Document:

Exclusive License Agreement

 Exhibit 10.4 
 *** 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) 

EXCLUSIVE LICENSE AGREEMENT 

THIS LICENSE AGREEMENT (the “Agreement”) is made by and between City of Hope, a California nonprofit public benefit corporation located at 1500
East Duarte Road, Duarte, California 91010 (“COH”) and Vical Incorporated, a Delaware corporation, located at 9373 Towne Centre Drive, Suite 100, San Diego, California 92121-3088 (“VICAL”). 

A. COH operates an academic research and medical center that encourages the use of its inventions, discoveries and intellectual property for the best
interests of the public. COH has developed, and subject to the rights reserved by the United States Government, owns right, title, and interest in United States Patents No. 6,242,567 entitled “Method for detection and prevention of human
cytomegalovirus infection,” and 6,133,433 entitled “Method for detection and prevention of human cytomegalovirus infection,” and certain other “Patent Rights” defined below. COH desires to have VICAL develop, market and
exploit the Patent Rights into commercial products for the benefit of the public. 
 B. VICAL desires to acquire from COH certain licenses under
the Patent Rights subject to the terms and conditions set forth below. 
 THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows: 
  

	1.	DEFINITIONS  

  

	1.1	Affiliated Companies. “Affiliated Companies” or “Affiliates” means each and any subsidiary, parent, closely-held or other corporation,
partnership, limited liability company, or other legal entity in which a Patty owns or controls fifty percent (50%) or more of any such entity’s stock, voting securities or other right to elect or control management, or where any such
entity owns or controls, fifty percent (50%) or more of a Party’s stock, voting securities or other right to elect or control management. 

  

	1.2	 Confidential Information. “Confidential Information” means all terms in this Agreement, including royalty and other payments, sales
information, annual reports provided under this Agreement, 

  
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materials relating to pending patent applications, and any business or technical information disclosed by one of the Parties to the other Party in writing and marked “confidential,”
whether or not patentable, copyrightable, or otherwise protected by law. Notwithstanding the foregoing, Confidential Information will not include, and nothing in Section 17 will in any way restrict the rights of either COH or VICAL to use,
disclose, or otherwise deal with any information that: (i) was in the public domain as of the Effective Date or comes into the public domain during the term of this Agreement through no act of the receiving Party; (ii) was independently
known to the receiving Party prior to receipt from the disclosing Party, or made available to the receiving Party as a matter of lawful right by a third party; (iii) is independently conceived, invented, or acquired by the receiving Party by
persons who were not exposed to the information; or (iv) information that is required to be disclosed by law, court order, or other legal process. 

  

	1.3	Designee. “Designee” means any corporation or other entity that is employed by VICAL or otherwise under contract with VICAL to make, use, sell,
promote, distribute, market, import, or export Licensed Products on behalf of or in partnership or other association with VICAL. 

  

	1.4	Effective Date. “Effective Date” means February 3, 2003. 

 

	1.5	Field. “Field” means all recombinant CMV vaccines containing or encoding molecules larger than fifty (50) amino acids, including DNA-based,
viral-based and recombinant protein-based vaccines, and excludes diagnostics. 

  

	1.6	Improvement. “Improvement” means an improvement to an invention claimed in the Patent Rights that, absent a license, cannot be practiced without
infringing a Valid Claim. For avoidance of doubt, Improvement does not mean or include developments that are useful in practicing the Patent Rights, but which may be practiced, absent a license, without infringing a Valid Claim.

  

	1.7	 License Year. “License Year” means the period from the Effective Date through December 31, 2003 (the “First License
Year”) and each twelve-month period thereafter from January 1st through December 31st. 

  

	1.8	 Licensed Products. “Licensed Products” means vaccines, the manufacture, development, use,

  
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offering to sell, sale, or import of which, but for the license granted herein, would infringe a Valid Claim. Licensed Products do not include diagnostics. 

 

	1.9	Net Invoice Price. “Net Invoice Price” means the amount invoiced, billed, or received by or on behalf of VICAL, its Affiliated Companies, or their
Designees on account of the sale, transfer or other disposition of Licensed Products to Third Parties in any arms-length transaction, less reasonable, customary and documented deductions applicable to the Licensed Products for any of the following:

  

	 	(a)	trade, quantity and cash discounts actually granted to customers, not in excess of the selling price of the Licensed Product; 

 

	 	(b)	discounts, refunds, rebates, charge backs, and retroactive price adjustments; 

 

	 	(c)	actual product returns and allowances; and 

  

	 	(d)	any tax imposed on the production, sale, delivery or use of the product actually paid. 

If VICAL combines with a Licensed Product one or more vaccines (a “Combination Product”) and these vaccines, if sold separately,
would not be a Licensed Product, the Net Invoice Price of the Licensed Product shall be calculated on a country-by-country basis using the following formula: the Net Invoice Price of the Combination Product shall be multiplied by the fraction
A/(A+B) where A is the average sales price of the Licensed Product charged in the country of the sale during the preceding three-months when sold separately and B is the average sales price charged for all other vaccines included in the Combination
Product for which the Combination Product is marketed and sold in that same country during the same period when sold separately. In the event that the Licensed Product or other vaccines are not sold separately, Net Invoice Price of the Licensed
Product shall be calculated by multiplying the Net Invoice Price of the Combination Product by the fraction C/(C+D) where C is the average cost of the Licensed Product to the selling party during the quarter of sale and D is the average cost of the
other vaccines to the selling party during the same quarter. For purposes of this calculation, “cost” shall mean the cost of acquisition, if purchased, or the cost of manufacture, the latter being the sum of direct manufacturing costs

  
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determined in accordance with generally accepted accounting principles. If this latter formula (C/C+D) is used to calculate Net Invoice Price, the Net Invoice Price of the Licensed Product shall
be no less than the Net Invoice Price of the Combination product multiplied by the fraction having a numerator of 1 and a denominator equal to the total number of vaccines for which the Combination Product is marketed and sold. For example, if the
Combination Product contains three such vaccines, the Net Invoice Price of the Licensed Product shall be no less than 1/3 of the Net Invoice Price of the Combination Product. 

 

	1.10	Party. “Party” means COH or VICAL. 

  

	1.11	Patent Rights. “Patent Rights” means, collectively, all right, title and interest of COH in, to and under (i) United States Patents Nos.
6,242,567, entitled “Method for detection and prevention of human cytomegalovirus infection” and 6,133,433, entitled “Method for detection and prevention of human cytomegalovirus infection,” (ii) all foreign counterparts of
United States Patents Nos. 6,242,567 and 6,133,433; and (iii) any continuations-in-part, continuations, continued prosecution applications, divisionals, reexaminations reissues, or patent term extension patents claiming substantially the same
technology as United States Patents Nos. 6,242,567 and 6,133,433. 

  

	1.12	Quarter. “Quarter” means each calendar quarter (i.e., ending March 31, June 30, September 30, and December 31), or
portion thereof, during the term of this Agreement. 

  

	1.13	Territory. “Territory” means the entire world. 

  

	1.14	Third Parties. “Third Parties” means a third party that is not COH, VICAL, any of their Affiliated Companies, or Designees. 

 

	1.15	Valid Claim. “Valid Claim” means an unexpired claim of an issued patent of the Patent Rights which has not been held unenforceable, unpatentable, or
invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealed within the time allowed for appeal or unappealable. 

  

	2.	LICENSE OF PATENT RIGHTS  

  
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	2.1	License Grant. Subject to the rights retained by COH in Sections 2.2 and 2.3, below, COH hereby grants to VICAL and VICAL hereby accepts from COH, to the extent
that each lawfully may do so, an exclusive, royalty-bearing right and license under the Patent Rights to make, have made, offer to sell, sell, use and import Licensed Products in the Field. No other license or rights under the Patent Rights or any
other intellectual property of COH is granted or intended to be granted under this Agreement, either expressly, by implication, estoppel, or otherwise. 

  

	2.2	Ownership of Intellectual Property; Rights Retained by COH  

  

	 	(a)	COH shall retain all right, title, and interest in, to and under the Patent Rights except for the rights explicitly granted to VICAL in accordance with this Agreement.

  

	 	(b)	Except for the rights explicitly granted to COH in accordance with this Agreement, including Section 2.2 (c) and (e), and 2.3 below, COH shall have no right
(i) to make, have made, use, sell, offer for sale, or import Licensed Products or (ii) to grant others any right or license to do the same; provided, however, that nothing in this Agreement shall prohibit COH from making, having made, or
using Licensed Products, in connection with its internal, non-commercial research, clinical, and teaching programs. Nothing in this Section 2.2(b) is intended to grant to COH any right to vaccines manufactured by or on behalf of Vical.

  

	 	(c)	COH shall retain the exclusive right during the term of this Agreement (i) to make, have made, use, sell, offer for sale, import and otherwise exploit any products
or methods covered by the Patent Rights (including but not limited to products identical to Licensed Products) outside the Field; and (ii) to license or otherwise exploit any and/or all of those retained Patent Rights. 

 

	 	(d)	Upon termination of this Agreement, all rights granted under this Agreement shall revert to COH. 

 

	 	(e)	 The rights granted by COH to VICAL under Section 2.1 shall become non-exclusive, at the option of COH, if: (i) VICAL fails to perform in any
material respect a material term, 

  
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condition or obligation required under this Agreement, and VICAL does not cure that failure to perform within thirty (30) days after written notice by COH to VICAL; or (ii) VICAL makes
any material misrepresentation during the negotiations of this agreement or in any document or other disclosure or representation required under the Agreement. Each and every Section of this Agreement shall be considered a material provision unless
the Parties agree otherwise in writing signed by authorized representatives of both Parties. COH’s rights under this Section 2.2(e) shall be in addition to any other rights and remedies it may have under this Agreement or at law or equity.

  

	2.3	Sublicenses  

  

	 	(a)	VICAL shall have the right to sublicense non-exclusively the rights and/or licenses granted by COH to VICAL under Section 2.1; provided, however, that:
(i) the sublicensee shall have no further right to grant sublicenses; (ii) the terms of any sublicense shall not be inconsistent with the terms of this Agreement; and (iii) VICAL promptly shall provide COH with a copy of each final
sublicense agreement within ten (10) days after execution. VICAL shall remain liable to COH for all obligations under this Agreement, including, without limitation, payment to COH of any amounts due on account of sales, transfers or other
dispositions of Licensed Products by sublicensees. In addition, COH shall be deemed a third-party beneficiary of any sublicense agreement with the right to enforce the same. VICAL shall have the right to sublicense only while it is the exclusive
licensee of the Patent Rights, and any sublicense shall be subject to the termination and assignment rights of COH under Section 2.3(b) below. 

  

	 	(b)	 VICAL shall have the right to enter into an exclusive agreement with a Third Party with which VICAL collaborates in the normal course of business for
the manufacture, marketing, and sale of Licensed Products in the Field (a “Collaboration Agreement”); provided, however, that: (i) the Third Party shall have no right to grant licenses; (ii) the terms of any Collaboration
Agreement shall not be inconsistent with the terms of this Agreement; (iii) VICAL shall provide COH with a copy of each final Collaboration Agreement within ten (10) days following execution; and (iv) the Third Party shall not be
authorized to manufacture, market, or sell Licensed Products or practice any of the Patent 

  
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Rights independent of the Collaboration Agreement. 

  

	 	(c)	If COH exercises its rights under Sections 2.2(e) or 4.2, all rights of VI CAL under this Section 2.3 shall terminate. Any sublicense shall, at COH’s option,
terminate or shall be assigned to COH; provided, however, that COH shall not assume any obligations or liabilities owed by VICAL prior to any such assignment. 

 

	2.4	Commercial Efforts  

  

	 	(a)	VICAL shall use diligent efforts to effect introduction of Licensed Products into the commercial market as soon as practicable, consistent with sound and reasonable
business practice and judgment; thereafter, until the expiration of this Agreement, VICAL, consistent with sound and reasonable business practice and judgment, shall use diligent efforts to keep Licensed Products reasonably available to the public.

  

	 	(b)	COH may terminate or render this license non-exclusive if VICAL fails materially to meet its obligations under Section 2.4(a), above. 

 

	2.5	Progress Reports. Commencing with the end of the First License Year, and at the end of each License Year thereafter, VICAL shall deliver to COH within fifteen
(15) days of the end of the License Year, a written report setting forth a summary of the activities undertaken by VICAL in connection with the research, development, regulatory approval, manufacturing, testing, promotion, sale, and
distribution of the Licensed Products during the preceding License Year and activities which VICAL proposes to undertake during the subsequent License Year. The report will include the date of first sale of each Licensed Product.

  

	2.6	 Rights of the United States Government. VICAL hereby acknowledges that the research which resulted in the Patent Rights was funded in part by
the government of the United States of America, and accordingly, the rights and license granted by COH to VICAL are subject to certain statutes and the rights, claims, and limitations granted to the government of the United States of America as set
forth at 35 U.S.C. § 200 et seq., and 37 C.F.R. Section 401 et seq., or similar regulations of any competent governmental authority. This Agreement shall be subject to modifications to conform to

  
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the requirements of those statutes and regulations. 

  

	3.	COMPENSATION  

  

	3.1	Amount  

  

	 	(a)	VICAL shall pay to COH within five (5) business days of the Effective Date a one-time up front license fee in the amount of [...***...]. This payment is
nonrefundable and separate from and not an advance or credit against any other amount payable by VICAL to COH under this Agreement. 

  

	 	(b)	VICAL shall pay to COH [...***...] of the Net Invoice Price of all Licensed Products sold, transferred or otherwise disposed of by or on behalf of VICAL,
Affiliated Companies, or their Designees. 

  

	 	(c)	In the event that VICAL grants a sublicense that includes rights under any of the Patent Rights or enters into a Collaboration Agreement, in addition to any royalties
or other amounts payable to COH pursuant to (b) above, COH shall be entitled to [...***...] of any royalties, fees, milestone payments, or other consideration (including non-cash consideration) VICAL receives under the sublicense or
Collaboration Agreement. Provided, however, in no event shall COH receive less than the amount that would be due COH under Section 3.1 (b) had the sale of products by the sublicensee under the sublicense, or by a Third Party under the
Collaboration Agreement, been a sale by VICAL of a Licensed Product (i.e., [...***...]). The obligations in this section apply regardless of whether a sublicense or Collaboration Agreement includes a license to rights in addition to the Patent
Rights. 

  

	 	(d)	No royalty shall be paid on sales or other transfers of Licensed Products to or between VICAL, Affiliated Companies, and Designees intended for further sale or
transfer. Royalties on these sales or transfers shall become due upon the further sale or transfer to Third Parties. 

  

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	 	(e)	Amounts due COH under Sections 3. 1 (b)-(d) accrue as follows: for sale, transfer or other disposition of Licensed Products under Section 3 .1 (b), upon the
date of invoice or other transfer; for all other amounts due COH, sixty (60) days after the fee, royalty, or other consideration described above is due and payable to VICAL or its Affiliates. For each unit of Licensed Product, the royalty shall
be payable only once regardless of the number of claims contained in the Patent Rights which apply to that Licensed Product. 

  

	 	(f)	License maintenance fees in the amounts set forth below will be due under this Section 3.1(f) within thirty (30) days of the end of the relevant License Year,
as follows: 

 For the License Years prior to VICAL’s first commercial sale of a licensed product in which VICAL is actively
conducting a clinical trial, License maintenance fees shall be: 
  

					
	 First License Year
	  	$	[...***...]	  
		
	 Year 1
	  	$	[...***...]	  
		
	 Year 2
	  	$	[...***...]	  
		
	 Year 3
	  	$	[...***...]	  
		
	 Year 5 and thereafter
	  	$	[...***...]	  

 The following additional fees shall be added to the amounts set forth above for the License Years prior to VICAL’s
first commercial sale of a Licensed Product in which VICAL is not actively conducting a clinical trial: 
  

					
	 First License Year
	  	$	[...***...]	  
		
	 Year 1
	  	$	[...***...]	  
		
	 Year 2
	  	$	[...***...]	  
		
	 Year 3
	  	$	[...***...]	  

  

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 For the License Year in which the first commercial sale occurs and the License Years thereafter, License
maintenance fees shall be: 
  

					
	 Year of first commercial sale
	  	 	[...***...]	  
		
	 License Years following License
	  			
		
	 Year of first commercial sale
	  	$	[...***...]	  

 The License maintenance fees set forth in this Section 3 .1 (e) may be credited against the royalties described
under Section 3.1(b), above. For each License Year, the License maintenance fee due for that License Year shall be credited only against royalties earned and payable during the immediately following License Year. No payment shall be carried
forward or credited against royalties earned or payable in any other period or credited against any other amounts due. 
  

	3.2	Adjustment to Royalties  

In the event that VICAL is required to pay royalties in order to obtain licenses to patents other than the Patent Rights without which
VICAL could not lawfully make, use, sell, offer to sell or import Licensed Products as contemplated in this Agreement (“Required Other Royalties”), then the following provisions shall apply: 

 

	 	(a)	Subject to the requirements of (c)-(e) below, COH, on request by VICAL will reduce the royalty rate under Sections 3.1(b) by a maximum reduction [...***...]
(i.e., to a rate not lower than [...***...]); 

  

	 	(b)	The reduction authorized by (a), above, shall apply only to the extent that the royalties payable to COH under Section 3 .1 (b), combined with all Required Other
Royalties in the aggregate, both before and after the application of (a), exceed [...***...] of the average Net Invoice Price of Licensed Product; 

  

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	 	(c)	The reductions authorized by (a), above, shall apply only if all other parties to which VICAL pays Required Other Royalties have agreed to reduce their royalty payments
from VICAL by a percentage amount that is equal to or greater than the reduction COH makes to its royalty payment under (a), above. By way of example, if COH’s royalty rate is reduced by [...***...], the royalty VICAL pays COH will be
reduced by [...***...]. Before a [...***...] reduction in the royalty rate can be applied to COH, all other parties first must agree to reduce the royalty they are to be paid by at least the same [...***...]. This subsection
(c) shall exclude Vical’s existing license with the Wisconsin Alumni Research Foundation for United States patent application serial nos. 07/467,881, 07/326,305 and 07/496,991, and any reexaminations, reissues, and extensions thereof, and
any equivalents thereto (including foreign equivalents), and any United States or foreign patents which may issue from such patent applications and continuations, CIP applications or divisionals thereof, and any reexaminations, reissues, and
extensions thereof including any foreign equivalents thereto. 

  

	 	(d)	In no case shall the operative royalty rate payable to COH under Section 3.1(b), after all reductions permitted by (a), above, be less than the largest percentage
royalty paid by VICAL to any Third Party on account of sale, transfer or other disposition of Licensed Products; and 

  

	 	(e)	If VICAL wishes to exercise its right to reduce royalty rates under this Section 3.2, it must provide COH with advance written notice and provide COH, along with
each Quarterly statement required under Section 3.3(a), a written certification of the amount of royalties actually paid to Third Parties in that Quarter, the amount of any reduction in royalty rates claimed by VICAL for that Quarter, and the
basis for VICAL’s calculation thereof. 

  

	3.3	Payment 

  

	 	(a)	 Within thirty (30) days of the end of each License Year until the total, cumulative Net Invoice Price exceeds $[...***...], VICAL shall
deliver to COH payment of all royalties, fees or other amounts due COH that accrued during that License Year, together with a written statement setting forth the following information: (i) the number and price of

  

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Licensed Products sold, transferred or otherwise disposed of by or on behalf of VICAL by product and country of sale, specifically identifying any sales to Affiliates; (ii) the applicable
Net Invoice Price(s); (iii) all amounts received from sublicensees, including those which would give rise to royalties under 3.1 (c) above; (iv) an itemization and calculation of the amount of royalties and other fees and
consideration due COH, including any deductions from gross sales or other adjustments; (v) the application of any credit for License maintenance fees paid pursuant to Section 3 .1 (e); and (vi) any additional information reasonably
necessary to enable COH to understand the basis of and confirm these calculations, including without limitation, the status of any clinical trial including Licensed Product. Once the total, cumulative Net Invoice Price exceeds $[...***...],
VICAL’s obligations under this Section 3.3 shall be performed within thirty (30) days of the end of each Quarter for the duration of this Agreement. 

 

	 	(b)	All royalties, fees or other payments due COH under Section 3.1 shall be paid in United States dollars. If the amount of any royalty, fee or payment is calculated,
in whole or in part, based on amounts stated in a currency other than United States dollars, prior to making the royalty calculation the foreign currency shall be converted into United States dollars using the foreign exchange rate published by The
Wall Street Journal on the last business day of the Quarter during which the royalty, fee or other payment accrued. 

  

	 	(c)	Unless otherwise specified, all payments due under this Agreement will be due thirty (30) days following the end of the relevant License Year or Quarter, as
provided in 3.3.(a), above. If any payment required under this Agreement is not paid when due, it shall bear interest from the due date until paid at the lesser of twelve percent (12%) per annum or the maximum rate allowable by law.

  

	3.4	 Books and Records. VICAL shall make available at its principal place of business in California or another mutually agreeable location in
California true and complete books of account, records, royalty statements, invoices, and other data containing all particulars reasonably necessary for an independent determination of the royalties, fees and other amounts payable by VICAL to COH
under this Agreement (“Records”). The Records for each License Year shall be maintained for a period of five (5) years after the end of that License Year or five (5) years after the information

  

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contained in those Records first was provided to COH, whichever is later. COH’s accountants, financial officers, technology development and transfer officers, attorneys, and outside
Certified Public Accountants as chosen by COH, shall have the right to audit, inspect, copy, and make extracts from all Records to the extent necessary to verify the accuracy of any payments made and statements furnished to COH. COH may exercise
this right during normal business hours on three (3) business days prior written notice once per License Year. If any Records requested by COH are not immediately available, VICAL shall make them available within five (5) business days of
the request. In the event any examination by COH discloses an underpayment to COH, VICAL shall pay to COH the amount of any underpayment together with interest as set forth at Section 3.3( c) within ten (10) days of VICAL’ s receipt
of a written notice describing the findings. In the event the examination reveals that the amount of any underpayment for any Quarter exceeds five percent (5%) of the royalties and fees actually paid by VICAL to COH, VICAL shall also reimburse
COH, in addition to the royalties, fees and applicable interest, all of COH’s reasonable and documented costs and expenses, including, but not limited to, all professional fees directly related to any such examination or subsequent resolution.
All information obtained by COH as a result of auditing activities performed under this Section 3.3 will be considered VICAL’s Confidential Information. 

 

	4.	TERM AND TERMINATION  

  

	4.1	Term. The term of this Agreement shall commence on the Effective Date and expire upon the expiration date of the last to expire of the Patent Rights, unless
otherwise terminated pursuant to Section 4.2. 

  

	4.2	Termination. This Agreement may be terminated prior to its expiration in accordance with Section 4.1 upon the happening of any of the following events:

  

	 	(a)	At the option of either Party, if the other Party shall fail to perform in any material respect a material term, condition or obligation under this Agreement and that
failure is not cured within thirty (30) days after written notice of the failure by the terminating Party is received by the other Party; 

  

	 	(b)	 At the option of either Party, if the other Patty made any material misrepresentation during

  
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the negotiation of this Agreement, or in any document or other disclosure or representation required under this Agreement; 

 

	 	(c)	At the option of VICAL, after the end of the third License Year, upon ninety (90) days prior written notice. The License maintenance fee due for the License Year
in which the Agreement is terminated under this Section 4.2(c) is non-refundable, and all other payments shall be due and payable on the thirtieth (30) day after termination (120 days following the written notice), if not otherwise due
earlier pursuant to the terms of this Agreement; 

  

	 	(d)	Immediately and without any notice or other act by COH, if VICAL seeks to dissolve, liquidate its assets, or windup its business; or if VICAL ceases to do business in
the ordinary course; 

  

	 	(e)	Immediately and without any notice or other act by COH, if VICAL shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other similar law now in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its
property; 

  

	 	(f)	Immediately and without any notice or other act by COH, if an involuntary case or other proceeding shall be commenced against VICAL seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its
property, and such involuntary case remains unstayed and in effect for more than sixty (60) days; or 

  

	 	(g)	Immediately and without any notice or other act by COH, if VICAL has not yet provided COH with written notice by the end of the fourth License Year that VICAL is
actively engaged in a clinical trial involving a Licensed Product. 

  

	4.3	 Duties Upon Termination. Upon the termination of this Agreement, VICAL shall immediately

  
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cease to make, have made, offer to sell, sell, use, or import Licensed Products. VICAL shall pay to COH, within thirty (30) days of termination, all royalties, fees, and other payments
accrued under this Agreement. Any cause of action, claim or liability of COH or VICAL accrued or to accrue due to any breach, omission, obligation or other duty owed to the other Party shall survive termination. 

 

	5.	REPRESENTATIONS AND WARRANTIES  

 COH and VICAL each hereby represents and warrants to the other Party that: (1) it is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation;
(2) it has the right and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereunder; (3) this Agreement is a legal, valid and binding agreement of the Party and enforceable against it;
(4) the execution and delivery of this Agreement will not breach any governing instrument or agreement of the Party or, to each Party’s knowledge, any statute, regulation or any other restriction upon the Party; and, (5) it has
secured all requisite authorizations and approvals necessary to the execution, delivery and performance of this Agreement. 

VICAL further represents that it has the ability, desire and intent to exploit the Patent Rights into commercial products consistent with
sound and reasonable business practices and judgment. 
  

	6.	LIMITATIONS ON WARRANTIES AND REMEDIES  

  

	6.1	EXCEPT AS EXPRESSLY SET FORTH IN RECITAL A AND SECTION 5, COH MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO: (i) ANY
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR (ii) ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE VALIDITY, SCOPE, OR OWNERSHIP OF THE PATENT RIGHTS. 

 

	6.2	 COH MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE LICENSED PRODUCTS OR THE INFRINGEMENT BY THE SAME OF ANY PATENT, COPYRIGHT, OR OTHER
PROPRIETARY RIGHT, OR ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE ABSENCE OF ANY DEFECT IN THE LICENSED 

  
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PRODUCTS OR PATENT RIGHTS. VICAL IS AWARE THAT IN ORDER TO PRACTICE ANY OR ALL OF THE PATENT RIGHTS, IT MAY BE NECESSARY TO OBTAIN ADDITIONAL LICENSES TO OTHER PATENTS OR INTELLECTUAL PROPERTY.

  

	6.3	VICAL SHALL NOT MAKE ANY REPRESENTATION OR WARRANTY TO THIRD PARTIES CONTRARY TO THE LIMITATIONS ON WARRANTIES AND REPRESENTATIONS GIVEN BY COH.

  

	6.4	VICAL HAS HAD THE OPPORTUNITY TO REVIEW OR HAS REVIEWED THE PATENT RIGHTS TO VERIFY THE SUITABILITY OF THE PATENT RIGHTS FOR VICAL’S INTENDED PURPOSE AND IS NOT
RELYING ON ANY STATEMENTS OF COH WITH RESPECT TO THE FOREGOING. 

  

	6.5	IN NO EVENT SHALL COH BE LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, ANY LOST PROFITS OR OPPORTUNITES, ARISING OUT OF,
RELATING TO, OR IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT, EVEN IF COH HAS BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES. IN NO EVENT SHALL COH’S LIABILITY TO VICAL UNDER OR RELATING TO THIS AGREEMENT (WHETHER IN TORT, CONTRACT,
QUANTUM MERUIT, OR OTHERWISE) EXCEED THE AMOUNT ACTUALLY RECEIVED BY COH FROM VICAL PURSUANT TO THIS AGREEMENT. IN NO EVENT SHALL COH BE LIABLE TO VICAL FOR ANY DAMAGES ARISING OUT OF, RELATED TO, OR IN CONNECTION WITH THE MANUFACTURE, SALE, USE,
OFFER FOR SALE, OR IMPORTATION OF LICENSED PRODUCTS OR EXPLOITATION OF THE PATENT RIGHTS. 

  

	6.6	THE LIMITATIONS SET FORTH ABOVE IN THIS SECTION 6 SHALL SURVIVE ANY EXPIRATION OR TERMINATION OF THIS AGREEMENT FOR ANY REASON. 

 

	7.	PATENT PROSECUTION  

  

	7.1	 Patent Prosecution. COH and VICAL shall cooperate to determine which additional patent

  
 -16-

	 	
applications should be filed and/or prosecuted to protect and exploit the Patent Rights (the “Agreed Patents/Applications”). COH shall, at VICAL’s expense, file, prosecute and
maintain the Agreed Patents/Applications that include claims in the Field, including arranging for payment of renewal and maintenance fees. COH also shall, at VICAL’s expense, defend or prosecute any reexamination, protest, interference,
opposition or other proceedings in the United States Patent and Trademark Office or foreign patent offices regarding any Agreed Patents/Applications or any patents issuing therefrom. COH shall be entitled to use counsel of its choice for the above
activities subject to the approval of VICAL, which will not be unreasonably withheld. COH shall consult with VICAL regarding major decisions in the course of any of the above activities (e.g., election to abandon an application, take an
appeal, copy claims to initiate an interference). In furtherance of such consultation COH will provide VICAL with copies of relevant documentation for review by VICAL in a reasonable time after COH’s receipt of those documents. Notwithstanding
such consultation, COH shall have sole and final discretion with respect to the activities provided for in this section. 

  

	7.2	Reimbursement of Future Expense. COH shall invoice VICAL for COH’s reasonable and documented expenses, including attorneys’ fees, incurred after the
Effective Date in connection with any of the activities specified in Section 7.1, above. VICAL shall pay all such invoices within thirty (30) days of receipt thereof. 

 

	7.3	Surrender of Patent Rights. VICAL may elect to surrender its license under the Patent Rights with respect to any foreign country or countries upon sixty
(60) days written notice to COH. If VICAL makes such an election, then VICAL’s license under Section 2.1 shall terminate with respect to those countries, the definitions of Patent Rights in Section 1.10 and Territory in
Section 1.12 shall be deemed to exclude those countries, and VICAL shall have no further obligation to reimburse COH for any activities under Section 7.1 related solely to patents or patent applications in those countries; provided,
however, that VICAL shall not be relieved from responsibility to reimburse COH for any expenses incurred prior to the expiration of the sixty (60)-day notice period (or such longer period specified in VICAL’s notice). 

 

	7.4	 Cooperation. VICAL shall cooperate fully in the activities described in Section 7.1, above, and shall execute and deliver such documents
and take such other actions as COH reasonably may 

  
 -17-

	 	
request in connection therewith. VICAL shall provide COH prompt notice of all matters that come to its attention that may affect these activities. 

 

	8.	DEFENSE OF TECHNOLOGY  

  

	8.1	Notice of Suspected Infringement. In the event either Party discovers or becomes aware of any suspected infringement of the Patent Rights in the Field in the
Territory, that Party promptly shall notify the other Party in writing of the details of the suspected infringement, including the identity of the suspected infringing party. For so long as VICAL’s right and license pursuant to Section 2.1
is exclusive, VICAL shall offer the suspected infringing party a sublicense in accordance with Section 2.3 or otherwise seek to abate the suspected infringement. 

 

	8.2	Abatement of Suspected Infringement by VICAL. If the suspected infringing party does not accept the sublicense offered in accordance with Section 8.1 or
does not otherwise cease the suspected infringement, VICAL and COH shall confer to determine whether the suspected infringement is substantial and the potential cost and predicted outcome of an infringement action against the suspected infringing
party would be favorable to COH and VICAL. If COH and VICAL agree that it would be favorable, then VICAL, at its sole cost and expense and with jointly agreed-to counsel, may commence an infringement action against the suspected infringing party.
COH shall cooperate reasonably in any such infringement action, including, if requested by VICAL, joining the action, all at VICAL’s expense. COH shall have the right at all times to participate fully in any such action, including through use
of its own independent counsel, provided that COH shall be responsible for the expense of its independent counsel. Any judgment, damages, settlement or award that results from any such action shall be allocated first to VICAL to the extent of actual
documented unreimbursed costs incurred in connection with the action, then to COH to the extent of actual documented unreimbursed costs incurred (including costs for independent counsel, if any), and the remainder to be allocated [...***...]
to COH and [...***...] to VICAL. 

  

	8.3	 Action by COH. If VICAL fails within six (6) months following the initial discovery of a suspected infringement to grant a sublicense,
initiate an infringement action, or otherwise abate the suspected infringement, and COH continues to believe in its reasonable business judgment that the 

  

***Confidential Treatment Requested 

  
 -18-

	 	
suspected infringement is substantial and the potential cost and predicted outcome of an infringement action against the suspected infringing party would be favorable, then: (i) the rights
granted by COH to VICAL under Section 2.1 shall, at COH’s option, become non-exclusive in the manner provided in Section 2.2(e) above; and (ii) COH may, at its sole option, commence an infringement action against the suspected
infringing party in COH’s name and at COH’s expense, and VICAL shall cooperate reasonably in any such action (at VICAL’s expense). Any judgment, damages, settlement or award which results from any such action shall be allocated first
to COH to the extent of the actual documented unreimbursed costs incurred in connection with the action, then to VICAL to the extent of actual documented unreimbursed costs incurred, and the remainder to be allocated one hundred percent
(100%) to COH. The right granted to COH under (i), above, to make the license grant hereunder non-exclusive, shall apply only if either (a) Vical is commercially manufacturing, commercially marketing, commercially exporting, or offering
for sale commercially a Licensed Product or (b) the suspected infringer is commercially manufacturing, commercially marketing, commercially exporting, or offering for sale commercially a commercial product that COH believes infringes the Patent
Rights. 

  

	8.4	Common Interest Privilege. Any communications between or among COH, VICAL and their respective counsel concerning any of the matters provided for in this
Section 8 or Section 7, above, shall be treated as Confidential Information and shall not be deemed a waiver of any applicable privilege or immunity. These communications shall, to the fullest extent permitted by law, be deemed privileged
communications made in furtherance of a joint prosecution or defense, or among parties having common legal interests. 

  

	9.	INDEMNIFICATION  

  

	9.1	 VICAL shall at all times during the term of this Agreement and thereafter, indemnity, defend, and hold COH, its Affiliated Companies, and their
trustees, directors, officers, employees and agents (“Indemnities”), harmless from and against all claims, suits, liabilities, losses, damages, proceedings, demands, expenses (including reasonable legal expenses and reasonable
attorneys’ fees) and costs (“Claims”), related in any way to the exercise by VICAL of any rights granted under this Agreement, including but not limited to the production, manufacture, sales, use, consumption, importation, promotion,
distribution, advertisement or other application of a 

  
 -19-

	 	
Licensed Product by VICAL, an Affiliated Company, a sublicensee, or a customer of any of them. VICAL shall not be obligated, however, to indemnify Indemnitees for that portion of any Claim
determined to arise directly from the gross negligence or a willful act or omission by COH, or a breach of any warranty set forth in Section 5 by COH. 

 

	9.2	COH shall notify VI CAL promptly of any Claim for which indemnification is sought, and cooperate reasonably with VICAL, at the expense of VICAL, in the defense and
settlement of that Claim. VICAL, in settling any Claim, shall not make any admission of fault or impose any obligation on COH, without the prior written consent of COH. 

 

	10.	INSURANCE 

 VICAL shall
obtain and maintain, during the term of this Agreement (and covering claims made for a period of three (3) years thereafter), Comprehensive General Liability Insurance, including Products Liability Insurance, with a reputable, secure insurance
carrier(s) in the amount of at least [...***...] per occurrence to cover acts or omissions concerning the production, manufacture, sale, use, importation, consumption, promotion, distribution, advertisement or other application of Licensed
Products by VICAL or anyone acting under its permission, and to cover VICAL’s indemnification obligations set forth in Section 9, above. 
  

	11.	NOTICE  

 Any notice or
other communication required or permitted shall be in writing and shall be deemed to have been received on the delivery date if personally delivered, sent by overnight courier, or sent by facsimile; or, if mailed, seventy-two (72) hours after
having been placed in the United States mail, registered or certified, postage prepaid, addressed to the Party to whom it is directed at the address set forth below: 
 If to COH: 
 City of Hope 

1500 East Duarte Road 
 Duarte, CA 91010-3000 

  

***Confidential Treatment Requested 

  
 -20-

 Attention: Sr. Vice President for Technology Development 

Facsimile: [...***...] 
 With a copy to: 
 City of Hope 

Office of General Counsel 
 1500 East Duarte Road 
 Duarte, CA 91010-3000 

Facsimile: [...***...] 
 If to VICAL: 
 Vical, Incorporated 

9373 Towne Centre Drive, 
 Suite 100 San Diego, CA 92121-3088 
 Attention: Executive Director, Business
Development & 

                 Technology Assessment 

Facsimile: [...***...] 
 With a copy to: 
 [...***...] 

Cooley Godward, LLP 4401 
 Eastgate Mall San Diego, CA 92121-1909 
 Tel: [...***...] 

Facsimile: [...***...] 
 Either Party may change the address to which notices are to be addressed by giving the other Party written notice in the manner described in this Section 11. 

 

	12.	GOVERNING LAW AND JURISDICTION  

 The validity, construction, and interpretation of this Agreement shall be governed in all respects by, and the Agreement shall be construed in accordance with, the laws of the State of California,
exclusive of choice of law principles. Each party consents to service of process in any action or 

  

***Confidential Treatment Requested 

  
 -21-

 
proceeding by mailing a copy of such process by United States mail, registered or certified, postage prepaid, return receipt requested, to the addresses listed in Section 11. Unless
otherwise agreed to by the Parties, all disputes, claims or proceedings between the Parties arising under this Agreement shall be brought to trial or other adjudication in the state or federal courts sitting in Los Angeles County, California, except
for disputes, claims or proceedings that are within the exclusive jurisdiction of the Federal Circuit. Subject to any right of appeal, both Parties agree that any judgement rendered shall be conclusive, binding, and enforceable by any court of
competent jurisdiction. In the event of litigation or other proceedings arising out of or relating to this Agreement (including proceedings in bankruptcy), the prevailing Party shall be entitled to recover its reasonable attorneys’ fees and
expenses of litigation. 
  

	13.	FORCE MAJEURE 

 Except for
the obligation to pay royalties and other sums under this Agreement, neither VICAL nor COH shall be liable for non-performance caused by any circumstance beyond its reasonable control, including, without limitation, the following: war, floods,
earthquakes, other acts of God, industrial disputes, civil disobedience, strikes, fire, mobilization, changes in governmental regulation or interpretation, requisition, embargo, restriction and shortage of transport facilities, fuel, energy or
supplies. Each party claiming the benefit of such an excuse agrees to notify the other Party promptly in writing of any such delay or failure in performance, and to resume performance as soon as is reasonably practicable. 

 

	14.	PUBLICATION 

 Neither
Party shall use the name of the other Party or of any staff member or employee of the other Party in any publication or presentation which relates to the subject matter of this Agreement without the prior written consent of the other Party in each
instance. 
  

	15.	RELATIONSHIP OF THE PARTIES  

 The relationship between the Parties under this Agreement is that of licensee and licensor. Neither Party shall have any right or authority whatsoever to assume or to create any obligation or

  
 -22-

 
responsibility of the other Party or to bind the other Party in any manner. 
  

	16.	SEVERABLE PROVISIONS  

The provisions of this Agreement are severable and if anyone or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially unenforceable provisions to the extent enforceable, shall nevertheless be binding and enforceable. 

 

	17.	CONFIDENTIAL INFORMATION  

The Parties agree to hold in confidence any Confidential Information disclosed by the other Party hereunder, and not to disclose any
Confidential Information to any third party without the express written consent of the other Party, provided that either Party may disclose such information, in confidence, to its attorneys, auditors and professional advisors with a need to know, or
to a court or tribunal as necessary to enforce this Agreement. The Parties shall use the same degree of care in protecting Confidential Information as each uses for its own information of like importance, but not less than a reasonable degree of
care. Each Party will use Confidential Information only for purposes of furthering the purposes of this Agreement. With respect to any Confidential Information that is revealed by a Party to the other Party, this confidentiality requirement will
remain in force for a period of five (5) years following the date the Confidential Information is revealed, except that the terms of this Agreement and the amount of any payments hereunder shall remain confidential throughout the Term of this
Agreement, except as expressly provided herein. 
  

	18.	ASSIGNMENT 

 VICAL shall
not assign or transfer in any manner (including operation or law) this Agreement, nor any of its rights, obligations, or duties, without the prior written consent of COH, which consent COH may withhold in its sole discretion. Provided, however,
VICAL may assign its rights under this agreement to a party that acquires all or substantially all of the assets of VICAL. 
  

	19.	HEADINGS  

  
 -23-

 Section and subsection headings are not to be considered part of this Agreement and are
included solely for convenience and reference and in no way define, limit, or describe the scope of this Agreement or the intent of any provision. 
  

	20.	NO CONSTRUCTION AGAINST DRAFTER  

 No provision of the Agreement, or any document delivered pursuant to the Agreement, shall be construed against any party, merely because that party drafted that provision or document. 

 

	21.	PATENT MARKING  

 VICAL
shall mark all Licensed Products, or their containers or manuals, in accordance with all applicable United States patent marking laws and laws of any foreign country where Licensed Products are sold. 

 

	22.	EXPORT  

 VICAL shall be
responsible for compliance with all export control regulations and obtaining any necessary licenses prior to the exportation of Licensed Products or technical information relating to Licensed Products. 

 

	23.	ENTIRE AGREEMENT  

 This
Agreement embodies and sets forth the entire agreement and understanding of the Parties and supersedes all prior oral and written agreements, understandings or arrangements relating to the subject matter of this Agreement. Neither Patty shall be
entitled to rely on any agreement, understanding or arrangement that is not expressly set forth in this Agreement. This Agreement shall not be amended, modified, varied or supplemented except in writing signed by duly authorized representatives of
the Parties. 
 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date and year first set forth above.

  
 -24-

									
	VICAL, INCORPORATED	 		 	CITY OF HOPE
					
	By:	 	 /s/ VIJAY B. SAMANT
	 		 	By:	 	 /s/ LARRY A. COUTURE, PH.D.

					
		 	Vijay B. Samant	 		 		 	Larry A. Couture, Ph.D.
		 	President and CEO	 		 		 	Sr. Vice President for Technology Development
		 	Date: February 3, 2003	 		 		 	Date: February 3, 2003

  
 -25-Retirement Agreement

 Exhibit 10.1 
 RETIREMENT AGREEMENT AND RELEASE OF ALL CLAIMS 
 This
Retirement Agreement and Release of All Claims (“Agreement”) is made by and between Francis W. McDonnell (“McDonnell”) and Navigators Management Company, Inc. (“NMC”) and was given to McDonnell on October 10, 2011.
In consideration of the covenants and agreements contained in this document and the consideration described herein, McDonnell and NMC (collectively, the “Parties”) agree as follows: 

1. Retirement from Employment. McDonnell’s employment with NMC shall terminate effective on October 31,
2011 (the “Termination Date”). Effective on the Termination Date, McDonnell shall resign from all Board of Director and officer positions with NMC and its subsidiaries and affiliates, including, without limitation, The Navigators Group,
Inc., Navigators Insurance Company, Navigators Specialty Insurance Company and Navigators Underwriting Agency Ltd. 
 2. NMC’s Obligations. If McDonnell timely provides to NMC a fully executed original of this Agreement, does not revoke this Agreement pursuant to Paragraph 10(g), and otherwise fulfills his
obligations under this Agreement: 
  

	 	(a)	 NMC will pay to McDonnell: 

(i) one year of continued salary equivalent to $425,000, minus applicable payroll taxes and withholdings,
which shall begin to be paid on November 15, 2011 and shall be periodically paid in cash following such date in accordance with NMC’s standard bi-monthly payroll practices and schedule until March 1, 2012 and the remaining unpaid
balance of the $425,000 (minus applicable payroll taxes and withholding) shall be paid in a lump sum on March 12, 2012; and 

 (ii) McDonnell’s target bonus of $340,000 under The
Navigators Group, Inc.’s Annual Incentive Plan (“AIP”) for 2011, which shall be paid in cash in 2012, on or before March 12, 2012; and 
  

	 	(b)	 The 5,500 unvested restricted share units of The Navigators Group, Inc. that were granted to McDonnell on August 5, 2008 shall vest on the
Termination Date and such restricted share units shall be settled by delivery of 5,500 shares of common stock of The Navigators Group, Inc. to McDonnell on August 5, 2012. All other unvested equity awards granted to McDonnell by NMC shall be
forfeited. 

 3. Release by McDonnell. To the greatest extent permitted by law, McDonnell, on behalf of
himself and his heirs, successors, agents, and assigns, hereby releases and forever discharges NMC, which is specifically defined for purposes of this release to include NMC and all of its predecessor, successor, parent, subsidiary, affiliated
entities (specifically including, The Navigators Group, Inc., Navigators Insurance Company, and Navigators Specialty Insurance Company) and all of its/their officers, directors, employees, and agents (the “Released Parties”), from any and
all liability for any and all claims arising on or prior to the effective date of this Agreement. This release includes, but is not limited to, any and all claims, rights, demands, and causes of action of any and every kind, whether now known or
unknown, real or potential, whether arising out of any claim for wrongful termination, breach of contract, discrimination, harassment, retaliation, and/or any other tort, personal injury, or violation of 

  
 2 

 
public policy or statute, including but not limited to Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act, the Americans With Disabilities Act, the Fair Labor Standards Act, and any and every other federal, state, and local law, statute, and ordinance and Letter Agreements dated July 10 and 11, 2008 between McDonnell and The
Navigators Group, Inc.. However, nothing in this Agreement shall be construed as waiving or releasing any claim which cannot be waived or released by private agreement of the Parties, or as prohibiting McDonnell from filing a charge or complaint,
including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission (“EEOC”), or as prohibiting McDonnell from participating in any investigation or proceeding conducted by the EEOC. McDonnell agrees,
however, that by signing this Agreement, he waives all rights to individual relief based on claims asserted in any such EEOC proceeding. Anything to the contrary notwithstanding, nothing herein shall release any of the Released Parties from any
liabilities based on (a) McDonnell’s right to enforce the terms and conditions of this Agreement, (b) any right or claim that arises after the date this Agreement is executed by McDonnell, (c) any right McDonnell may have to
vested or accrued benefits or entitlements under any applicable plan, agreement, program, award, policy or arrangement of NMC or its parents, subsidiaries and affiliates, (d) any rights McDonnell may have as a shareholder of NMC or any of its
subsidiaries or affiliates, (e) McDonnell’s right to indemnification and advancement of expenses in accordance with applicable laws and/or the certificate of incorporation and by-laws of NMC or its parents, subsidiaries and affiliates or
this Agreement or any applicable insurance policy, or (f) any right McDonnell may have to obtain contribution as permitted by law in the event of entry of judgment against McDonnell as a result of any act or failure to act for which McDonnell,
on the one hand, and the Released Parties, on the other hand, are jointly liable. 

  
 3 

 4. Confidentiality of NMC’s Information. McDonnell acknowledges
and agrees that he was given access to and has obtained knowledge and information about NMC and its subsidiary and affiliated companies which is private, confidential, proprietary, and/or constitutes trade secret information. As a material provision
of this Agreement, McDonnell agrees to abide by all policies of NMC which limit the dissemination of such information and further to keep all such information completely confidential and not to disclose or publish that information to anyone,
including but not limited to past, present, or prospective employees, customers, vendors, competitors, and/or business partners of NMC, and/or prospective or future employers of McDonnell, except (a) if disclosure of such information is
specifically required by subpoena, court order, any governmental agency having jurisdiction or by any administrative or legislative body (including a committee thereof); (b) if disclosure of such information is required to perform
McDonnell’s obligations under Paragraphs 11 and 12 of this Agreement; (c) if such information becomes generally known to and available for use by the public other than as a result of McDonnell’s acts or omissions in violation of this
Paragraph 4, (d) if disclosure of such information becomes necessary in connection with the defense of any claim brought against McDonnell, NMC or any of its subsidiaries and affiliates, or (e) if disclosure of such information is made to
enforce any rights or defend any claims hereunder or under any other agreement to which McDonnell is a party, provided that such disclosure is necessary to the enforcement of such rights or defense of such claims and is only disclosed to the extent
necessary in the formal proceedings related thereto. To the extent McDonnell possesses or possessed such information in written or electronic form, McDonnell represents and promises 

  
 4 

 
that he either has returned or will use reasonable efforts to return as soon as practicable after the Termination Date all such information (including all copies) to NMC, provided McDonnell shall
be entitled to retain (i) papers and other materials of a personal nature, including, but not limited to, photographs, personal correspondence, personal diaries, personal calendars, and rolodexes, (ii) information showing McDonnell’s
equity awards or compensation, or relating to expense reimbursements, (iii) information that McDonnell reasonably believes may be needed for his own tax purposes, and (iv) copies of employee benefit and compensation plans, programs,
agreements and other arrangements of NMC or any of its subsidiaries or affiliates in which McDonnell was a participant or covered. 
 5. Nondisparagement. McDonnell agrees not to make any written or oral statement about NMC and its subsidiary and affiliated companies (specifically including The Navigators Group, Inc., Navigators
Insurance Company, and Navigators Specialty Insurance Company and all of its/their officers, directors, employees, products, and services) which McDonnell knows or reasonably should know to be untrue and agrees not to make any disparaging or
negative written or oral statement concerning NMC and its subsidiary and affiliated companies (specifically including The Navigators Group, Inc., Navigators Insurance Company, and Navigators Specialty Insurance Company and all of its/their officers,
directors, employees, products, and services) with the intent to cause injury or harm. Each member of the current Global Leadership Team of NMC (as currently constituted and similar future successor corporate bodies) and current Board of Directors
of The Navigators Group, Inc. agrees during the period of his/her employment not to make any written or oral statement about McDonnell which is known or reasonably should be known to be untrue and agrees not to make any disparaging or negative
written or oral statement about McDonnell with the intent to 

  
 5 

 
cause injury or harm. Nothing in this Agreement shall prevent the disclosure of truthful information by any Party, if required by law (including, as may be necessary, to respond in an appropriate
and truthful manner to any legal process or give appropriate and truthful testimony in a legal or regulatory proceeding). 
 6. Non-Solicitation of Employees. McDonnell covenants and agrees that until September 30, 2012 he shall not solicit, hire, engage or attempt to hire or engage for employment, consulting or
independent contracting any individual who shall have been an employee of NMC or its affiliates in the Finance or Actuarial Departments of NMC at the time of such solicitation, whether on McDonnell’s own behalf or on behalf of another entity in
which McDonnell shall have a direct or indirect interest, as a proprietor, partner, co-venturer, creditor, stockholder, director, officer, employee, agent, representative or otherwise. Notwithstanding the foregoing, the following shall not be a
violation of this Paragraph 6: (a) McDonnell responding to an unsolicited request from any such employee for advice on employment or business matters; (b) McDonnell responding to an unsolicited request for a reference regarding any such
employee, by providing a reference setting forth his personal views about such person; or (c) any organization with which McDonnell is affiliated (including his employer) engaging or soliciting such employee if McDonnell was not involved
(directly or indirectly) in such activity. 
 7. No Assignment of Claims. McDonnell warrants that he has
not transferred to any other person or entity any of the rights or causes of action released in this Agreement. 

8. No Other Monies Due. Except as provided herein in Paragraphs 2, 11 and 12 and the following “Accrued
Obligations”, no other money, expense, cost, or fee shall be paid by NMC to McDonnell as part of this Agreement: (a) accrued but unpaid base salary through the 

  
 6 

 
Termination Date; (b) payment for accrued but unused vacation days through the Termination Date in an amount equal to $21,500; (c) any unreimbursed business expenses incurred by
McDonnell on or prior to the Termination Date; and (d) compensation and benefits payable to McDonnell under the terms or rules of NMC’s compensation and benefit plans (other than severance plans, equity compensation plans and bonus plans)
in which McDonnell participated prior to the Termination Date. NMC shall pay or provide such Accrued Obligations to McDonnell (x) in the case of (a) and (b) above, in a lump sum cash amount within thirty (30) days following the
Termination Date, (y) in the case of (c) above, pursuant to NMC’s expense reimbursement policy and Paragraph 14 hereof, and (z) in the case of (d) above, pursuant to the terms of the applicable compensation and benefit
plans. 
 9. Certification of Understanding. McDonnell certifies that he understands and has voluntarily
agreed to all of the terms of this Agreement. McDonnell also certifies that he does not rely and has not relied on any representation or statement made by NMC or by any agent, representative, or attorney of NMC with regard to the subject matter of
this Agreement, except as set forth herein. 
 10. Fairness of Agreement. McDonnell understands and
agrees that he: 
 a. Has had more than twenty-one (21) days within which to consider this Agreement before
executing it. 
 b. Has carefully read and fully understands all of the provisions of this Agreement.

 c. Is, through this Agreement, releasing NMC and related entities and individuals (as described in Paragraph
3) from any and all claims he has or may have against it/them, including claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621, et seq.). 

  
 7 

 d. Knowingly and voluntarily agrees to all of the terms of this Agreement.

 e. Knowingly and voluntarily intends to be legally bound by all of the terms of this Agreement. 

f. Was advised and hereby is advised in writing to consider the terms of this Agreement and consult with an attorney of
his choice prior to executing this Agreement. 
 g. Has a full seven (7) days following
the execution of this Agreement to revoke this Agreement and has been and hereby is advised in writing that this Agreement shall not become effective or enforceable until the revocation period has expired. Any such revocation must be in a writing
received by Bruce J. Byrnes, Senior Vice President, General Counsel & Chief Compliance Officer, by the seventh
(7th) day, or Mr. Byrnes must be notified by
phone on or before the seventh (7th) day and a
written revocation must then be received by him within seven (7) days thereafter. 
 h. Understands that
rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621, et seq.) that may arise after the date this Agreement is executed are not waived. 

11. Post-Separation Cooperation. For a period of one year following the Termination Date, McDonnell agrees to
cooperate with and make himself reasonably available to NMC (including its subsidiary and affiliated companies and its/their employees) to provide information that was learned by him during his employment, so long as such cooperation is not contrary
to McDonnell’s own legal interests or in direct conflict with the legal interests of 

  
 8 

 
his employer. In the event any such persons require McDonnell’s cooperation in accordance with this Paragraph 11, NMC shall, upon receipt of appropriate documentation from McDonnell,
reimburse McDonnell for reasonable costs and expenses incurred by McDonnell as a result of providing such cooperation (including travel expenses at the same level of travel and accommodations as when he was an executive of NMC) and legal expenses if
McDonnell reasonably believes separate counsel is appropriate. It is anticipated that this cooperation obligation will be limited to periodic telephone and email communications. McDonnell acknowledges that the consideration provided to him in this
Agreement is ample compensation for his cooperation. 
 12. Indemnification. NMC and its subsidiary and
affiliated companies agree to indemnify McDonnell (and provide for advancement of expenses subject to a mutually acceptable reimbursement agreement) with respect to any claim which has been or which may be asserted against him based on his acts or
omissions arising out of his employment or service as an officer or director of NMC or any of its subsidiaries or affiliates, consistent with and to the fullest extent permitted by applicable law and/or the certificate of incorporation and by-laws
of NMC or its parents, subsidiaries and affiliates. NMC shall also continue to provide McDonnell directors and officers liability insurance coverage (which shall be substantially the same as the coverage prior to the Termination Date) for all claims
which have been or may be asserted against him based on his acts or omissions arising out of his employment or service as an officer or director of NMC or any of its subsidiaries or affiliates. McDonnell, in turn, agrees to cooperate fully with NMC
and its subsidiary and affiliated companies with regard to the defense of any such claims. 

  
 9 

 13. No Admission of Liability. This Agreement and compliance
therewith shall not be construed as an admission by NMC or McDonnell of any liability whatsoever or as an admission of any wrongdoing. NMC and McDonnell specifically disclaim all wrongdoing and disclaim any liability to the other for any alleged
violation of the other’s rights, including any violation of common law, statute, or contract. 
 14.
Compliance With Section 409A. This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and will be interpreted in a manner intended to comply with
Section 409A of the Code. Notwithstanding anything herein to the contrary, (i) if at the time of McDonnell’s separation of employment with NMC, he is a “specified employee” as defined in Section 409A of the Code (and
any related regulations or other pronouncements thereunder) and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such separation of employment is necessary in order to prevent any accelerated or
additional tax under Section 409A of the Code, then NMC will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to McDonnell) until
the date that is six months following McDonnell’s separation from employment with NMC (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to McDonnell
hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A
of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by NMC, that does not cause such an accelerated or additional tax. To the extent any reimbursements or in-kind benefits
due to 

  
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McDonnell under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to McDonnell in
accordance and in compliance with the requirements of Treas. Reg. Section 1.409A -3(i)(1)(iv)(A). Each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section 409A of the Code.
All payments to be made upon a separation from employment under this Agreement may only be made upon a “separation from service” within the meaning of such term under Section 409A of the Code. In implementation of the foregoing
provisions, the Parties agree that (x) McDonnell’s termination of employment pursuant to this Agreement shall be treated solely for purposes of Section 409A of the Code as an “involuntary separation from service” within the
meaning of Treas. Reg. Section 1.409A -1(n)(1); and (y) the payments to be made to McDonnell under Paragraphs 2(a)(i) and (ii) of this Agreement shall be treated as exempt from the requirements of Section 409A of the Code
pursuant to the “short term deferral” exemption under Treas. Reg. Section 1.409A -1(b)(1) and therefore as not being subject to the six month delay provision referred to in clause (i) of the second sentence of this Paragraph 14.

 15. Governing Law. This Agreement shall in all respects be interpreted, enforced and governed under
the laws of the State of New York and any dispute arising out of or related to this Agreement shall be submitted to the state or federal courts located in the County of New York in the State of New York, whose jurisdiction is hereby consented to by
the parties. 
 16. Severability. Should any clause or provision of this Agreement be declared illegal or
unenforceable, it shall immediately become null and void, leaving the remainder of this Agreement in full force and effect. 

  
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 17. Amendment. This Agreement may not be modified, altered or
changed, except upon express written consent of an officer of NMC and McDonnell, wherein specific reference is made to this Agreement. 
 18. Entire Agreement of the Parties. This document supersedes any and all prior agreements or understandings, written or oral, pertaining to matters encompassed by this Agreement. 

19. Signatures. This Agreement shall have no force or effect unless and until it is signed by McDonnell and an
authorized representative of NMC, and then only after the revocation period set forth in Paragraph 10g has expired. 
 20. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

 21. Construction. The headings and captions of this Agreement are inserted for convenience only and
shall not be deemed part of this Agreement for any purpose whatsoever. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner
the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against
any party. 
 22. Notices. Any notice, demand, claim or other communication under this Agreement will be
in writing and will be deemed to have been given (a) on delivery if delivered personally or by registered or certified mail (b) on the date of transmission thereof if sent by electronic or facsimile transmission and delivery is confirmed,
but, in each case, only if 

  
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addressed to the Parties in the following manner at the following addresses (or at the other address as a party may specify by notice to the other): (i) to NMC, to the attention of General
Counsel, or such other officer of NMC designated by NMC, at NMC’s principal executive offices; and (ii) to McDonnell, at his principal residence as set forth in the Company’s records. 

23. Consents. NMC hereby warrants and represents that (i) the execution and delivery of this Agreement and
consummation of all transactions contemplated herein have been duly authorized in accordance with all corporate formalities and this Agreement and the obligations hereunder shall be binding on NMC and all of its subsidiaries and affiliates, as
applicable, and (ii) the corporate officer executing this Agreement has been duly authorized to execute and deliver it. 
 IN WITNESS
WHEREOF, the Parties hereto have executed this Agreement as of the dates set forth below. 
  

					
	 Dated: October 25, 2011
	 	FRANCIS W. MCDONNELL
		
		 	     /s/ Francis W. McDonnell

		
	 Dated: October 25, 2011
	 	NAVIGATORS MANAGEMENT COMPANY, INC.

					
			
		 	   By:	 	   /s/ Bruce J.
Byrnes

					
		
		 	BRUCE J. BYRNES
		 	TITLE: SENIOR VICE PRESIDENT

  
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