Document:

Separation Agreement (Thomas J. Seward II)

 Exhibit 10.18 
  
 AGREEMENT 
  
 This Agreement (the “Agreement”) is entered into by and between Hercules Drilling Company, LLC, d/b/a Hercules Drilling Company, a Delaware
limited liability company (the “Company”) and Thomas J. Seward II (“Seward”), effective seven days following Seward’s execution of the Agreement. 
  
 WHEREAS, Seward’s employment with the Company or any of its affiliates will terminate on September 30, 2005 (the
“Termination Date”); 
  
 WHEREAS, in connection with the
termination of Seward’s employment with the Company, the Company and Seward desire to enter into this Agreement on the terms and conditions set forth below; 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, and agreements contained herein, the Company and
Seward hereby agree as follows: 
  
 1. Resignation: Seward
agrees that, as of the Termination Date, he has resigned all positions with the Company and its affiliates (including without limitation Hercules Offshore, LLC), including without limitation as President of the Company and as a member or nominee of
the Company’s Board of Directors, as well as any trustee position or signatory authority. 
  
 2. Payments to Seward: The Company agrees to pay the following sums of money: 
  
 (a) The Company agrees to pay Seward the sum of Four Hundred Thirty-Four Thousand Seven Hundred Twelve Dollars ($434,712.00) less applicable withholdings
required by law. This payment will be made to Seward no earlier than the eighth day following the execution of this Agreement. 
  
 (b) If Seward timely elects to continue health coverage as described in Paragraph 13, the Company agrees to pay to Seward the cost of ten months’
premiums in a lump sum no earlier than the eighth day following the execution of this Agreement. 
  
 (c) The Company will transfer the lease of the residence at 2777 Woodland Park Drive, #414, Houston, Texas to Seward no earlier than the eighth day
following the execution of this Agreement. 
  
 (d) The Company
agrees to pay Seward’s reasonable attorneys’ fees and costs incurred in negotiating this Agreement. 
  
 3. Release Of Claims: Seward hereby RELEASES AND FOREVER DISCHARGES the Company and its Affiliates (as defined below), and their respective owners,
members, stockholders, agents, directors, officers, managers, partners, employees, insurers, representatives, lawyers, employee welfare benefit plans, pension plans and/or deferred compensation plans and their trustees, administrators or other
fiduciaries, the successors or assigns of any of the foregoing, and all persons acting by, through, under, or in concert with 

 them, or any of them (collectively, the “Released Parties”) of and from any and all manner of action or
actions, cause or causes of action, at law or in equity, suits, debts, liens, contracts, agreements, promises, liabilities, claims, demands, damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or contingent, direct or
indirect, asserted or unasserted, liquidated or unliquidated, due or to become due (hereinafter called “claims”), which Seward now has or may hereafter have against the Released Parties by reason of any matter, cause, or thing whatsoever
up to and including the date hereof including but not limited to those claims arising out of his employment with the Company or any Affiliate, the termination of such employment, or arising pursuant to any contract between the parties thereto.
Without limiting the generality of the foregoing, the claims released herein include any claims arising out of, based upon, or in any way related to: 
  
 (a) the Employment Agreement between the Company and Seward dated January 1, 2005, and any amendments or supplements to that agreement (the
“Employment Agreement”); 
  
 (b) any claim of
entitlement to present or future employment or reemployment with the Company or any Affiliate; 
  
 (c) any property, contract, or tort claims, including any and all claims of wrongful discharge, breach of employment contract, breach of any covenant of good faith and fair dealing, retaliation, intentional or
negligent infliction of emotional distress, tortious interference with contract or existing or prospective economic advantage, negligence, misrepresentation, breach of privacy, defamation, loss of consortium, breach of fiduciary duty, violation of
public policy, or any other common law claim of any kind; 
  
 (d)
any violation or alleged violation of Title VII of the Civil Rights Act of 1964, as amended, the Older Workers Benefit Protection Act of 1990, the Equal Pay Act, as amended, the Fair Labor Standards Act, the Employee Retirement Income Security Act,
the Americans With Disabilities Act, the Texas Labor Code, the Texas Unemployment Insurance Act, the Texas Worker’s Compensation Act, the Civil Rights Act of 1866, the Consolidated Omnibus Budget Reconciliation Act, or any other federal, state,
or local statute, regulation, or ordinance; 
  
 (e) any violation
or alleged violation of the Age Discrimination in Employment Act, as amended; 
  
 (f) any claim for severance pay, bonus, sick leave, vacation or holiday pay, life insurance, health insurance, disability or medical insurance, or any other employee benefit; 
  
 (g) any claim relating to or arising under any other local, state, or federal
statute or principle of common law (whether in contract or in tort) governing employment, discrimination in employment, and/or the payment of wages or benefits; and 
  
 (h) any claim that the Company or any of the other Released Parties has acted improperly, illegally, or unconscionably in
any manner whatsoever at any time prior to the execution of this Agreement; provided however, that the release described herein shall not apply 
  

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 to any claims that Seward has or may have in the future (i) with respect to any breach of this Agreement by the
Company or (ii) with respect to any claim under the Company’s managers and officers insurance policies or claims for indemnification pursuant to Section 8 of the Employment Agreement, or (iii) with respect for any vested benefits
of Seward under any employee benefit plan of the Company or any Affiliate. 
  
 4. Consideration and Revocation Periods: With respect to Seward’s agreement to release any claims for violations or alleged violations of the Age Discrimination in Employment Act, as amended, as discussed
in Paragraph 3(e), above, Seward understands that this Agreement is written in a manner calculated to be understood by him, that he understands this Agreement, that he does not waive any rights or claims that may arise after the date this Agreement
is executed, that he is waiving any rights or claims only in exchange for consideration in addition to anything of value to which he already is entitled, that he is advised to consult with an attorney prior to executing this Agreement, that he has a
period of at least twenty-one days within which to consider this Agreement, that he has a period of at least seven days following the execution of this Agreement within which to revoke this Agreement, and this Agreement will not become effective or
enforceable until the revocation period has expired. 
  
 5.
Effect Of Revocation Of Agreement By Seward: Notwithstanding the Company’s agreements to pay Seward, in the event of any revocation by Seward of this Agreement pursuant to Paragraph 4, above, the Company will not be obligated to make any
payments to Seward under this Agreement and all amounts previously paid to Seward pursuant to Paragraph 2 shall be immediately due and payable to the Company upon written notice to Seward by the Company. 
  
 6. Covenant Not To Sue: Seward agrees that it is his intention in
executing this agreement that it shall be effective to bar each and every claim up to and including the date hereof that he now has or could have against the Released Parties except as otherwise provided in this Agreement. In signing this Agreement,
Seward agrees never to institute any claims at law or equity against the Released Parties, including claims relating to his employment with the Company or any Affiliate or the termination of such employment. 
  
 7. Warranty That Claims Have Not Been Assigned Or Conveyed: Seward
represents and warrants that he has not assigned or conveyed to anyone else any part of or interest in his claims against any of the Released Parties. Seward agrees to indemnify and hold each of the Released Parties harmless from any liability,
demand, cost, expense, or attorney’s fee incurred as the result of the assertion of any such claim or claims by any other person based on such an assignment or conveyance from Seward. 
  
 8. Agreement To Indemnify If Claim Is Filed: Seward agrees that if he
hereafter commences, joins in, or seeks relief against any of the parties released hereunder through any administrative claim, lawsuit, or arbitration arising out of, based upon, or relating to any of the claims released hereunder or in any manner
asserts against any of the Released Parties any of the claims released hereunder, then Seward shall pay, in addition to any other damages caused thereby, all attorney’s fees and costs incurred by such Released Party in defending or otherwise
responding to said suit or claim. 
  

 3 

 9. Non-Competition, No Solicitation, Return of Company Property, Inventions, and Confidentiality
Covenants: The parties acknowledge and agree that Sections 4, 5, 6, 7, and 8 of the Employment Agreement remain in full force and effect. Except as set forth in the preceding sentence, the Employment Agreement shall be of no further force or
effect. 
  
 10. Notification To Company: In the event
Seward is required by subpoena or order by a court of any competent jurisdiction to disclose any Confidential Information, as it is defined in Section 7(d) of the Employment Agreement, Seward agrees to promptly notify the Company so that the
Company may seek an appropriate protective order and/or waive Seward’s compliance with his obligation to maintain the confidentiality of the Confidential Information. In the event such protective order or other remedy is not obtained, then
Seward agrees to disclose only that portion of such Confidential Information that he is legally required to disclose. 
  
 11. No Disparagement Of Company: Seward agrees that he will not disparage, directly or indirectly, the Company or its Affiliates, or their
respective owners, members, stockholders, agents, directors, officers, managers, associates, partners, employees, insurers, representatives, or lawyers. 
  
 12. Litigation And Regulatory Cooperation: Seward agrees to cooperate with the Company in the prosecution or defense of any claims or actions now
in existence or that may be brought in the future against or on behalf of any of the Released Parties that relate to events or occurrences that transpired while Seward was employed by the Company or any Affiliate. Seward’s cooperation in
connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of any of the Released Parties at mutually convenient times. Seward
also shall cooperate fully with the Released Parties in connection with any investigation or review by any federal, state, or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while
Seward was employed by the Company or an Affiliate. The Company shall reimburse Seward for all costs and expenses incurred in connection with his performance under this paragraph, including, but not limited to, reasonable attorneys’ fees and
costs. 
  
 13. COBRA: Seward shall have the right, as
established under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, 26 U.S.C. 162 (k) (“COBRA”), to continue health coverage provided by the Company’s medical plan, for the 18 month period
following the Termination Date, provided that he pays the cost of the premiums for such continuation coverage after August 1, 2006. The Company will pay the cost of the premiums for such continuation coverage from the Termination Date through
August 1, 2006. If Seward elects such continuation coverage, he shall immediately notify the Company if he later becomes covered by another employer’s group medical plan during the time that he receives continuation coverage pursuant to
the Company’s plan. 
  
 14. Legal and Equitable
Remedies: The parties agrees that each party hereto has the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond and without prejudice to any other rights and
remedies that such party may have for a breach of this Agreement by the other party. 
  

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 15. OTHER PROVISIONS. 
  
 (a) Governing Law and Consent to Personal Jurisdiction; Arbitration: This Agreement is governed by and will be
construed in accordance with the internal laws of the State of Texas without giving effect to any choice of law or conflict provisions or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Texas, and each party hereby expressly consents to the personal jurisdiction of the state and federal courts located in Harris County, Texas for any lawsuit filed arising from or relating to this Agreement or
the related arbitration. Except with respect to injunctive relief as provided for in Paragraph 3 of this Agreement and in Section 4 of the Employment Agreement or other emergency measures, any unresolved dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration by a single arbitrator in an arbitration hearing in Houston, Texas, in accordance with the rules of the American Arbitration Association then in effect. The arbitrator
shall not have the authority to amend any provision hereof. The arbitrator shall not have the authority to add to, detract from, or modify any provision hereof nor to award punitive damages to any injured party. In any arbitration proceeding
conducted subject to these provisions, all statutes of limitation that would otherwise be applicable shall apply to any arbitration proceeding hereunder. In any arbitration proceeding conducted subject to these provisions, the arbitrator is
specifically empowered to decide any question pertaining to limitations and may do so by documents or by a hearing, in his or her sole discretion. In this regard, the arbitrator may authorize the submission of pre-hearing motions similar to a motion
to dismiss or for summary adjudication for the purposes of considering such matter. The arbitrator’s decision will be final and binding upon the parties. The parties further agree to abide by and perform any award rendered by the arbitrator.
The prevailing party in such proceeding shall be entitled to record and have awarded its reasonable attorney’s fees, in addition to any other relief to which it may be entitled. Unless otherwise specified in this Agreement, ach party shall pay
its own fees and expenses in connection with any such arbitration proceeding. In rendering the award, the arbitrator shall state the reasons therefore, including any computations of actual damages or offsets, if applicable. 
  
 (b) Successors and Assigns: This Agreement will be binding upon
Seward’s heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors and its assigns. This Agreement will be binding upon the Company’s successors and assigns and will be for
the benefit of Seward’ heirs, executors, administrators and other legal representatives. 
  
 (c) Third-Party Beneficiaries: Seward and the Company acknowledge and agree that the terms of this Agreement, including but not limited to the releases of claims by Seward, will inure to the benefit of the
Company’s affiliated entities, owners, stockholders, agents, directors, officers, members, managers, partners, employees, insurers, representatives, lawyers, employee welfare benefit plans, pension plans and/or deferred compensation plans and
their trustees, administrators or other fiduciaries, the successors or assigns of any of the foregoing, and all persons acting by, through, under, or in concert with them, or any of them. 
  
 (d) Severability: Whenever possible, each provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law; but if any 
  

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 provision of this Agreement is prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such provision or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 
  
 (e) Headings and Construction: The headings in this Agreement are for convenience only and are not considered a part of or used in the construction
or interpretation of any provision of this Agreement. 
  
 (f)
Entire Agreement: The matters set forth in this Agreement constitute the sole and entire agreement between Seward and the Company and supersede all prior agreements (except as otherwise set forth herein), negotiations, and discussions between
the parties hereto and/or their respective counsel with respect to the subject matter hereof. No other representations, covenants, undertakings, or other prior or contemporaneous agreements, oral or written, regarding the matters set forth in this
Agreement shall be deemed to exist or bind any of the parties hereto. Each party understands and agrees that it has not relied on any statement or representation by the other party or any of its representatives in entering into this Agreement.

  
 (g) Amendment to This Agreement: Any amendment to this
Agreement must be writing and signed by duly authorized representatives of the parties hereto and stating of the intent of the parties to amend this Agreement. 
  

(h) Voluntary Execution: This Agreement has been entered into as a result of arms-length negotiations between Seward and the Company, and the
parties each represent that they are voluntarily executing this Agreement after an adequate opportunity to consult with counsel of their choosing regarding its meaning and effect. 
  
 (i) Execution in Counterparts: This Agreement may be executed in counterparts, including facsimile counterparts, with
the same force and effectiveness as if it were executed in one complete document. 
  
 IN WITNESS WHEREOF, the Company and Seward have executed and delivered this Agreement as of the date first written below. 
  

							
	AGREED:	 	 	 	 Hercules Drilling Company, LLC, d/b/a
 Hercules Drilling Company, a Delaware
 limited liability company

				
	 	 	 	 	By:	 	 /s/    Randall D. Stilley

	 	 	 	 	Name:	 	 Randall D. Stilley

	 	 	 	 	Date:	 	 October 4, 2005

  

 6 

			
	AGREED:	  	Thomas J. Seward II
		
	 	  	 /s/ Thomas J. Seward II

	 	  	Date: October 4, 2005

  

 7Separation Agreement dated April 13, 2004

 Exhibit 10.1 
  
 April 6, 2004 
  
 Martha J. Demski 
 Via Hand Delivery 
  
 Re: Separation Agreement 
  
 Dear Martha: 
  
 This letter sets forth the terms and conditions of our agreement (the “Agreement”) regarding the termination of your employment with Vical
Incorporated (the “Company”). This Separation Agreement shall be effective as specified in Section 13 below. 
  
 1. ADMINISTRATIVE LEAVE AND SEPARATION DATE. Effective at the close of business on
June 1, 2004 you will be placed on administrative leave, said leave to extend through June 1, 2006 (the “Leave Period”). During the Leave Period you will remain an employee of the Company and you will receive one-half of your
base salary in effect as of April 1, 2004, subject to standard deductions and withholdings and in accordance with the Company’s standard payroll practices. The Company will pay the cost of COBRA medical insurance coverage for you and your
family on the same terms as you currently enjoy until the earlier of (i) the expiration of the Leave Period, ii) the date on which you become employed by an entity or organization other than the Company that provides you with medical insurance,
or iii) the expiration of the COBRA insurance continuation coverage period as mandated by law. During the Leave Period, you will not have the authority to conduct or transact business on behalf of the Company or to authorize or approve any
expenditure by the Company. You agree that during the Leave Period you will not represent or hold yourself out as being able to bind the Company or transact or conduct business on its behalf. Likewise, you will be free to engage in other employment
or self-employment. You will not accrue any vacation or paid time off benefits during the Leave Period. Your employment will be terminated effective June 1, 2006 (the “Separation Date”). 
  
 2. ACCRUED VACATION PAYMENT. On
June 1, 2004 you will be paid all accrued, unused vacation or paid time off benefits, less standard deductions and withholdings, in accordance with the Company’s regular payroll practices. You are entitled to this payment regardless of
whether you execute this Agreement. 
  
 3. EXPENSE
REIMBURSEMENT. No later than July 15, 2004, you shall submit all final documented expense reimbursement statements reflecting all business expenses you incurred prior to June 2, 2004, if any, for which you seek
reimbursement. The Company shall reimburse your expenses pursuant to Company policy and its regular business practices. 

 4. STOCK OPTIONS. The several options to purchase common stock of the Company
previously granted to you (“the Options”) will continue to vest during the Leave Period, i.e., through June 1, 2006. Following the Separation Date, you will have a period of ninety (90) days from June 1, 2006 to exercise any
vested options. Such exercise will be governed by the terms of the applicable option or equity incentive plan(s), option agreement(s), and/or option grant notice(s). With respect to the options granted to you at the exercise price of three dollars
and eleven cents ($3.11) per share that are not vested as of June 1, 2006 (the “Unvested Options”), to the extent that the Unvested Options are in the money (i.e., the daily trading price at closing exceeds the exercise price) on
June 1, 2006, the Company will pay you the difference between the exercise price and the June 1, 2006 closing price in cash. (Example: 100 shares of options issued at an exercise price of $3.11 are unvested as of June 1, 2006. If the
closing price of the Company’s common stock on June 1, 2006 is $4.11, then the Company will pay you $100.00.) Effective June 1, 2006 the Unvested Options will consist of nine thousand three hundred seventy five (9,375) shares at
an exercise price of $3.11, as shown on the attached schedule. 
  
 5.
STOCK PURCHASE RIGHT. On or before June 1, 2004, you will be granted a right (the “Stock Purchase Right”) to purchase 8,000 shares of the Company’s Common Stock pursuant to
Section 6 of the Company’s Stock Incentive Plan (the “Plan”) at a purchase price equal to $.01 per share. The Stock Purchase Right will be granted pursuant to the terms and conditions set forth in a separate Stock Purchase
Agreement and the Company’s Stock Incentive Plan (the “Plan”). The Stock Purchase Right will be subject to equal quarterly vesting over a 2 year period beginning June 1, 2004. You may elect to delay the issuance of the shares
subject to the Stock Purchase Right by executing a Delayed Issuance Stock Purchase Agreement and related election form. If you have any questions about the tax implications of the Stock Purchase Right, please consult your personal tax advisor.

  
 6. OTHER COMPENSATION AND
BENEFITS. Except as expressly provided herein, you acknowledge and agree that you are not entitled to and will not receive any additional compensation, severance, stock options, stock, equity or equity rights, pay, vacation or
paid time off pay, or benefits from the Company. 
  
 7. RETURN
OF COMPANY PROPERTY. On or before June 1, 2004, you shall return to the Company all Company documents (and all copies thereof) and other Company property that you have had in your possession at
any time, including, but not limited to, Company files, notes, notebooks, memoranda, correspondence drawings, books and records, plans and forecasts, financial information, personnel information, sales and marketing information, research and
development information, specifications, computer-recorded information, tangible property, credit cards, entry cards, equipment, identification badges and keys, and any materials of any kind that contain or embody any proprietary or confidential
information of the Company (and all reproductions thereof). However, you may elect to purchase from the Company for $1.00 the notebook computer that the Company has made available to you, along with the peripherals associated with that computer;
provided that you permit the Company to remove from that computer all files containing Company information on or before June 1, 2004. 
  
 8. PROPRIETARY INFORMATION OBLIGATIONS. You hereby acknowledge that you have had access to confidential and
proprietary information and trade secrets of the Company in connection with your relationship therewith. You hereby acknowledge that such information 

 
includes, but is not limited to: (a) inventions, developments, designs, applications, improvements, trade secrets, formulae, know-how, methods or
processes, discoveries, techniques, plans, strategies and data (hereinafter “Inventions”); and (b) plans for research, development, new products, marketing and selling, information regarding business plans, budgets and unpublished
financial statements, licenses, prices and costs, information concerning potential and existing suppliers and customers and information regarding the skills and compensation of employees of the Company (collectively, with Inventions, hereinafter
referred to as “Proprietary Information”). In view of the foregoing, you hereby agree, warrant and acknowledge that: 
  
 (a) You will surrender and deliver to the Company no later than June 1, 2004 all documents, notes, laboratory notebooks, drawings,
specifications, calculations, sequences, data and other materials of any nature pertaining to your work with the Company, and any documents or data of any description (or any reproduction of any documents or data) containing or pertaining to any of
the foregoing Proprietary Information. 
  
 (b) You have
held and will continue to hold in confidence and trust all Proprietary Information and shall not use or disclose any Proprietary Information or anything related to such information without the prior written consent of the Company. 
  
 (c) You have assigned to the Company your entire right, title and
interest in and to any and all Inventions (and all proprietary rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made, conceived of, reduced to practice, or learned, by you, either alone or
jointly with others, during the course of your relationship with the Company. 
  
 (d) You will assist the Company in every proper way to obtain, and from time to time enforce, United States and foreign proprietary rights relating to Inventions in any and all countries. To that end you will
execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such proprietary
rights and the assignment thereof. In addition, you will execute, verify and deliver assignments of such proprietary rights to the Company or its designee. Your obligation to assist the Company with respect to proprietary rights relating to such
Inventions in any and all countries shall continue beyond the termination of your employment, but the Company shall compensate you at a reasonable rate after your termination for the time actually spent by you at the Company’s request on such
assistance. 
  
 (e) In the event the Company is unable for
any reason, after reasonable effort, to secure your signature on any document needed in connection with the actions specified in the preceding paragraph, you hereby irrevocably designates and appoints the Company and its duly authorized officers and
agents as your agents and attorneys in fact, which appointment is coupled with an interest, to act for and in your behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the
preceding paragraph with the same legal force and effect as if executed by you. You hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, which you now or may hereafter have for infringement of any proprietary
rights assigned hereunder to the Company. 

 (f) Your breach of the foregoing agreements and acknowledgments will result in unique and special
harm to the Company and therefore the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that the Company
may have for a breach of this Agreement. 
  
 (g) You
acknowledge your continuing obligation to comply with any proprietary information and inventions agreement (“PIIA”) between you and the Company, both before and after the Separation Date. You represent that you have not
violated and will not violate the PIIA prior to the Effective Date. 
  
 9.
NONDISPARAGEMENT. You agree that you will not at any time disparage the Company (including its officers, directors, employees, shareholders and agents), in any manner likely to be harmful to the Company or its business, business
reputation or personal reputation; provided that you shall respond accurately and fully to any questions, inquiry or request for information when required by legal process. The Company agrees that it will not at any time disparage you in any manner
likely to be harmful to you or your reputation; provided that it shall respond accurately and fully to any questions, inquiry or request for information when required by legal process. 
  
 10. CONFIDENTIALITY. The provisions of this Agreement shall be held in strictest confidence and shall not be
publicized or disclosed in any manner whatsoever. Notwithstanding the prohibition in the preceding sentence: (a) you may disclose this Agreement, in confidence, to your immediate family; (b) the parties may disclose this Agreement in
confidence to their attorneys, accountants, auditors, tax preparers, and financial advisors; and (c) the Company may disclose this Agreement as necessary to complete any sale transaction and to comply with any reporting requirements; and
(d) the parties may disclose this Agreement insofar as such disclosure may be necessary to enforce its terms or as otherwise required by law. 
  
 11. PUBLIC ANNOUNCEMENT. Before June 1, 2004, the Company will publish a public announcement regarding your departure which will
explain that you are leaving and taking a sabbatical and then will pursue other interests, said announcement to be in a form mutually agreed between you and the Company. 
  
 12. RELEASE OF CLAIMS. In exchange for the promises and covenants set forth herein, you
hereby release, acquit, and forever discharge the Company, its parents and subsidiaries, and their officers, directors, agents, servants, employees, attorneys, shareholders, partners, successors, assigns, affiliates, customers, and clients of and
from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys’ fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected,
disclosed and undisclosed, arising out of or in any way related to agreements, acts, or conduct at any time prior to the Effective Date, including, but not limited to: all such claims and demands directly or indirectly arising out of or in any way
connected with your employment with the Company, the termination of that employment, and the Company’s performance of its obligations as your former employer; claims or demands related to salary, bonuses, commissions, stock, stock options, the
issuance or re-purchase of restricted stock, put rights, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any form of compensation; claims pursuant to any federal, state or
local law or 

 
cause of action including, but not limited to, the California Fair Employment and Housing Act; the federal Civil Rights Act of 1964, as amended; the federal
Age Discrimination in Employment Act (“ADEA”), as amended; the federal Americans With Disabilities Act; the Employee Retirement Income Security Act; tort law; contract law; wrongful discharge; discrimination; harassment;
fraud; defamation; emotional distress; and breach of the implied covenant of good faith and fair dealing. However, you will not be required to release any right to indemnification that you may have under applicable law, the Company’s bylaws or
the indemnification agreement between you and the Company. 
  
 13. ADEA.
You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you may have under ADEA. You also acknowledge that the consideration given for your waivers in this Agreement is in addition to anything of value to which you
were already entitled. You are advised by this writing, as required by the ADEA that: (a) your waiver and release do not apply to any claims that may arise after you sign this Agreement; (b) you should consult with an attorney prior to
executing this release; (c) you have twenty-one (21) days within which to consider this release (although you may choose to voluntarily execute this release earlier); (d) you have seven (7) days following the execution of this
release to revoke the Agreement; and (e) this Agreement will not be effective until the date upon which the revocation period has expired, which will be the eighth day after this Agreement has been signed both by you and by the Company (the
“Effective Date”). 
  
 14.
SECTION 1542 WAIVER. In giving the releases herein, which includes claims which may be unknown to you at present, you acknowledge that you have read and understand Section 1542 of the Civil Code of the
State of California which reads as follows: 
  
 A general
release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. 
  
 You hereby expressly waive and relinquish all rights and benefits under this section and any
law or legal principle of similar effect in any jurisdiction with respect to claims released hereby. 
  
 15. NO ADMISSIONS. The parties hereto hereby acknowledge that this is a compromise settlement of various matters, and it shall not be construed to be an admission of any liability
or obligation by either party to the other party or to any other person whomsoever. 
  
 16. ARBITRATION. To ensure rapid and economical resolution of any disputes which may arise under this Agreement, you and the Company agree that any and all disputes or controversies of any nature whatsoever, arising
from or regarding the interpretation, performance, enforcement or breach of this Agreement shall be resolved by confidential, final and binding arbitration (rather than trial by jury or court or resolution in some other forum). Any arbitration
proceeding pursuant to this Agreement shall be conducted by the Judicial Arbitration and Mediation Service (“JAMS”) in San Diego, California, under the then-existing JAMS’ rules. 
  
 17. ENTIRE AGREEMENT. This Agreement, including all
exhibits, constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to the subject matter hereof. This Agreement is entered into without reliance on any 

 
promise or representation, written or oral, other than those expressly contained herein, and supercedes any such promises or representations. This Agreement
may not be modified except in a writing signed by you and a duly authorized officer of the Company. Each party has carefully read this Agreement, has been afforded the opportunity to be advised of its meaning and consequences by his or its
respective attorneys, and signed the same of his or its free will. 
  
 18.
SUCCESSORS AND ASSIGNS. This Agreement shall bind the heirs, personal representatives, successors, assigns, executors, and administrators of each party, and inures to the benefit of each party, its
agents, directors, officers, employees, servants, heirs, successors and assigns. 
  
 19. APPLICABLE LAW. This Agreement shall be deemed to have been entered into and shall be construed and enforced in accordance with the laws of the State of California as applied to contracts made and to
be performed entirely within California. 
  
 20. SEVERABILITY.
If a court, arbitrator, or other authority of competent jurisdiction determines that any term or provision of this Agreement is invalid or unenforceable, in whole or in part, then the remaining terms and provisions hereof shall be unimpaired,
and the invalid or unenforceable term or provision shall be replaced with a valid and enforceable term or provision that most accurately represents the parties’ intention with respect to the invalid or unenforceable term or provision.

  
 21. AUTHORITY. You warrant and represent that there are
no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein and that you are duly authorized to give the release granted herein. 
  
 22. COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original, all of which together shall constitute one and the same instrument. 
  
 23. SECTION HEADINGS. The section and paragraph headings contained in this Separation Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. 
  
 Sincerely, 
  

	
	VICAL INCORPORATED
	
	 /s/ Vijay B. Samant

	 Vijay B. Samant

	 President and Chief Executive Officer

  
 HAVING
READ AND UNDERSTOOD THE FOREGOING, I HEREBY AGREE TO THE TERMS AND
CONDITIONS STATED ABOVE. 
  

					
			
	 /s/ Martha J. Demski
	 	 	 	Dated: April 13, 2004
	MARTHA J. DEMSKI

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