensed or conveyed to Vical under
the CytRx Agreement, as applicable). Astellas shall be responsible for
compliance of any Sublicensee with this Agreement. Any breach of this Agreement
by the acts or omissions of a Sublicensee shall be a breach of this Agreement by
Astellas. Astellas shall provide Vical with a full and complete copy of each
Sublicense Agreement with a Third Party (and if required by the CytRx Agreement,
each Sublicense Agreement with an Affiliate) within […***…] ([…***…]) days after
execution thereof; provided, that Astellas may redact any confidential
information contained therein that is not necessary to disclose to ensure
compliance with this Agreement.

3.3 In-License Agreements. Astellas acknowledges that the Vical Technology
licensed or otherwise conveyed to Vical under the CytRx Agreement is subject to
the applicable terms and conditions of the CytRx Agreement. In the event that
CytRx notifies Vical of a default or breach under the CytRx Agreement related to
any failure by Astellas or any Sublicensee to perform any obligation or covenant
under this Agreement, the parties will discuss how to resolve the matter and, if
the parties agree to a proposed resolution of the matter, they will cooperate in
responding to CytRx. If Astellas does not resolve such matter as agreed by the
parties, or if the parties do not agree to a resolution of the matter, then
Vical shall have the right, but not the obligation, to take such actions as
reasonably necessary or appropriate to cure such default or breach and shall
keep Astellas reasonably informed regarding such actions, and Astellas shall
promptly reimburse Vical for all reasonable costs and expenses actually incurred
by Vical solely as a result of such default or breach by Astellas or any
Sublicensee. In the event Vical receives from CytRx notice of termination of the
CytRx Agreement, Vical shall notify Astellas thereof within […***…] ([…***…])
days after receipt by Vical of such notice. Vical shall have no liability to
Astellas for any termination or modification of the CytRx Agreement arising out
of or resulting from the failure of Astellas or any Sublicensee to abide by,
comply with or perform under the

 

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terms, conditions or obligations of this Agreement. In addition, in the event
the rights to the Vical Technology licensed to Vical under the CytRx Agreement
cease to be licensed to Vical under the CytRx Agreement and Astellas obtains a
license with respect to such Vical Technology directly from CytRx, then Astellas
may deduct from the applicable payments owed to Vical hereunder the amount
actually paid by Astellas to CytRx for such license with respect to such Vical
Technology up to the amount that Vical would have been obligated to pay to CytRx
under the CytRx Agreement with respect to such payment.

3.4 Disclosure of Vical Know-How. Upon Astellas’ request, Vical shall make
available to Astellas Vical Know-How in Vical’s possession that has not
previously been provided to Astellas, including any raw data and/or original
data relating to Compounds and Products in the Field; provided that any Vical
Know-How relating to the manufacture of Compounds and Products in the Field
shall be made available through a technology transfer arrangement as provided in
the Services Agreement. Vical shall not destroy, discard or otherwise dispose of
or shall have not destroyed, discarded or otherwise disposed of any Vical
Know-How without prior written approval of Astellas, which approval shall not be
unreasonably withheld.

3.5 Agreements.

(a) By Vical. During the Term, Vical shall not, directly or indirectly through
any Affiliate or Third Party, market, promote, distribute, offer for sale or
sell, or grant any license or sublicense under the Vical Technology to market,
promote, distribute, offer for sale or sell, (i) any Product that contains any
formulation of one or more Compound(s) with poloxamer CRL1005 (an “Excluded
Product”) outside the Field in the Territory or (ii) any pharmaceutical product
that contains any formulation of one or more Compound(s) wih the Vaxfectin
Adjuvant, alone or in combination with one or more other therapeutically antd/or
prophylactically active ingredients, in any dosage form or mode of
administration (a “Vical Retained Product”) in the Field in the Territory;
provided, however, that nothing shall prevent Vical from, directly or indirectly
through any Affiliate or Third Party, marketing, promoting, distributing,
offering for sale or selling, or granting any license or sublicense under the
Vical Technology to market, promote, distribute, offer for sale or sell, any
Vical Retained Product so long as Vical or such Affiliate or Third Party does
not market or promote the Vical Retained Product for use in the Field in the
Territory.

(b) Reserved Products. The provisions of this Section 3.5(b) shall apply with
respect to any Product other than an Excluded Product (a “Reserved Product”)
outside the Field in the Territory. Vical retains all rights, directly or
indirectly through any Affiliate or Third Party, to research, develop, market,
promote, distribute, offer for sale or sell, or grant any license or sublicense
under the Vical Technology to research, develop, market, promote, distribute,
offer for sale or sell, any Reserved Product outside the Field in the Territory,
subject to this Section 3.5(b) (any such Reserved Product with respect to which
Vical has retained rights, a “Vical Reserved Product”). Astellas may notify
Vical in writing that it proposes to designate any Reserved Product as an
“Astellas Reserved Product,” specifying whether such Reserved Product would
contain a Compound alone, a Compound formulated with an adjuvant (identifying
the adjuvant) or a Compound administered through a delivery system (identifying
the delivery system). Astellas may provide such written request at any time
after it or its

 

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Sublicensee has initiated good laboratory practices preclinical studies of such
Reserved Product. The Reserved Product specified in such written notice from
Astellas shall be deemed an Astellas Reserved Product unless Vical provides
written notice to Astellas within thirty (30) days after Vical’s receipt of such
written notice from Astellas that Vical has granted a license or similar rights
with respect to such Product to a Third Party or has initiated good laboratory
practices preclinical studies of such Reserved Product, in which case such
Reserved Product shall not be an Astellas Reserved Product and shall remain a
Vical Reserved Product. During the Term for so long as Astellas uses
Commercially Reasonable Efforts to develop, manufacture and commercialize an
Astellas Reserved Product, Vical shall not, directly or indirectly through any
Affiliate or Third Party, market, promote, distribute, offer for sale or sell,
or grant any license or sublicense under the Vical Technology to market,
promote, distribute, offer for sale or sell, such Astellas Reserved Product
outside the Field in the Territory.

(c) By Astellas. During the Term, Astellas shall not, directly or indirectly
through any Affiliate or Third Party, market, promote, distribute, offer for
sale or sell, or grant any license or sublicense to market, promote, distribute,
offer for sale or sell, any DNA vaccine product for use in the Field in the
Territory, other than Products in the Field in the Territory (a “Competitive
Product”). Further, Astellas agrees not to practice any Vical Technology except
to develop, register, make, have made, use, promote, distribute, sell, offer for
sale, have sold, import and export Products in the Field in the Territory during
the Term in accordance with the terms of this Agreement and any other written
agreement between the parties. If Astellas or any of its respective Affiliates
signs a definitive agreement whereby it would acquire a license to or ownership
of a Competitive Product, acquire ownership or control of or otherwise merge
with an entity that owns or has a license to (or is commercializing for its own
account) a Competitive Product or be acquired by or otherwise merged with an
entity that owns or has a license to (or is commercializing for its own account)
a Competitive Product, in all such cases that would result in a violation of
this Section 3.5(c), then Astellas or its Affiliate shall promptly notify Vical
in writing and, as promptly as reasonably possible but in no event later than
[…***…] after the signing date of such definitive agreement (“Restricted
Period”), either (i) divest itself of such Competitive Product and notify Vical
in writing of such divesture, or (ii) notify Vical in writing that such
Competitive Product shall be incorporated into this Agreement and thereafter
such Competitive Product shall be a Product subject to the terms and conditions
of this Agreement. If Astellas or its Affiliate elects to divest itself of such
Competitive Product, such divesture shall occur by an outright sale to a Third
Party of all of Astellas’ and its Affiliate’s rights to such Competitive
Product. For clarity, the commercialization of such Competitive Product during
the Restricted Period shall not constitute a violation of Section 3.5(c).

3.6 Retained Rights; No Implied Licenses. Except for the rights and licenses
expressly granted in this Agreement, Vical retains all rights under the Vical
Technology, and no rights shall be deemed granted by Vical to Astellas by
implication, estoppel or otherwise.

 

4. DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS

4.1 Development of Products in the Field in the Territory. Subject to the terms
and conditions of this Agreement, during the Term, Astellas shall be solely
responsible for the development of and obtaining Regulatory Approvals for
Products in the Field in the Territory, including all costs associated with such
activities, subject to the terms of any written agreement

 

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between the parties providing for Vical to perform any such activities. Without
limiting the foregoing, Astellas shall have sole responsibility, at Astellas’
cost and expense, for conducting clinical and non-clinical studies of Products
in the Field in the Territory and for preparing, filing, obtaining and
maintaining the appropriate applications with Regulatory Authorities, and for
all contacts with Regulatory Authorities, regarding Products in the Field in the
Territory. Astellas shall use Commercially Reasonable Efforts to develop, and to
file for, obtain and maintain Regulatory Approvals for, at least one Product
[…***…] and at least one Product […***…] in the Field […***…]. Astellas shall
perform all development and regulatory activities with respect to Products in
the Field in the Territory in compliance with the Development Plan and all
applicable laws, rules and regulations. Furthermore, Astellas shall be solely
responsible for the timely reporting of all relevant adverse drug
reactions/experiences, Product quality, Product complaints and safety data
relating to Compounds and Products, in each case in the Field, to the
appropriate Regulatory Authorities in accordance with the applicable laws, rules
and regulations of the relevant countries and Regulatory Authorities. Prior to
commencement of the first Phase 3 Clinical Trial, Vical shall complete transfer
from Vical to Astellas of the global safety database with respect to Compounds
and Products in the Field. In addition, each party shall cooperate, and shall
cause its Affiliates, licensees and Sublicensees to cooperate, in implementing
and adhering to a safety data exchange arrangement with respect to Compounds and
Products in the Territory that shall be set forth in a safety data exchange
agreement executed by the parties.

4.2 Commercialization of Products in the Field in the Territory. Subject to the
terms and conditions of this Agreement, during the Term, Astellas shall be
solely responsible for the commercialization of Products in the Field in the
Territory, including any post-marketing studies of Products in the Field in the
Territory, including all costs associated with such activities. Astellas shall
use Commercially Reasonable Efforts to commercialize at least one Product
[…***…] and at least one Product […***…] in the Field […***…]. Within a
reasonable time prior to anticipated commercial launch of a Product, Astellas
shall prepare a plan for the marketing, promotion and commercialization of such
Product in the Field in the Territory, which plan shall be in reasonable scope
and detail and may be amended by Astellas (the “Commercialization Plan”).
Astellas shall provide, or cause to be provided, the Commercialization Plan to
the JSC for review on an annual basis and shall provide, or cause to be
provided, any material amendments to the Commercialization Plan to the JSC for
review. Astellas shall perform all commercialization activities with respect to
Products in the Field in the Territory in compliance with the Commercialization
Plan and all applicable laws, rules and regulations. Without limiting the
foregoing, Astellas shall have the sole right and responsibility for all
commercial and medical affairs matters with respect to Products in the Field in
the Territory.

4.3 Manufacture and Supply of Products. Subject to the terms and conditions of
this Agreement and the Services Agreement, during the Term, Astellas shall be
solely responsible for the manufacture and supply of Products in the Field in
the Territory, including CMC-related work necessary for obtaining Regulatory
Approval for Products in the Field in the Territory, including all costs
associated with such activities. Astellas shall perform all

 

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manufacturing activities with respect to Products in the Field in the Territory
in compliance with the Manufacturing Plan and all applicable laws, rules and
regulations.

4.4 Disclosure Regarding Astellas’ Efforts. Astellas shall keep Vical regularly
and fully informed regarding development, regulatory, manufacturing and
commercialization activities of Astellas and its Sublicensees with respect to
Products in the Field in the Territory. Without limiting the foregoing, Astellas
shall keep Vical reasonably informed of the progress of such activities, through
the JSC, the JDC and directly, and shall, within […***…] after the end of each
Calendar Year during the Term, provide Vical a report setting forth a reasonably
detailed description of the progress and status of development, manufacture and
commercialization of, and regulatory strategy and filings made and Regulatory
Approvals obtained for, Products in the Field in the Territory, and a reasonably
detailed description of the development, manufacture, commercialization and
regulatory activities that Astellas plans to undertake during the subsequent
Calendar Year.

4.5 Subcontractors. Astellas may perform some or all of its obligations under
this Article 4 through one or more subcontractors (which may include Vical).
Astellas shall remain responsible for the performance by any Third Party
subcontractors and the compliance of such Third Party subcontractors with the
provisions of this Agreement in connection with such performance.

 

5. FEES AND PAYMENTS

5.1 Upfront Fee. Within thirty (30) days after the Effective Date, Astellas
shall make a non-refundable, non-creditable payment to Vical of US$[…***…].

5.2 Milestone Payments. Within thirty (30) days after the occurrence of each of
the following milestone events, Astellas shall pay to Vical the corresponding
non-refundable, non-creditable milestone payment set forth below (whether such
milestone event is achieved by Astellas or any Sublicensee):

 

Milestone Event

   Milestone Payment  

[...***...]

   US$ […***…]   

[...***...]

  

[...***...]

   US$ […***…]   

 

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[...***...]

  

[...***...]

  

 

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[...***...]

   US$ [...***...]   

[...***...]

  

[...***...]

   US$ [...***...]   

[...***...]

  

 

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[...***...]

  

Each of the milestone payments described in this Section 5.2 shall be payable
one time for the first achievement of such milestone event by any applicable
Product, regardless of the number of other Products that subsequently achieve
such milestone event. For clarification, in the event two or more milestone
events are achieved at the same time, the milestone payments for both milestone
events shall be due.

5.3 Royalties.

(a) Royalty Rate. Astellas shall pay Vical royalties equal to […***…] percent
([…***…]%) of Net Sales of Products in the Field in the Territory.

(b) Royalty Term. Royalties under this Section 5.3 shall be payable on a
Product-by-Product and country-by-country basis during the period of time
commencing on the First Commercial Sale of such Product in such a country in the
Territory and ending upon the latest to occur of (i) expiration of the last to
expire Valid Claim with respect to such Product (or any Compound therein) in
such country, (ii) expiration of any data or other regulatory exclusivity period
for such Product in such country or (iii) ten (10) years after the earliest date
of First Commercial Sale of such Product for any indication in the Field in such
country (the “Royalty Term”).

(c) Royalty Reduction. During any portion of the Royalty Term for a Product in a
country in which there is no Valid Claim with respect to such Product in such
country, (i) if a Generic Product is approved by the Regulatory Authority in
such country and such Regulatory Authority reduces the reimbursement amount for
such Product in such country by […***…] percent ([…***…]%) or more of the
reimbursement amount prior to approval of such Generic Product in such country,
the royalty rate payable under Section 5.3(a) on Net Sales of such Product in
such country during such portion of the Royalty Term shall be reduced by […***…]
percent ([…***…]%) (i.e., from […***…]% to […***…]%); or (ii) if a Generic
Product is approved by the Regulatory Authority in such country but
Section 5.3(c)(i) is not applicable, and sales of such Generic Product(s) in
such country are equal to or greater than […***…] percent ([…***…]%) of total
unit number of such Product and the Generic Product(s) in such country for at
least […***…] ([…***…])[…***…] Calendar Quarters, the royalty rate payable under
Section 5.3(a) on Net Sales of such Product in such country during such portion
of the Royalty Term shall be reduced by […***…] percent ([…***…]%) (i.e., from
[…***…]% to […***…]%).

5.4 Payments to Third Parties. Vical shall be responsible for any fees,
milestone and royalty payments owed to CytRx under the CytRx Agreement. Except
as provided in the preceding sentence, Astellas (or its Sublicensee) shall be
responsible for any and all payments owed to any Third Party for any Patents,
Information or other intellectual property rights licensed or acquired by
Astellas (or its Sublicensee) after the Effective Date in order to develop,

 

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make, have made, use, promote, distribute, sell, offer for sale, have sold or
import any Product in the Field in the Territory (it being understood that the
decision to license or acquire any such Patents, Information or other
intellectual property rights shall be at Astellas’ (or its Sublicensee’s)
discretion).

 

6. PAYMENT; RECORDS; AUDITS

6.1 Payment; Reports. All payments due under this Agreement shall be paid within
[…***…] ([…***…]) days of the end of each Calendar Quarter, unless otherwise
specifically provided herein. Royalty payments shall be calculated and reported
for each Calendar Quarter. Each royalty payment due to Vical shall be
accompanied by a report of Net Sales by Astellas and its Sublicensees, each in
sufficient detail to permit confirmation of the accuracy of the payment made,
including, without limitation and on a country-by-country basis, the number of
Products sold, the gross sales with reconciliation to Net Sales of such
Products, the royalties payable, the method used to calculate the royalties, and
the exchange rates used.

6.2 Exchange Rate; Manner and Place of Payment. All payments hereunder shall be
payable in U.S. dollars. When conversion of payments from any foreign currency
is required, such conversion shall be at an exchange rate equal to the weighted
average of the rates of exchange (i.e. the average of TTS rate and TTB rate) for
the currency of the country from which the royalties are payable as published by
the Bank of Tokyo Mitsubishi UFJ, Ltd. in Japan (or such other bank or source
agreed in writing by the parties), during the Calendar Quarter for which a
payment is due. All payments owed under this Agreement shall be made by wire
transfer in immediately available funds to a bank account designated in writing
by Vical, unless otherwise specified in writing by Vical.

6.3 Income Tax Withholding. Each party will pay any and all taxes levied on
account of any payments made to it under this Agreement. If any taxes are
required to be withheld by the paying party, the paying party will (a) deduct
such taxes from the payment made to the other party, (b) timely pay the taxes to
the proper taxing authority, and (c) send proof of payment to the other party
and certify its receipt by the taxing authority within thirty (30) days
following such payment. For purposes of this Section, each party agrees to
provide the other with reasonable assistance to enable the due deduction by the
paying party and appropriate recovery by the other party, which assistance
includes, but is not limited to, provision of any tax forms and other
information that may be reasonably necessary in order for the paying party not
to withhold tax or to withhold tax at a reduced rate under an applicable
bilateral income tax treaty.

6.4 Records; Audits. Astellas shall keep, and require its Sublicensees to keep,
complete, fair and true books of accounts and records for the purpose of
determining the amounts payable to Vical pursuant to this Agreement, as well as
the expenses of any […***…]. Such books and records shall be kept for such
period of time required by law, but no less than […***…] ([…***…]) years
following the end of the Calendar Quarter to which they pertain. Vical (or
CytRx, as applicable) shall have the right to cause an independent, certified
public accountant, reasonably acceptable to Astellas, to audit such records to
confirm Net Sales, royalties and other payments for a period covering not more
than the preceding six (6) years. Except for any audits of the expenses of any
[…***…], for-cause audits or as

 

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otherwise permitted under the CytRx Agreement, as applicable, audits may be
exercised not more often than […***…] each year, […***…] for each relevant
record, and during normal business hours upon reasonable prior written notice to
Astellas. Any such auditor shall not disclose Astellas’ Confidential Information
to Vical, except to the extent such disclosure is necessary to verify the
accuracy of such records. Prompt adjustments shall be made by the parties to
reflect the results of such audit. Vical (or CytRx, as applicable) shall bear
the full cost of such audit unless such audit discloses an underpayment by
Astellas of more than […***…] percent ([…***…]%) of the amount of royalties or
other payment due under this Agreement or an overstatement by more than […***…]
percent ([…***…]%) of the expenses of any […***…], in which case, Astellas shall
bear the full cost of such audit and shall promptly remit to Vical the amount of
any underpayment.

6.5 Late Payments. In the event that any payment due under this Agreement is not
made when due, the payment shall accrue interest from the date due at the rate
of […***…] percent ([…***…]%) above the U.S. Prime Rate (as set forth by
Bloomberg (Ticker symbol PRIME index)); provided, however, that in no event
shall such rate exceed the maximum legal annual interest rate. The payment of
such interest shall not limit Vical from exercising any other rights it may have
as a consequence of the lateness of any payment.

 

7. INTELLECTUAL PROPERTY

7.1 Ownership. Vical has, and shall retain, all right, title and interest in and
to, the Vical Patents and Vical Know-How. […***…].

7.2 Patent Prosecution and Maintenance. As between the parties, Vical (or its
licensor, as applicable) shall have the sole right (except as otherwise provided
in this Section 7.2 with respect to opposition proceedings regarding any
continuation of […***…], but not the obligation, to prepare, file, prosecute
(including any interferences, extensions, reissue proceedings and
reexaminations) and maintain the Vical Patents, at its sole cost (subject to
Section 7.3) and by counsel of its own choice. Vical shall provide Astellas with
reasonable opportunity to review and comment on any material document that Vical
intends to file or cause to be filed with the relevant intellectual property or
patent office with respect to the Vical Patents in the Territory, and Vical
shall give due consideration to such comments provided by Astellas. Astellas
agrees to reasonably cooperate in the preparation, filing, and prosecution of
any Vical Patents and in the obtaining and maintenance of any supplementary
protection certificates and the like with respect to any Vical Patent claiming a
Product being developed or commercialized by Astellas or Sublicensees in the
Territory. Such cooperation includes, but is not limited to, promptly informing
Vical of any matters coming to Astellas’ attention that may affect the
preparation, filing, prosecution or maintenance of any Vical Patents. In the
event Vical elects not to defend any opposition proceeding for any […***…] in
the Field in the Territory, Vical shall provide

 

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written notice thereof to Astellas, and Astellas shall have the right, but not
the obligation, to defend such opposition proceeding, at its sole cost and by
counsel of its own choice, and, if Astellas elects to do so, Astellas shall keep
Vical reasonably informed with respect thereto. In such case, Vical agrees to
reasonably cooperate in defending the opposition proceeding. In addition, in the
event that Vical determines to abandon or cease prosecution or maintenance of
any Vical Patent in the Territory, Vical shall provide reasonable prior written
notice to Astellas of such intention to abandon or cease prosecution or
maintenance. In such case, subject to the rights of Vical’s licensor with
respect to any Vical Patent licensed to Vical by a Third Party, Astellas may
elect, upon written notice by Astellas to Vical, to cause Vical to continue
prosecution and/or maintenance of such Vical Patent in the Territory, at Vical’s
sole cost and expense for any Vical Primary Patent, and at Astellas’ sole cost
and expense and in accordance with Astellas’ instructions for any such Vical
Patent that is not a Vical Primary Patent. Astellas shall reimburse Vical for
such costs and expenses incurred by Vical in connection with prosecuting and/or
maintaining any such Vical Patent that is not a Vical Primary Patent within
thirty (30) days from the date of invoice for such costs and expenses by Vical.
In the event that Astellas desires to cease bearing the costs and expenses with
respect to any such Vical Patent, Astellas shall provide reasonable prior
written notice to Vical of such intention. In such case, Vical shall have the
right, but not the obligation, to elect to continue prosecuting and maintaining
any such Vical Patent at its own expense.

7.3 Additional Patent Term Extension Obligations. Astellas shall keep Vical
fully informed of the progress of Astellas (and, as applicable, its
Sublicensee(s)) toward Regulatory Approval of the first Product in the
Territory. Astellas shall assist Vical in determining with respect to such
Product if the Vical Patents would be eligible for patent term extension
pursuant to 35 U.S.C. §§154–56, supplementary protection certificate, and, as
appropriate, applicable foreign patent laws (“Patent Term Extension”). Astellas
acknowledges that time is of the essence with respect to submission of any
application for Patent Term Extension. Astellas shall give Vical notification in
writing of its (or, as applicable, its Sublicensee’s) first obtaining Regulatory
Approval of a Product in the Territory within […***…] ([…***…]) days of receipt
of written notice of such Regulatory Approval from the applicable Regulatory
Authority. Vical shall apply for Patent Term Extension for any Vical Primary
Patent as requested by Astellas, at Vical’s expense. At Vical’s request,
Astellas shall, in a timely manner, reasonably assist Vical in preparing an
application for Patent Term Extension. Astellas (and, as applicable, its
Sublicensee(s)) shall reasonably cooperate with Vical in preparing the
applications for Patent Term Extension. Astellas agrees to join in such
applications at Vical’s request. Astellas shall reasonably support such
applications and shall provide such information as may be requested by Vical or
any Regulatory Authority in support of such applications.

7.4 Patent Enforcement. Each party shall promptly notify the other in writing of
any alleged or threatened infringement of any Vical Patent in the Territory of
which such party becomes aware. The following provisions shall apply with
respect any action or proceeding with respect to infringement by a Third Party
of any Vical Patent in the Territory, subject to the terms of the CytRx
Agreement with respect to Vical Patents licensed from CytRx.

 

***Confidential Treatment Requested

 

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(a) Enforcement.

(i) Astellas First Right. As between the parties, excepting Patents licensed to
Vical under the CytRx Agreement, Astellas shall have the first right to bring
and control any action or proceeding with respect to infringement by a Third
Party of any Vical Patent in the Field in the Territory, at its own expense and
by counsel of its own choice, except as provided in this Section 7.4(a)(i) and
except that Section 7.4(a)(ii) shall instead apply with respect to infringement
by a Third Party of any Vical Patent both in the Field and outside the Field in
the Territory. Vical shall have the right, at its own expense, to be represented
in any such action with respect to infringement of any Vical Patents in the
Field in the Territory by counsel of its own choice, and Astellas and its
counsel shall reasonably cooperate with, and take into account the view of,
Vical and its counsel in strategizing, preparing and presenting any such action
or proceeding. If Astellas fails to bring an action or proceeding with respect
to infringement of any Vical Patent in the Field in the Territory within
(A) […***…] ([…***…]) days following the notice of alleged infringement or
(B) […***…] ([…***…]) days before the time limit, if any, set forth in the
appropriate laws and regulations for the filing of such actions, whichever comes
first, Vical shall have the right (but not the obligation) to bring and control
any such action at its own expense and by counsel of its own choice, and
Astellas shall have the right, at its own expense, to be represented in any such
action by counsel of its own choice.

(ii) Vical First Right. As between the parties, Vical shall have the first right
to bring and control any action or proceeding with respect to infringement by a
Third Party of any Vical Patent (including any Patents licensed to Vical under
the CytRx Agreement) in the Territory other than as set forth in
Section 7.4(a)(i) at its own expense and by counsel of its own choice, except as
provided in this Section 7.4(a)(ii). Astellas shall have the right, at its own
expense, to be represented in any such action with respect to any such
infringement of any Vical Patents in the Territory by counsel of its own choice,
and Vical and its counsel shall reasonably cooperate with, and take into account
the view of, Astellas and its counsel in strategizing, preparing and presenting
any such action or proceeding. If Vical fails to bring an action or proceeding
with respect to such infringement of any Vical Patent in the Territory within
(A) […***…] ([…***…]) days following the notice of alleged infringement or
(B) […***…] ([…***…]) days before the time limit, if any, set forth in the
appropriate laws and regulations for the filing of such actions, whichever comes
first, and such infringement of such Vical Patent would have a material adverse
effect on Astellas’ rights with respect to any Product in the Field in the
Territory, then Astellas shall have the right (but not the obligation) to bring
and control any such action at its own expense and by counsel of its own choice,
and Vical shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice.

(b) Cooperation; Awards. In the event a party brings an infringement action in
accordance with this Section 7.4, the other party shall reasonably cooperate,
including if required to bring such action, joining such action as a necessary
party or the furnishing of a power of attorney. Neither party shall have the
right to settle any patent infringement litigation with respect to any Vical
Patent under this Section 7.4 in a manner that diminishes the rights or
interests of the other party without the consent of such other party (which
shall not be unreasonably withheld). Except as otherwise agreed to by the
parties as part of a cost-sharing arrangement, any recovery or damages realized
as a result of such action or proceeding shall be used first to reimburse the
parties’ documented out-of-pocket legal expenses relating to the

 

***Confidential Treatment Requested

 

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action or proceeding, and any remaining damages relating to the Products
(including lost sales or lost profits with respect to Products) shall be
retained by the party that brought and controlled the action and, if Astellas
brought and controlled such action, shall be deemed Net Sales subject to the
royalty provisions of Section 5.3.

7.5 Third Party Infringement Claims. Each party shall promptly notify the other
party in writing of any allegation by a Third Party that the activity of either
party with respect to the development, manufacture or commercialization of any
Product in the Field in the Territory infringes or may infringe the intellectual
property rights of such Third Party. Vical shall have the sole right to control
any defense of any such claim involving alleged infringement of Third Party
rights by Vical’s activities, at Vical’s sole cost and expense and by counsel of
its own choice, and Astellas shall have the right, at its own expense, to be
represented in any such action by counsel of its own choice. Astellas shall have
the sole right to control any defense of any such claim involving alleged
infringement of Third Party rights by Astellas’ activities, at Astellas’ sole
cost and expense and by counsel of its own choice, and Vical shall have the
right, at its own expense, to be represented in any such action by counsel of
its own choice. Neither party shall enter into any settlement or compromise of
any action under this Section 7.5 which would in any manner diminish the rights
or interests of the other party without the consent of such other party (which
shall not be unreasonably withheld).

7.6 Orange Book Listing. Astellas shall have the sole right to make any filing
with respect to any Vical Primary Patents in connection with the Patent listing
source in any country in the Territory that is equivalent to the Orange Book, if
any. Upon request of Astellas, with respect to countries in the Territory, Vical
shall cooperate with Astellas to file appropriate information with the
applicable Regulatory Authority listing any Vical Primary Patents.

7.7 Patent Marking. Astellas shall mark all Products made, used or sold in the
Territory, or their containers, if required under applicable laws, rules and
regulations relating to patent marking.

7.8 Registration of License. Astellas may, at its sole discretion and at its own
expense, register the license granted under this Agreement with the patent
office or any other competent authorities in any country of the Territory in
accordance with the relevant law in such country, and Vical shall, promptly upon
Astellas’ request, provide Astellas with assistance necessary for such
registration, including without limitation applying for such registration for
Astellas and signing all necessary documents.

7.9 Trademarks. Astellas shall be responsible for selection, registration and
maintenance of the trademark(s) for Products in the Field in the Territory, at
its own cost, and all such trademark(s) shall be filed and exclusively owned by
Astellas. At Astellas’ election, Vical shall grant to Astellas during the Term a
royalty-free exclusive license with the right to sublicense under Vical’s
interest in Vical’s common law trademark TransVax™ for use solely in connection
with the sale and offer for sale of Products in the Field in the Territory. Such
license shall become perpetual in the event Astellas obtains a perpetual and
fully paid-up license and sublicense under the Vical Technology pursuant to
Section 10.1. For clarity, Vical is and shall remain the owner of all right,
title and interest in and to Vical’s common law trademark

 

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TransVax™ and the goodwill now and hereafter associated therewith shall at all
times inure to the benefit of Vical.

 

8. REPRESENTATIONS AND WARRANTIES

8.1 Mutual Representations and Warranties. Each party represents and warrants to
the other party as of the Effective Date that:

(a) Organization. It is duly organized and validly existing under the laws of
its jurisdiction of incorporation or formation, and has full corporate or other
power and authority to enter into this Agreement and to carry out the provisions
hereof.

(b) Authorization. It is duly authorized to execute and deliver this Agreement
and to perform its obligations hereunder, and the person or persons executing
this Agreement on its behalf has been duly authorized to do so by all requisite
corporate or partnership action.

(c) Binding Agreement. This Agreement is legally binding upon it, enforceable in
accordance with its terms, and does not conflict with any agreement, instrument
or understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any material law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it.

(d) Agreements with Employees and Contractors. All of such party’s employees or
contractors acting on its behalf pursuant to this Agreement or any other written
agreement between the parties are and will be obligated under a binding written
agreement to comply with obligations of confidentiality and non-use consistent
with those set forth in Article 9.

(e) No Debarment. Such party is not debarred under the United States Federal
Food, Drug and Cosmetic Act or comparable laws in any other country or
jurisdiction, and it does not, and will not during the Term, employ or use the
services of any person or entity who is debarred, in connection with the
development, manufacture or commercialization of the Products. In the event that
either party becomes aware of the debarment or threatened debarment of any
person or entity providing services to such party, including the party itself
and its Affiliates or Sublicensees, which directly or indirectly relate to
activities under this Agreement, the other party shall be immediately notified
in writing.

8.2 Vical Representations and Warranties. Vical represents, warrants and
covenants to Astellas as of the Effective Date that:

(a) Control. Except for those rights in-licensed by Vical under the CytRx
Agreement, Vical is the sole owner of all of the Vical Technology existing as of
the Effective Date, free and clear of all liens.

(b) Right to Grant License. Vical has the right to grant the license and
sublicenses it grants to Astellas under Section 3.1 of this Agreement.

 

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(c) No Conflicting Grant of Rights. Vical and its Affiliates have not, and will
not during the Term, grant any right to any Third Party that would conflict with
the rights granted to Astellas hereunder or, except with Astellas’ prior written
consent, allow a Third Party to create and maintain any security interest in
(i) Vical Patents (excepting Patents licensed to Vical under the CytRx
Agreement) or (ii) any rights granted to Astellas hereunder, to secure
third-party financing; provided that Vical may allow a Third Party to create and
maintain such a security interest without Astellas’ prior written consent if
such security interest is subject to the rights granted to Astellas under such
Vical Patents or other rights as set forth in this Agreement.

(d) No Infringement. Vical has not received any notice alleging, and is not
otherwise actually aware, that the practice of the Vical Patents infringes or
may infringe any Patent(s) of any Third Party.

(e) No Legal Actions. As of the Effective Date, there are no pending legal
actions, nor has Vical received any written notice regarding any pending legal
actions, with respect to the Vical Technology, and no Vical Patent is the
subject of any interference, opposition, cancellation or other protest
proceeding.

(f) Disclosure. Up to and including the Effective Date, Vical has made available
to Astellas (i) all material information (including without limitation
pre-clinical and clinical data) in its possession or Control relating to the
Compound, the Product(s) and Vical Patents in the Field in the Territory,
including material information in its possession or Control that is material to
the utility or safety of the Compound and/or the Product(s) in the Field in the
Territory, and (ii) all safety data in its possession or Control relating to the
Compound and Product(s).

8.3 Disclaimer. Except as expressly set forth herein, THE VICAL TECHNOLOGY IS
PROVIDED “AS IS,” AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF
ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF
DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF
THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES.

8.4 Limitation of Liability. NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE
OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN
CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER; provided,
however, that this Section 8.4 shall not be construed to limit either party’s
indemnification obligations under Article 11 or its right to obtain recover
damages for breach of Article 9. For clarification, payments under Article 5
shall not be considered special, incidental, consequential or punitive damages.

 

9. CONFIDENTIALITY

9.1 Confidential Information. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the parties, the parties agree that,
during the Term

 

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and until the […***…] ([…***…]) anniversary of the date of expiration or
termination of the later to expire or terminate of this Agreement or the U.S.
Agreement, each party (in such capacity, the “receiving party”) shall keep
confidential and shall not publish or otherwise disclose and shall not use for
any purpose other than as expressly provided for in this Agreement or the
Confidentiality Agreement any Confidential Information of the other party (in
such capacity, the “disclosing party”). The receiving party may use Confidential
Information of the other party only to the extent required to accomplish the
purposes of this Agreement. The receiving party will use at least the same
standard of care as it uses to protect proprietary or confidential information
of its own (but not less than reasonable care) to ensure that its employees,
agents, consultants and other representatives do not disclose or make any
unauthorized use of the Confidential Information of the disclosing party. The
receiving party will promptly notify the disclosing party upon discovery of any
unauthorized use or disclosure of the Confidential Information of the disclosing
party. Without limiting the foregoing, the parties acknowledge that Vical
Know-How includes valuable trade secrets and that it is in the interests of both
parties to protect the confidentiality of the Vical Know-How; provided, that
nothing will limit or prevent Vical from using or disclosing the Vical Know-How
in connection with its discussions and activities outside the scope of the
exclusive license granted to Astellas hereunder with respect to Compounds and
Products in the Field in the Territory.

9.2 Exceptions. Confidential Information shall not include any information which
the receiving party can demonstrate by competent evidence: (a) is now, or
hereafter becomes, through no act or failure to act on the part of the receiving
party, generally known or available; (b) is known by the receiving party at the
time of receiving such information, as evidenced by its records; (c) is
hereafter furnished to the receiving party by a Third Party, as a matter of
right and without restriction on disclosure; or (d) is independently discovered
or developed by the receiving party without the use of Confidential Information
of the disclosing party.

9.3 Authorized Disclosure. The receiving party may disclose Confidential
Information of the disclosing party as expressly permitted by this Agreement or
if and to the extent such disclosure is reasonably necessary in the following
instances:

(a) prosecuting or defending litigation as permitted by this Agreement;

(b) complying with applicable court orders or governmental regulations;

(c) in the case of Astellas, conducting development manufacturing and/or
commercialization activities in accordance with the license granted in
Section 3.1, including making regulatory filings with respect to Products;

(d) in the case of Vical, as reasonably necessary to fulfill its obligations
under the CytRx Agreement; and

(e) disclosure to Affiliates, sublicensees, subcontractors, employees,
consultants, agents or other Third Parties who need to know such information for
the development, manufacture and commercialization of Products in accordance
with this Agreement or in connection with due diligence or similar
investigations by such Third Parties, and disclosure to potential Third Party
investors in confidential financing documents, provided,

 

***Confidential Treatment Requested

 

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in each case, that any such Affiliate, sublicensee, subcontractor, employee,
consultant, agent or Third Party agrees to be bound by similar terms of
confidentiality and non-use at least equivalent in scope to those set forth in
this Article 9.

Notwithstanding the foregoing, in the event the receiving party is required to
make a disclosure of the disclosing party’s Confidential Information pursuant to
Section 9.3(a) or (b), it will, except where impracticable, give reasonable
advance notice to the disclosing party of such disclosure and use efforts to
secure confidential treatment of such information at least as diligent as the
receiving party would use to protect its own confidential information, but in no
event less than reasonable efforts. In any event, the receiving party agrees to
take all reasonable action to avoid disclosure of Confidential Information of
the disclosing party.

9.4 Confidentiality of this Agreement and its Terms. Except as otherwise
provided in this Article 9, each party agrees not to disclose to any Third Party
the existence of this Agreement or the terms of this Agreement without the prior
written consent of the other party hereto, except that each party may disclose
the terms of this Agreement that are not otherwise made public as contemplated
by Section 9.5 as permitted under Section 9.3.

9.5 Public Announcements.

(a) Press Releases. As soon as practicable following the date hereof, the
parties shall each issue a mutually agreed press release announcing the
existence of this Agreement. Except as required by applicable laws and
regulations (including disclosure requirements of the U.S. Securities and
Exchange Commission (“SEC”) or any stock exchange on which securities issued by
a party or its Affiliates are traded), neither party shall make any other public
announcement concerning this Agreement or the subject matter hereof without the
prior written consent of the other, which shall not be unreasonably withheld or
delayed; provided that each party may make any public statement, including
statements in response to questions by the press, analysts, investors or those
attending industry conferences or financial analyst calls, or issue press
releases, so long as any such public statement or press release is not
inconsistent with prior public disclosures or public statements approved by the
other party pursuant to this Section 9.5 and which do not reveal non-public
information about the other party. For avoidance of doubt, Vical shall have the
right, without the prior written consent of Astellas, to announce events such as
achievement of milestones under this Agreement, and other events deemed material
by its General Counsel; provided, however, that Vical shall consult with
Astellas with regard thereto and provide reasonable opportunity for Astellas to
review such announcement in advance. In the event of a required public
announcement, to the extent practicable under the circumstances, the party
making such announcement shall provide the other party with a copy of the
proposed text of such announcement sufficiently in advance of the scheduled
release to afford such other party a reasonable opportunity to review and
comment upon the proposed text.

(b) Filing of Agreement. The parties will coordinate in advance with each other
in connection with the filing of this Agreement (including redaction of certain
provisions of this Agreement) with the SEC or any stock exchange or governmental
agency on which securities issued by a party or its Affiliate are traded, and
each party will use reasonable efforts to seek confidential treatment for the
terms proposed to be redacted; provided that each party will ultimately retain
control over what information to disclose to the SEC or any stock exchange

 

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or other governmental agency, as the case may be, and provided further that the
parties will use their reasonable efforts to file redacted versions with any
governing bodies which are consistent with redacted versions previously filed
with any other governing bodies. Other than such obligation, neither party (or
its Affiliates) will be obligated to consult with or obtain approval from the
other party with respect to any filings to the SEC or any stock exchange or
other governmental agency.

(c) Publications.

(i) Except as otherwise set forth in Section 9.5(c)(ii) below, at least […***…]
([…***…]) days prior to publishing, publicly presenting, and/or submitting for
written or oral publication a manuscript, abstract or the like that includes
Information relating to any Product in the Field that has not been previously
published, each party shall provide to the other party a draft copy thereof for
its review (unless such party is required by law to publish such Information
sooner, in which case such party shall provide such draft copy to the other
party as much in advance of such publication as possible). The publishing party
shall consider in good faith any comments provided by the other party during
such […***…] ([…***…]) day period. In addition, the publishing party shall, at
the other party’s reasonable request, remove therefrom any Confidential
Information of such other party, except each party shall have the right to
publicly disclose any information, including Confidential Information,
pertaining to safety or efficacy of the Product that such party believes in good
faith it is obligated by applicable law or appropriate to conform to applicable
regulatory requirements to disclose; provided that it shall delay publication
for a period not to exceed […***…] ([…***…]) days in order to allow the other
party to file for patent protection as permitted by this Agreement in relation
to its Confidential Information. The contribution of each party shall be noted
in all publications or presentations by acknowledgment or co-authorship, as
appropriate.

(ii) In the event Astellas desires to publish, publicly present, and/or submit
for written or oral publication a manuscript, abstract or the like that includes
Information relating to any Product in the Field but that does not include any
Confidential Information of Vical, Astellas shall provide to Vical a draft copy
thereof for its review prior to the date of such publication, presentation or
submission, and Astellas shall consider in good faith any comments provided by
Vical with respect thereto.

(iii) Astellas shall, within a reasonable amount of time after the Effective
Date and from time to time thereafter, provide to Vical a copy of its plan for
publication regarding Compounds and Products in the Field, including all
material updates and changes thereto.

9.6 Equitable Relief. Given the nature of the Confidential Information and the
competitive damage that would result to the disclosing party upon unauthorized
disclosure, use or transfer of its Confidential Information to any Third Party,
the parties agree that monetary damages may not be a sufficient remedy for any
breach of this Article 9. In addition to all other remedies, the disclosing
party shall be entitled to seek specific performance and injunctive and other
equitable relief as a remedy for any breach or threatened breach of this
Article 9.

 

***Confidential Treatment Requested

 

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10. TERM AND TERMINATION

10.1 Term. The term of this Agreement shall commence on the Effective Date and
continue in each country in the Territory until the expiration of the last
Royalty Term in such country, subject, in each case, to earlier termination
pursuant to Section 10.2 (the “Term”). On a Product-by-Product and
country-by-country basis upon expiration of the Royalty Term with respect to
such Product in such country […***…], the license and sublicense granted by
Vical to Astellas under Section 3.1 with respect to such Product in such country
shall remain in effect on a perpetual, fully paid-up and royalty-free basis,
subject to the limits set forth in Article 3.

10.2 Early Termination.

(a) Termination for Cause.

(i) A party shall have the right to terminate this Agreement upon written notice
to the other party if such other party is in material breach of this Agreement
and has not cured such breach within sixty (60) days (thirty (30) days with
respect to any payment breach) after written notice from the terminating party
requesting cure of such breach. Any such termination shall become effective at
the end of such sixty (60) day (thirty (30) day with respect to any payment
breach) period unless the breaching party has cured any such breach prior to the
end of such period. […***…].

(ii) A party shall have the right to terminate this Agreement upon written
notice to the other party upon the bankruptcy, dissolution or winding up of such
other party, or the making or seeking to make or arrange an assignment for the
benefit of creditors of such other party, or the initiation of proceedings in
voluntary or involuntary bankruptcy, or the appointment of a receiver or trustee
of such other party’s property that is not discharged within ninety (90) days.

(b) Other Astellas Termination Right. Astellas shall have the right to terminate
this Agreement on a country-by-country basis if Astellas reasonably determines
that further development and/or commercialization of Products in the Field in
such a country in the Territory will not be beneficial for Astellas for
scientific, regulatory, commercial, financial, ethical or other fair reasons
specified in reasonable detail in writing to Vical: (i) prior to completion of
the technology transfer of Vical Know-How relating to the manufacture of
Compounds and Products in the Field to Astellas or its designee, upon one
hundred eighty (180)

 

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days’ prior written notice to Vical, and (ii) thereafter, upon ninety (90) days’
prior written notice to Vical.

(c) Other Vical Termination Rights. Vical shall have the right to terminate this
Agreement immediately upon written notice to Astellas if Astellas or any of its
Affiliates or Sublicensees, directly or indirectly through any Third Party,
commences any interference or opposition proceeding with respect to, challenges
the validity or enforceability of, or opposes any extension of or the grant of a
supplementary protection certificate with respect to, any Vical Patent.

10.3 Effect of Termination or Expiration; Surviving Obligations.

(a) Effect of Any Termination. Upon any termination of this Agreement by either
party:

(i) all rights and obligations of the parties under this Agreement shall
terminate, except as provided in Sections 10.3, 10.4, 10.5 and, as applicable,
10.6;

(ii) Astellas shall perform its outstanding non-cancellable obligations with
respect to Products in the terminated country or in the Territory, as
applicable, that existed or accrued prior to the notice date of termination; and

(iii) Astellas shall cooperate with and provide reasonable assistance to Vical
with respect to any applications for Patent Term Extension, including providing
such information as may be requested by Vical or any Regulatory Authority in
support of such applications.

(b) Effect of Any Termination Other than Termination by Astellas for Cause. Upon
any termination of this Agreement by Astellas under Section 10.2(b) with respect
to any country or countries or any termination of this Agreement by Vical under
Section 10.2(a) or (c),

(i) if, at the time of such termination, there are any ongoing clinical trials
with respect to Products in the Field in the terminated country or in the
Territory, as applicable, the parties shall, at Vical’s option, negotiate in
good faith and adopt a plan to wind-down the development activities in an
orderly fashion or, at Vical’s election, promptly transition such development
activities to Vical or its designee, with due regard for patient safety and the
rights of any subjects that are participants in any clinical trials of the
Product and take any actions Vical deems reasonably necessary or appropriate to
avoid any human health or safety problems and in compliance with all applicable
laws, rules and regulations; and

(ii) Astellas shall, and hereby does, grant to Vical:

(1) the unrestricted right to use and refer to all Information, including all
data and regulatory documents, relating to any Compound or Product, in the
terminated country or countries and, if this Agreement is terminated in its
entirety, in the Territory and also outside the Territory upon any termination
of the U.S. Agreement;

 

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(2) an exclusive, royalty-free, perpetual, irrevocable license, with the right
to sublicense and further sublicense, under all Patents Controlled by Astellas
or its Affiliates that claim or cover a Compound or Product specifically or its
manufacture or use in the Territory, solely to research, develop, register, use,
make, have made, promote, sell, offer for sale, distribute, import and export
Compounds and Products in the Field in the terminated country or countries or,
if this Agreement is terminated in its entirety, in the Territory;

(3) a non-exclusive, royalty-free, perpetual, irrevocable license, with the
right to sublicense and further sublicense, under all Patents Controlled by
Astellas or its Affiliates other than those referenced in subsection (2) above,
which Patents would, but for the license granted in this subsection (3), be
infringed by the development, use, manufacture, promotion, sale, offer for sale,
distribution, import or export of a Compound or Product in the Field in the
applicable country or countries, solely to develop, use, make, have made,
promote, sell, offer for sale, distribute, import and export Compounds and
Products in the Field in the terminated country or countries or, if this
Agreement is terminated in its entirety, in the Territory; and

(4) take such other actions and execute such other instruments, assignments and
documents as may be necessary to effect the transfers of rights as set forth in
subsections (1), (2) and (3) above.

(c) Surviving Terms. Expiration or termination of this Agreement shall not
relieve the parties of any obligation accruing prior to such expiration or
termination. Without limiting the foregoing, the obligations and rights of the
parties under Sections 6.4 (for the period described therein), 7.1, 8.3, 8.4,
10.3, 10.4 and 10.5 and Articles 1, 9, 11 and 12 shall survive expiration or
termination of this Agreement.

(d) Return of Confidential Information. Within […***…] days following the
expiration or termination of this Agreement, each party shall deliver to the
other party or destroy any and all Confidential Information of the other party
in its possession, as per instruction by the party which owns such Confidential
Information. Notwithstanding the foregoing, in case that Astellas grants to
Vical right and license pursuant to Section 10.3(b), the party, which is
entitled to develop, manufacture and commercialize the Product after expiration
or termination of this Agreement, shall not be required to make delivery or
destruction pursuant to this Section 10.3(d).

10.4 Exercise of Right to Terminate. The use by either party hereto of a
termination right provided for under this Agreement shall not give rise to the
payment of damages or any other form of compensation or relief to the other
party with respect thereto.

10.5 Damages; Relief. Subject to Section 10.4 above, termination of this
Agreement shall not preclude either party from claiming any other damages,
compensation or relief that it may be entitled to upon such termination.

10.6 Rights in Bankruptcy. All rights and licenses granted under or pursuant to
this Agreement by a party are, and will otherwise be deemed to be, for purposes
of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to
“intellectual property” as defined under

 

***Confidential Treatment Requested

 

33

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Section 101 of the U.S. Bankruptcy Code. The parties agree that a party, as
licensee of such rights under this Agreement, will retain and may fully exercise
all of its rights and elections under the U.S. Bankruptcy Code. The parties
further agree that, in the event of the commencement of a bankruptcy proceeding
by or against the licensing party under the U.S. Bankruptcy Code, the licensee
will be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in its possession, will be
promptly delivered to it (a) upon any such commencement of a bankruptcy
proceeding upon its written request therefor, unless the licensing party elects
to continue to perform all of its obligations under this Agreement, or (b) if
not delivered under subsection (a) above, following the rejection of this
Agreement by or on behalf of the licensing party upon written request therefor
by the licensee.

 

11. INDEMNIFICATION

11.1 Indemnification by Vical. Vical hereby agrees to save, defend and hold
Astellas and its Affiliates and its and their respective directors, officers,
employees and agents (each, a “Astellas Indemnitee”) harmless from and against
any and all claims, suits, actions, demands, liabilities, expenses and/or loss,
including reasonable legal expense and attorneys’ fees (collectively, “Losses”),
to which any Astellas Indemnitee may become subject as a result of any claim,
demand, action or other proceeding by any Third Party to the extent such Losses
arise directly or indirectly out of (a) the gross negligence or willful
misconduct of any Vical Indemnitee with respect to any obligations or activities
contemplated by this Agreement, or (b) the breach by Vical of any warranty,
representation, covenant or agreement made by Vical in this Agreement; except,
in each case, to the extent such Losses result from the gross negligence or
willful misconduct of any Astellas Indemnitee or the breach by Astellas of any
warranty, representation, covenant or agreement made by Astellas in this
Agreement.

11.2 Indemnification by Astellas. Astellas hereby agrees to save, defend and
hold Vical and its Affiliates and its and their respective directors, officers,
employees and agents (each, a “Vical Indemnitee”) harmless from and against any
and all Losses to which any Vical Indemnitee may become subject as a result of
any claim, demand, action or other proceeding by any Third Party to the extent
such Losses arise directly or indirectly out of: (a) the development,
manufacture, use, handling, storage, sale or other disposition of any Product in
the Territory by Astellas or any of its Sublicensees, (b) the gross negligence
or willful misconduct of any Astellas Indemnitee with respect to any obligations
or activities contemplated by this Agreement, or (c) the breach by Astellas of
any warranty, representation, covenant or agreement made by Astellas in this
Agreement; except, in each case, to the extent such Losses result from the gross
negligence or willful misconduct of any Vical Indemnitee or the breach by Vical
of any warranty, representation, covenant or agreement made by Vical in this
Agreement.

11.3 Control of Defense. Any person entitled to indemnification under this
Article 11 shall give notice to the indemnifying party of any Losses that may be
subject to indemnification, promptly after learning of such Losses, and the
indemnifying party shall assume the defense of such Losses with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed by
the indemnifying party with counsel so selected, the indemnifying party will not
be subject to any liability for any settlement of such Losses made by the
indemnified party without its consent (but such consent will not be unreasonably
withheld or delayed), and will not be

 

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obligated to pay the fees and expenses of any separate counsel retained by the
indemnified party with respect to such Losses.

11.4 Insurance. Each party shall, at its own expense, procure and maintain
during the Term and for a period of three (3) years thereafter, insurance
policy/policies, including product liability insurance, adequate to cover its
obligations hereunder and which are consistent with normal business practices of
prudent companies similarly situated. Such insurance shall not be construed to
create a limit of a party’s liability with respect to its obligations hereunder
including the indemnification obligations under this Article 11. Each party
shall provide the other party with written evidence of such insurance or
self-insurance upon request. Each party shall provide the other party with
written notice at least thirty (30) days prior to the cancellation, non-renewal
or material change in such insurance self-insurance which could materially
adversely affect the rights of such other party hereunder.

 

12. GENERAL PROVISIONS

12.1 Standstill Agreement. For a period of […***…] ([…***…]) years following the
Effective Date (the “Standstill Period”), neither Astellas nor any of Astellas’
Representatives (as defined below) will, in any manner, directly or indirectly:

(a) make, effect, initiate, directly participate in or cause (i) any acquisition
of beneficial ownership of any securities of Vical or any securities of any
subsidiary or other Affiliate of Vical, if, after such acquisition, Astellas
would beneficially own more than […***…] percent ([…***…]%) of the outstanding
common stock of Vical, (ii) any acquisition of any assets of Vical or any assets
of any subsidiary or other Affiliate of Vical, (iii) any tender offer, exchange
offer, merger, business combination, recapitalization, restructuring,
liquidation, dissolution or extraordinary transaction involving Vical or any
subsidiary or other Affiliate of Vical, or involving any securities or assets of
Vical or any securities or assets of any subsidiary or other affiliate of Vical,
or (iv) any “solicitation” of “proxies” (as those terms are used in the proxy
rules of the Securities and Exchange Commission) or consents with respect to any
securities of Vical provided that nothing in this Section 12.1 shall preclude
any activities of Astellas or its Representatives with respect to the grant by
Vical or any Affiliate of Vical of any license, or the supply by Vical or any
subsidiary or other Affiliate of Vical of any products, in each case to Astellas
or any of its Affiliates as contemplated by this Agreement;

(b) form, join or participate in a group (within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended) with respect to the
beneficial ownership of any securities of Vical;

(c) act, alone or in concert with others, to seek to control the management,
board of directors or policies of Vical;

(d) take any action that might require Vical to make a public announcement
regarding any of the types of matters set forth in Section 12.1(a);

(e) agree or offer to take, or encourage or propose (publicly or otherwise) the
taking of, any action referred to in Section 12.1(a), (b), (c) or (d);

 

***Confidential Treatment Requested

 

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(f) assist, induce or encourage any Third Party to take any action of the type
referred to in Section 12.1(a), (b), (c), (d) or (e);

(g) enter into any discussions, negotiations, arrangement or agreement with any
Third Party relating to any of the foregoing; or

(h) request or propose that Vical or any of Vical’s Representatives amend, waive
or consider the amendment or waiver of any provision set forth in this
Section 12.1.

For purposes of this Agreement, a party’s “Representatives” will be deemed to
include each person or entity that is or becomes (i) an Affiliate of such party,
or (ii) an officer, director, employee, partner, attorney, advisor, accountant,
agent or representative of such party or of any of such party’s Affiliates,
providing such person is acting on behalf of such party.

Notwithstanding the foregoing, Section 12.1 shall no longer apply (i) during a
period commencing with Vical’s announcement in a filing with the Securities and
Exchange Commission or a press release that (a) it is seeking purchaser for
itself or (b) is otherwise exploring strategic options in this regard, and
ending with Vical’s announcement in a filing with the Securities and Exchange
Commission or a press release that is terminating such search or exploration;
(ii) during the period beginning with the commencement by a Third Party of a
publicly-announced tender or exchange offer for more than […***…] percent
([…***…]%) of voting power of the outstanding voting securities of Vical, and
ending with the termination by such Third Party of such tender or exchange
offer; or (iii) if Vical announces in a filing with the Securities and Exchange
Commission or a press release a transaction, or an intention to effect any
transaction, which would result in (a) the sale by Vical or one or more
Affiliate(s) of assets representing […***…] percent ([…***…]%) or more of the
consolidated assets of Vical; or (b) the common shareholders of Vical
immediately prior to such transaction owning less than […***…] percent
([…***…]%) of the outstanding common stock of the acquiring entity or, in case
of a merger transaction, the surviving corporation (or, if the surviving
corporation is an Affiliate of a parent company, the parent company); provide
that, in the case of clause (ii) Astellas has not directly or indirectly taken
any action prohibited under this Section 12.1.

The expiration of the Standstill Period will not terminate or otherwise affect
any of the other provisions of this Agreement.

12.2 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, excluding its
conflicts of laws principles with the exception of sections 5-1401 and 5-1402 of
New York General Obligations Law.

12.3 Dispute Resolution.

(a) Objective. The parties recognize that disputes as to matters arising under
or relating to this Agreement or either party’s rights and/or obligations
hereunder may arise from time to time. It is the objective of the parties to
establish procedures to facilitate the resolution of such disputes in an
expedient manner by mutual cooperation and without resort to litigation. To

 

***Confidential Treatment Requested

 

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accomplish this objective, the parties agree to follow the procedures set forth
in this Section 12.3 to resolve any such dispute if and when it arises.

(b) Resolution by Executives. Except as otherwise provided in Section 2.1, if an
unresolved dispute as to matters arising under or relating to this Agreement or
either party’s rights and/or obligations hereunder arises, either party may
refer such dispute to the Executives, who shall meet in person or by telephone
within ten (10) days after such referral to attempt in good faith to resolve
such dispute. If such matter cannot be resolved by discussion of the Executives
within ten (10) days following such meeting (as may be extended by mutual
written agreement), such dispute shall be resolved in accordance with
Section 12.3(c). For avoidance of doubt, any disputes, controversies or
differences arising from the JSC pursuant to Article 2 shall be resolved solely
in accordance with Section 2.1.

(c) Arbitration.

(i) If the parties do not resolve a dispute as provided in Section 12.3(b), and
a party wishes to pursue the matter, each such dispute that is not an “Excluded
Claim” shall be resolved by binding arbitration in accordance with the Rules of
Arbitration of the International Chamber of Commerce (“ICC”) as then in effect
(the “ICC Rules”), and judgment on the arbitration award may be entered in any
court having jurisdiction thereof. The decision rendered in any such arbitration
will be final and not appealable. If either party intends to commence binding
arbitration of such dispute, such party will provide written notice to the other
party informing the other party of such intention and the issues to be resolved.
Within thirty (30) days after the receipt of such notice, the other party may by
written notice to the party initiating binding arbitration, add additional
issues to be resolved.

(ii) The arbitration shall be conducted by a panel of three (3) arbitrators
experienced in the pharmaceutical business, none of whom shall be a current or
former employee or director, or a then-current stockholder, of either party,
their respective Affiliates or any Sublicensee. Within thirty (30) days after
receipt of the original notice of binding arbitration, each party shall select
one person to act as arbitrator and the two party-selected arbitrators shall
select a third arbitrator within ten (10) days of their appointment. If the
arbitrators selected by the parties are unable or fail to agree upon the third
arbitrator, the third arbitrator shall be appointed by the ICC in accordance
with the ICC Rules. The place of arbitration shall be New York, New York, and
all proceedings and communications shall be in English.

(iii) It is the intention of the parties that discovery, although permitted as
described herein, will be limited except in exceptional circumstances. The
arbitrators will permit such limited discovery necessary for an understanding of
any legitimate issue raised in the arbitration, including the production of
documents. No later than thirty (30) days after selection of the arbitrators,
the parties and their representatives shall hold a preliminary meeting with the
arbitrators, to mutually agree upon and thereafter follow procedures seeking to
assure that the arbitration will be concluded within six (6) months from such
meeting. Failing any such mutual agreement, the arbitrators will design and the
parties shall follow procedures to such effect.

 

37

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(iv) Either party may apply to the arbitrators for interim injunctive relief
until the arbitration award is rendered or the controversy is otherwise
resolved. Either party also may, without waiving any remedy under this
Agreement, seek from any court having jurisdiction any injunctive or provisional
relief necessary to protect the rights or property of that party pending the
arbitration award. The arbitrators shall have no authority to award punitive or
any other non-compensatory damages. The arbitrators shall have the power to
order that all or part of the legal or other costs incurred by a party in
connection with the arbitration be paid by the other party. Subject to the
preceding sentence, each party shall bear an equal share of the arbitrators’ and
any administrative fees of arbitration.

(v) Except to the extent necessary to confirm or enforce an award or as may be
required by applicable law, neither a party nor an arbitrator may disclose the
existence, content, or results of an arbitration without the prior written
consent of both parties. In no event shall an arbitration be initiated after the
date when commencement of a legal or equitable proceeding based on the dispute,
controversy or claim would be barred by the applicable New York statute of
limitations.

(vi) As used in this Section, the term “Excluded Claim” shall mean a dispute,
controversy or claim that concerns (A) the validity, enforceability or
infringement of a patent, trademark, copyright or regulatory data exclusivity;
or (B) any antitrust, anti-monopoly or competition law or regulation, whether or
not statutory.

12.4 Entire Agreement; Modification. This Agreement, including the Exhibits
hereto, is both a final expression of the parties’ agreement and a complete and
exclusive statement with respect to all of its terms. Except for the U.S.
Agreement, the Services Agreement and the separate letter agreement between the
parties, this Agreement supersedes all prior and contemporaneous agreements and
communications, whether oral, written or otherwise, concerning any and all
matters contained herein and therein, including the Confidentiality Agreement.
This Agreement may only be modified or supplemented in a writing expressly
stated for such purpose and signed by the parties to this Agreement.

12.5 Relationship Between the Parties. The parties’ relationship, as established
by this Agreement, is solely that of independent contractors. This Agreement
does not create any partnership, joint venture or similar business relationship
between the parties. Neither party is a legal representative of the other party,
and neither party can assume or create any obligation, representation, warranty
or guarantee, express or implied, on behalf of the other party for any purpose
whatsoever.

12.6 Non-Waiver. The failure of a party to insist upon strict performance of any
provision of this Agreement or to exercise any right arising out of this
Agreement shall neither impair that provision or right nor constitute a waiver
of that provision or right, in whole or in part, in that instance or in any
other instance. Any waiver by a party of a particular provision or right shall
be in writing, shall be as to a particular matter and, if applicable, for a
particular period of time and shall be signed by such party.

12.7 Assignment. Except as expressly provided hereunder, neither this Agreement
nor any rights or obligations hereunder may be assigned or otherwise transferred
by either party

 

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without the prior written consent of the other party (which consent shall not be
unreasonably withheld); provided, however, that either party may assign or
otherwise transfer this Agreement and its rights and obligations hereunder
without the other party’s consent:

(a) in connection with the transfer or sale of all or substantially all of the
business or assets of such party relating to products for control or prevention
of CMV infection to a Third Party, whether by merger, sale of stock, sale of
assets or otherwise (a “Sale”), provided that in the event of a Sale (whether
this Agreement is actually assigned or is assumed by the acquiring party by
operation of law (e.g., in the context of a reverse triangular merger)),
intellectual property rights of the acquiring party to such transaction (if
other than one of the parties to this Agreement) shall not be included in the
technology licensed hereunder; or

(b) to an Affiliate, provided that the assigning party shall remain liable and
responsible to the non-assigning party hereto for the performance and observance
of all such duties and obligations by such Affiliate.

The rights and obligations of the parties under this Agreement shall be binding
upon and inure to the benefit of the successors and permitted assigns of the
parties. Any assignment not in accordance with this Agreement shall be void.

12.8 No Third Party Beneficiaries. This Agreement is neither expressly nor
impliedly made for the benefit of any party other than those executing it,
except as otherwise provided in this Agreement with respect to Astellas
Indemnitees under Section 11.1 and Vical Indemnitees under Section 11.2.

12.9 Severability. If, for any reason, any part of this Agreement is adjudicated
invalid, unenforceable or illegal by a court of competent jurisdiction, such
adjudication shall not affect or impair, in whole or in part, the validity,
enforceability or legality of any remaining portions of this Agreement. All
remaining portions shall remain in full force and effect as if the original
Agreement had been executed without the invalidated, unenforceable or illegal
part.

12.10 Cumulative Remedies. No remedy referred to in this Agreement is intended
to be exclusive, but each shall be cumulative and in addition to any other
remedy referred to in this Agreement or otherwise available under law.

12.11 Notices. Any notice to be given under this Agreement must be in writing
and delivered either in person, by any method of mail (postage prepaid)
requiring return receipt, or by overnight courier or facsimile or electronic
mail (email) transmission confirmed thereafter by any of the foregoing, to the
party to be notified at its address(es) given below, or at any address such
party has previously designated by prior written notice to the other. Notice
shall be deemed sufficiently given for all purposes upon the earliest of:
(a) the date of actual receipt; (b) if mailed, five days after the date of
postmark; or (c) if delivered by overnight courier, the next business day the
overnight courier regularly makes deliveries.

 

39

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If to Astellas, notices must be addressed to:

Astellas Pharma Inc.

3-11, Nihonbashi-Honcho 2-chome

Chuo-Ku, Tokyo 103-8411

Japan

Attention: Vice President, Legal

Facsimile: […***…]

With a copy to:

Astellas Pharma Inc.

3-11, Nihonbashi-Honcho 2-chome

Chuo-Ku, Tokyo 103-8411

Japan

Attention: Vice President, Licensing and Alliances

Facsimile: […***…]

If to Vical, notices must be addressed to:

Vical Incorporated

10390 Pacific Center Court

San Diego, California 92121

USA

Attention: Business Development

Facsimile: (858) 646-1150

Email: licensing@vical.com

With a copy to:

Cooley LLP

4401 Eastgate Mall

San Diego, California 92121

USA

Attention: […***…]

Telephone: (858) 550-6000

Facsimile: (858) 550-6420

Email: […***…]

12.12 Force Majeure. Except for the obligation to make payment when due, each
party shall be excused from liability for the failure or delay in performance of
any obligation under this Agreement by reason of any event beyond such party’s
reasonable control including but not limited to Acts of God, fire, flood,
explosion, earthquake, or other natural forces, war, civil unrest, accident,
destruction or other casualty, any lack or failure of transportation facilities,
any lack or failure of supply of raw materials, any strike or labor disturbance,
or any other event

 

***Confidential Treatment Requested

 

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similar to those enumerated above. Such excuse from liability shall be effective
only to the extent and duration of the event(s) causing the failure or delay in
performance and provided that the party has not caused such event(s) to occur.
Notice of a party’s failure or delay in performance due to force majeure must be
given to the other party within ten (10) days after its occurrence. All delivery
dates under this Agreement that have been affected by force majeure shall be
tolled for the duration of such force majeure. In no event shall any party be
required to prevent or settle any labor disturbance or dispute.

12.13 Interpretation.

(a) Captions & Headings. The captions and headings of clauses contained in this
Agreement preceding the text of the articles, sections, subsections and
paragraphs hereof are inserted solely for convenience and ease of reference only
and shall not constitute any part of this Agreement, or have any effect on its
interpretation or construction.

(b) Interpretation. All references in this Agreement to the word “including”
shall be deemed to be followed by the phrase “without limitation” or like
expression. All references in this Agreement to the singular shall include the
plural where applicable, and all references to gender shall include both genders
and the neuter.

(c) Articles, Sections & Subsections. Unless otherwise specified, references in
this Agreement to any article shall include all sections, subsections, and
paragraphs in such article; references in this Agreement to any section shall
include all subsections and paragraphs in such sections; and references in this
Agreement to any subsection shall include all paragraphs in such subsection.

(d) Days. All references to days in this Agreement shall mean calendar days,
unless otherwise specified.

(e) Ambiguities. Ambiguities and uncertainties in this Agreement, if any, shall
not be interpreted against either party, irrespective of which party may be
deemed to have caused the ambiguity or uncertainty to exist.

(f) English Language. This Agreement has been prepared in the English language
and the English language shall control its interpretation. In addition, all
notices required or permitted to be given hereunder, and all written,
electronic, oral or other communications between the parties regarding this
Agreement shall be in the English language.

12.14 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original document, and all of which, together
with this writing, shall be deemed one instrument. Signatures provided by
facsimile transmission or in Adobe™ Portable Document Format (PDF) sent by
electronic mail shall be deemed to be original signatures.

12.15 HSR Filing. Each of Vical and Astellas agrees to prepare and make
appropriate filings under the Hart-Scott-Rodino Anti-Trust Improvements Act of
1976, as amended (the “HSR Act”) and any analogous foreign laws and regulations,
relating to this Agreement and the

 

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transactions contemplated hereby as soon as reasonably practicable, but in any
event within ten (10) days after the date of execution of this Agreement (the
“HSR Filing Date”). The parties agree to cooperate in the antitrust clearance
process and to furnish promptly to the Federal Trade Commission, the Antitrust
Division of the Department of Justice and any other agency or authority, any
information reasonably requested by them in connection with such filings. Other
than the provisions of this Section 12.15, the rights and obligations of the
parties under this Agreement shall not become effective until the waiting period
provided by the HSR Act shall have terminated or expired without any action by
any governmental agency or challenge to the transaction (the date of such
termination or expiration shall be the “Effective Date” of this Agreement). Upon
the occurrence of the Effective Date, all provisions of this Agreement shall
become effective automatically without the need for further action by the
parties. In the event that antitrust clearance from the Federal Trade Commission
and Antitrust Division of the Department of Justice is not obtained within
ninety (90) days after the date of execution of this Agreement (or such later
date as agreed in writing by the parties), this Agreement may be terminated by
either party.

[Remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Ex-U.S. LICENSE
AGREEMENT as of the date set forth below.

 

VICAL INCORPORATED     ASTELLAS PHARMA INC. By:  

 

    By:  

 

Name: Vijay B. Samant     Name: Yoshihiko Hatanaka Title: President and CEO    
Title: President and CEO Date: July     , 2011     Date: July     , 2011

SIGNATURE PAGE TO U.S. LICENSE AGREEMENT

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

EXHIBIT A

Vical Patents in the Territory

Vical Primary Patents

 

  1. […***…]

 

  a. […***…]

 

  b. […***…]

 

  c. […***…]

 

  2. […***…]

 

  3. […***…]

 

  4. […***…]

 

  a. […***…]

 

  b. […***…]

 

  c. […***…]

 

  d. […***…]

 

  e. […***…]

 

  f. […***…]

 

  g. […***…]

 

  h. […***…]

 

  i. […***…]

 

  j. […***…]

 

  k. […***…]

 

  l. […***…]

 

  m. […***…]

 

  n. […***…]

 

  o. […***…]

 

  p. […***…]

 

  5. […***…]

 

***Confidential Treatment Requested

 

A-1

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

Vical Patents

 

  1. […***…]

 

  a. […***…]

 

  b. […***…]

 

  c. […***…]

 

  2. […***…]

 

  3. […***…]

 

  4. […***…]

 

  a. […***…]

 

  b. […***…]

 

  c. […***…]

 

  d. […***…]

 

  e. […***…]

 

  f. […***…]

 

  g. […***…]

 

  h. […***…]

 

  i. […***…]

 

  j. […***…]

 

  k. […***…]

 

  l. […***…]

 

  m. […***…]

 

  n. […***…]

 

  o. […***…]

 

  p. […***…]

 

  5. […***…]

 

  6. […***…]

 

  7. […***…]

 

  a. […***…]

 

  b. […***…]

 

***Confidential Treatment Requested

 

A-2

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  c. […***…]

 

  d. […***…]

 

  e. […***…]

 

  f. […***…]

 

  g. […***…]

 

  h. […***…]

 

  i. […***…]

 

  j. […***…]

 

  k. […***…]

 

  l. […***…]

 

  m. […***…]

 

  8. […***…]

 

***Confidential Treatment Requested

 

A-3