Ionis Pharmaceuticals (IONS) 10-K2022 FY Annual report

Section 1.1          Definitions. As used in this Agreement, the following terms shall have the following meanings:

Section 1.2          Certain Interpretations. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement:

(a)          “either” and “or” are not exclusive and “include,” “includes” and “including” are not limiting and shall be deemed to be followed by the words “without limitation;”

(b)          “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if;”

(c)          “hereof,” “hereto,” “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement;

(d)          references to a Person are also to its permitted successors and assigns;

(e)          definitions are applicable to the singular as well as the plural forms of such terms;

(f)          unless otherwise indicated, references to an “Article”, “Section” or “Exhibit” refer to an Article or Section of, or an Exhibit to, this Agreement, and references to a “Schedule” refer to the corresponding part of the Disclosure Schedule;

(g)          references to “$” or otherwise to dollar amounts refer to the lawful currency of the United States and all payments under this Agreement shall be made in immediately available funds;

(h)          provisions referring to matters that would or could have, or would or could reasonably be expected to have, or similar phrases, shall be deemed to have such result or expectation with or without the giving of notice or the passage of time, or both;

(i)          references to a law include any amendment or modification to such law and any rules and regulations issued thereunder, whether such amendment or modification is made, or issuance of such rules and regulations occurs, before or after the date of this Agreement.

(j)          for covenants that are to be undertaken “reasonably,” such actions (or inactions) shall take into account Buyer’s economic interest in the Royalty and the impact of the applicable action (or inaction) on such interest.

Section 1.3          Headings. The table of contents and the descriptive headings of the several Articles and Sections of this Agreement and the Exhibits and Schedules are for convenience only, do not constitute a part of this Agreement and shall not control or affect, in any way, the meaning or interpretation of this Agreement.

Section 2.1          Closing; Purchase Price.

(a)          Upon the terms and subject to the conditions of this Agreement, at the Closing, the Seller shall, and shall cause Akcea to, and Akcea shall, sell, transfer, assign and convey to the Buyer, and the Buyer shall purchase, acquire and accept from the Seller, free and clear of all Liens, all of the Seller’s, or Akcea’s, as applicable, right, title and interest in and to the Purchased Royalty Payments. The purchase price to be paid at the Closing to the Seller for such sale, transfer, assignment and conveyance is the Initial Purchase Price. At the Closing, the Buyer shall pay the Seller the Initial Purchase Price by wire transfer to one or more accounts specified by the Seller on Exhibit A.

(c)          Each party hereto hereby agrees and acknowledges that: (i) the Additional Purchase Price Payments are contingent payment obligations of the Buyer and there can be no assurance regarding the occurrence of any of the Payment Triggering Events and (ii) the Buyer shall have no obligation or liability with respect to any Additional Purchase Price Payment unless and until the corresponding Payment Triggering Event has occurred.

(d)          The Seller shall notify the Buyer promptly following the achievement of any Payment Triggering Event, and the Buyer shall pay the corresponding Additional Purchase Price Payment to the Seller within [***] Business Days following such notice (except in the case of Payment Triggering Event #5, which shall be paid within [***] Business Days of the date of [***].

(e)          Each party hereto further agrees and acknowledges that the other party shall have the right to offset any Agreed Amounts or Losses resolved pursuant to a final and unappealable ruling in accordance with the provisions of Section 9.8 owed by such party to the other party hereunder. In addition, in the event that a court of competent jurisdiction makes a final and unappealable ruling in accordance with the provisions of Section 9.8 that the Buyer has breached this Agreement by failing to pay any Additional Purchase Price Payment when due, the Seller shall have a right to recoup such Additional Purchase Price Payment not paid by Buyer, together with any late fee in respect thereof in accordance with Section 5.4, from the Purchased Royalty Payments. For the avoidance of doubt, this Agreement (including all agreements, schedules and exhibits hereto and the documents and instruments referred to herein that are to be delivered at the Closing Date) shall constitute a “single integrated agreement” and the transactions contemplated thereby shall constitute a “single integrated transaction” in each case for purposes of recoupment.

(f)          Subject to Section 2.1(e), any Additional Purchase Price Payment owed to the Seller by the Buyer in accordance with Section 2.1(b) shall be paid to the Seller by wire transfer to the account(s) specified by the Seller on Exhibit A (or such other account(s) as specified by the Seller in a writing delivered to the Buyer in accordance with Section 9.1). The parties hereto further agree that: (i) the aggregate Additional Purchase Price Payments payable by the Buyer hereunder shall not exceed $625,000,000 and (ii) the total Purchase Price payable to the Seller by the Buyer hereunder (inclusive of the Initial Purchase Price and, if required to be paid under this Agreement, all of the Additional Purchase Price Payments) shall in no event exceed $1,125,000,000 in the aggregate.

Section 2.2          No Assumed Obligations, Etc. Notwithstanding any provision in this Agreement to the contrary, the Buyer is purchasing, acquiring and accepting only the Purchased Royalty Payments, and is not assuming any liability or obligation of the Seller or Akcea of whatever nature, whether presently in existence or arising or asserted hereafter, under the License Agreements or otherwise. Except as specifically set forth herein in respect of the Purchased Royalty Payments purchased, acquired and accepted hereunder, the Buyer does not, by such purchase, acquisition and acceptance, acquire any other contract rights of the Seller or Akcea under the License Agreements or otherwise or any other assets of the Seller or Akcea.

Section 2.3          True Sale. It is the intention of the parties hereto that the sale, transfer, assignment and conveyance contemplated by this Agreement be, and is, a true, complete, absolute and irrevocable sale, transfer, assignment and conveyance by the Seller and Akcea to the Buyer of all of the Seller’s, and Akcea’s (as applicable) rights, title and interests in and to the Purchased Royalty Payments and the Seller relinquishes all title and control over the Purchased Royalty Payments upon such sale, transfer, assignment and conveyance. None of the Seller, Akcea or the Buyer intends the transactions contemplated by this Agreement to be, or for any purpose characterized as, a loan from the Buyer to the Seller or Akcea (as applicable) or to any of the Seller’s or Akcea’s Affiliates, or a pledge, a security interest, a financing transaction or a borrowing. It is the intention of the parties hereto that the beneficial interest in and title to the Purchased Royalty Payments and any “proceeds” (as defined in the UCC) thereof shall not be part of the Seller’s or Akcea’s estates in the event of the filing of a petition by or against the Seller under any Bankruptcy Laws.  Each of the Seller, Akcea and the Buyer hereby waives, to the maximum extent permitted by applicable law, any right to contest or otherwise assert that the sale contemplated by this Agreement does not constitute a true, complete, absolute and irrevocable sale, transfer, assignment and conveyance by the Seller and Akcea to the Buyer of all of the Seller’s and Akcea’s right, title and interest in and to the Purchased Royalty Payments under applicable law, which waiver shall, to the maximum extent permitted by applicable law, be enforceable against the Seller or Akcea (as applicable) in any bankruptcy or insolvency proceeding relating to the Seller or Akcea or either of their subsidiaries. Accordingly, the Seller and Akcea shall treat the sale, transfer, assignment and conveyance of the Purchased Royalty Payments as a sale of an “account” or a “payment intangible” (as appropriate) in accordance with the UCC, and the Seller and Akcea each hereby authorizes the Buyer to file financing statements (and continuation statements with respect to such financing statements when applicable) naming the Seller and Akcea (as applicable) as the debtor and the Buyer as the secured party in respect of the Purchased Royalty Payments. Not in derogation of the foregoing statement of the intent of the parties hereto in this regard, and for the purposes of providing additional assurance to the Buyer in the event that, despite the intent of the parties hereto, the sale, transfer, assignment and conveyance contemplated hereby is hereafter held not to be a sale, each of the Seller and Akcea does hereby grant to the Buyer a security interest in and to all right, title and interest of the Seller or Akcea (as applicable), in, to and under the Purchased Royalty Payments and any “proceeds” (as defined in the UCC) thereof as security for all of the Seller’s and Akcea’s obligations hereunder, including the payment of the Purchased Royalty Payments, and each of the Seller and Akcea does hereby authorize the Buyer, from and after the Closing, to file such financing statements (and continuation statements with respect to such financing statements when applicable) in such manner and such jurisdictions as are necessary or appropriate to perfect such security interest.  At such time as the Buyer receives zero percent (0%) of the SMA Royalties after the total amount of Purchased SMA Royalty Payments actually received by the Buyer hereunder equals the applicable SMA Royalty Cap, the security interest granted pursuant to the immediately preceding sentence as it relates to the Purchased SMA Royalty Payments shall be released and the Buyer shall, at the request and sole expense of the Seller, execute and deliver to the Seller all releases and other documents reasonably necessary or advisable for the release of the Liens against the Purchased SMA Royalty Payments, including the filing of amendments to any UCC financing statements against the Seller to evidence such termination.

Section 3.1          Closings; Payment of Purchase Price.The purchase and sale of the Purchased Royalty Payments shall take place remotely via the exchange of documents and signatures on the date hereof or such other place, time and date as the parties hereto may mutually agree (the “Closing”). At the Closing, the Buyer shall deliver (or cause to be delivered) payment of the Initial Purchase Price to the Seller by wire transfer to one or more accounts specified by the Seller on Exhibit A.

Section 3.3          [Reserved].

Section 3.4          Escrow Agreement. Within [***] Business Days following the Closing, the Buyer, the Seller and Akcea shall execute and deliver the Escrow Agreement to the Escrow Agent.

Section 3.5          Form W-9. At the Closing, the Seller shall deliver to the Buyer a valid, properly executed IRS Form W-9 certifying that the Seller is exempt from U.S. federal withholding tax and “backup” withholding tax.

Section 3.6          Form W-8BEN-E. At the Closing, the Buyer shall deliver to the Seller a valid, properly executed IRS Form W-8BEN-E certifying that the Buyer is exempt from U.S. federal withholding tax with respect to any and all Purchased Royalty Payments.

Section 3.7          Data Room. The Seller shall have delivered to the Buyer an electronic copy of all of the information and documents posted to the virtual data room established by the Seller as of the date hereof and made available to the Buyer via Firmex (the “Data Room”) for archival purposes only.

Section 3.8          Bilateral Common Interest Agreement. At the Closing each of the Seller and the Buyer shall execute and deliver to the other party hereto the Bilateral Common Interest Agreement.

Section 4.1          Seller’s Representations and Warranties. Except as set forth in the Disclosure Schedule, the Seller represents and warrants to the Buyer that as of the Closing Date:

(a)          Existence; Good Standing. Each of Akcea and the Seller is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware. Each of Akcea and the Seller is duly licensed or qualified to do business and is in corporate good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned, leased or operated by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified and in corporate good standing has not and would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

(b)          Authorization. Each of the Seller and Akcea has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of each of the Seller and Akcea.

(c)          Enforceability. The Agreement has been duly executed and delivered and constitutes a valid and binding obligation of each of the Seller and Akcea enforceable against the Seller and Akcea in accordance with its terms, except as such enforceability may be limited by applicable Bankruptcy Laws or general principles of equity (whether considered in a proceeding in equity or at law).

(d)          No Conflicts. The execution, delivery and performance by the Seller or Akcea of this Agreement and the consummation of the transactions contemplated hereby do not and shall not (i) contravene or conflict with the organizational documents of the Seller or Akcea, (ii) contravene or conflict with or constitute a material default under any law or Judgment binding upon or applicable to the Seller or Akcea, (iii) contravene or conflict with or constitute a default under any of the License Agreements or under any of the Upstream Licenses or (iv) contravene or conflict with or constitute a default under any other material contract or material agreement binding upon or applicable to the Seller or Akcea.

(e)          Consents. Except for filings required by the federal securities laws or stock exchange rules, no consent, approval, license, order, authorization, registration, declaration or filing with or of any Governmental Entity or other Person is required to be done or obtained by the Seller in connection with (i) the execution and delivery by the Seller of this Agreement, (ii) the performance by the Seller of its obligations under this Agreement or (iii) the consummation by the Seller of any of the transactions contemplated by this Agreement.

(f)          No Litigation. There is no action, suit, claim, investigation or proceeding pending or, to the Knowledge of the Seller, threatened, including before any Governmental Entity, against or involving the Seller or any of its Affiliates, or any of their respective properties or assets that, individually or in the aggregate, would be reasonably be expected to result in a Material Adverse Effect or which questions the validity of this Agreement or the transactions contemplated hereby or any action taken or to be taken pursuant hereto.

(g)          Compliance with Laws. Neither the Seller nor any of its Affiliates is in violation of, and to the Knowledge of the Seller, neither the Seller nor any of its Affiliates is under investigation with respect to nor has the Seller or any of its Affiliates been threatened in writing to be charged with or given written notice of any violation of, any law or Judgment applicable to the Seller or any of its Affiliates, which violation would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

(h)          [Reserved.]

(i)          License Agreements. Attached hereto as Exhibit D-1, D-2, D-3, D-4, D-5, D-6 D-7, and D-8 is a true, correct and complete copy of the 2012 Biogen License, 2017 Biogen License, Novartis License, the UMass License, the Cold Spring Harbor License, the Intercompany License, the Consent Letter, and the Alnylam License respectively. The Seller has delivered to the Buyer via the Data Room true, correct and complete copies of all License Correspondence.

(j)          Title to Royalty. The Seller has good and marketable title to each of the BIIB-115 Royalty, Spinraza Royalty and Pelacarsen Royalty, free and clear of all Liens except for Permitted Liens. Upon payment of the Initial Purchase Price by the Buyer, the Buyer will acquire, subject to the terms and conditions set forth in this Agreement and the License Agreements, good and marketable title to the Purchased Royalty Payments, free and clear of all Liens (other than Liens created, permitted or required by this Agreement in favor of the Buyer or its Affiliates).

(k)          Intellectual Property.

(l)          UCC Representation and Warranties. (i) The Seller’s exact legal name is, and, since December 18, 2015, has been, “Ionis Pharmaceuticals, Inc.”, and, since its incorporation until and including December 17, 2015, the Seller’s exact legal name was, “Isis Pharmaceuticals, Inc.” and (ii) Akcea’s exact legal name is, and, since October 12, 2020, has been, “Akcea Therapeutics, Inc.” The Seller is, and for the prior ten (10) years has been, and Akcea is, and for the prior two (2) years has been incorporated in Delaware.

(m)         Brokers’ Fees. Except for Cowen Inc., there is no investment banker, broker, finder, financial advisor or other intermediary who has been retained by or is authorized to act on behalf of the Seller who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

(n)          Taxes. The Seller has not received written notice from any Licensee, and is not otherwise aware, of any intention to withhold or deduct any tax from future payments to the Seller or Akcea. There are no audits or investigations (and the Seller has not been informed or notified of any pending audits or investigations by any tax authority) with respect to any payment made to the Seller or Akcea under any of the License Agreements that would reasonably be expected to have a Material Adverse Effect. To the knowledge of the Seller, none of the License Agreements are treated as a partnership for U.S. tax purposes and the Seller has never taken the position for U.S. federal income or other tax purposes that any of the License Agreements are treated as such. The Seller has never received a K-1 or other U.S. tax form furnished to a partner in a partnership as a result of being a party to any of the License Agreements.

Section 4.2          The Buyer’s Representations and Warranties. The Buyer represents and warrants to the Seller that as of the Closing Date:

(a)          Existence; Good Standing. The Buyer is an Irish collective asset-management vehicle that is duly organized, validly existing and in good standing under the laws of the Republic of Ireland.

(b)          Authorization. The Buyer has the requisite right, power and authority to execute, deliver and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary action on the part of the Buyer.

(c)          Enforceability. This Agreement has been duly executed and delivered by an authorized person of the owner trustee of the Buyer and constitutes the valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms, except as may be limited by applicable Bankruptcy Laws or by general principles of equity (whether considered in a proceeding in equity or at law).

(d)          No Conflicts. The execution, delivery and performance by the Buyer of this Agreement do not and shall not (i) contravene or conflict with the organizational documents of the Buyer, (ii) contravene or conflict with or constitute a default under any material provision of any law binding upon or applicable to the Buyer or (iii) contravene or conflict with or constitute a default under any material contract or other material agreement or Judgment binding upon or applicable to the Buyer.

(e)          Consents. Other than the filing of financing statement(s) in accordance with Section 2.3 or filings required by federal securities laws or stock exchange rules, no consent, approval, license, order, authorization, registration, declaration or filing with or of any Governmental Entity or other Person is required to be done or obtained by the Buyer in connection with (i) the execution and delivery by the Buyer of this Agreement, (ii) the performance by the Buyer of its obligations under this Agreement, or (iii) the consummation by the Buyer of any of the transactions contemplated by this Agreement.

(f)          No Litigation. There is no action, suit, investigation or proceeding pending or, to the knowledge of the Buyer, threatened before any Governmental Entity to which the Buyer is a party that would, if determined adversely, reasonably be expected to prevent or materially and adversely affect the ability of the Buyer to perform its obligations under this Agreement.

(g)          Financing. The Buyer has sufficient cash on hand to pay the Purchase Price. The Buyer acknowledges that its obligations under this Agreement are not contingent on obtaining financing.

(h)          Brokers’ Fees. There is no investment banker, broker, finder, financial advisor or other intermediary who has been retained by or is authorized to act on behalf of the Buyer who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

Section 4.3          No Implied Representations and Warranties. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4.1, THE SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AT LAW OR IN EQUITY, INCLUDING WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND ANY SUCH REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. THE BUYER ACKNOWLEDGES THAT, EXCEPT AS SPECIFICALLY PROVIDED IN THIS ARTICLE 4 AND THE DISCLOSURE SCHEDULES, THE SELLER HAS ASSUMED NO RESPONSIBILITIES OF ANY KIND WITH RESPECT TO ANY ACT OR OMISSION OF ANY LICENSEE WITH RESPECT TO THE DESIGN, DEVELOPMENT, MANUFACTURE, USE, SALE, DISTRIBUTION, MARKETING OR OTHER ACTIVITIES OF SUCH LICENSEE WITH RESPECT TO ANY OF THE ROYALTY PRODUCTS.

Section 5.1          Disclosures. Except for a press release previously approved in form and substance by the Seller and the Buyer or any other public announcement using substantially the same text as such press release or any other public disclosure permitted under this Agreement following the Closing, neither the Buyer nor the Seller shall, and each party hereto shall cause its respective Representatives, Affiliates and Affiliates’ Representatives not to, issue a press release or other public announcement or otherwise make any public disclosure with respect to this Agreement or the subject matter hereof without the prior written consent of the other party hereto (which consent shall not be unreasonably withheld, conditioned or delayed), except as may be required by applicable law or stock exchange rule (in which case the party hereto required to make the press release or other public announcement or disclosure shall allow the other party hereto reasonable time to comment on such press release or other public announcement or disclosure in advance of such issuance and consider in good faith any comments provided by the other party on such proposed disclosure); provided that neither the Seller nor the Buyer shall be required to provide the other party the opportunity to review and comment on any disclosure required by applicable law or stock exchange rule relating to the accounting or tax treatment of the transactions contemplated hereby, so long as such disclosure is not inconsistent with Section 5.18.

Section 5.2          Payments Received In Error.

(a)          Without limiting Section 2.1(e), commencing on the Closing Date and at all times thereafter, if any payment of any portion of the Purchased Royalty Payments is made to the Seller (or to any of the Seller’s Affiliates or designees), the Seller shall pay such amount to the Buyer or the Escrow Agent, promptly (and in any event within [***] Business Days) after the receipt thereof, by wire transfer to the Escrow Account or an account designated in writing by the Buyer. The Seller shall notify the Buyer of such wire transfer and provide reasonable details regarding the Purchased Royalty Payments so received by the Seller. Without limiting Section 2.1(e), the Seller agrees that, in the event any Purchased Royalty Payments is paid to the Seller, the Seller shall (i) until paid to the Buyer or Escrow Agent, hold such payment received in trust for the benefit of the Buyer and (ii) have no right, title or interest in such payment and that it shall not pledge or otherwise grant any security interest therein.

(b)          Without limiting Section 2.1(e), commencing on the Closing Date and at all times thereafter, if any payment due under the License Agreements that does not constitute any Purchased Royalty Payments is made to the Buyer, the Buyer shall pay such amount to the Seller or the Escrow Agent, promptly (and in any event within [***] Business Days) after the receipt thereof, by wire transfer to the Escrow Account or an account designated in writing by the Seller. The Buyer shall notify the Seller of such wire transfer and provide reasonable details regarding the erroneous payment so received by the Buyer.  Without limiting Section 2.1(e), the Buyer agrees that, in the event any payment due under the License Agreements that does not constitute Purchased Royalty Payments is paid to the Buyer, the Buyer shall (i) until paid to the Seller or Escrow Agent, hold such payment received in trust for the benefit of the Seller and (ii) have no right, title or interest in such payment and that it shall not pledge or otherwise grant any security interest therein.

Section 5.3          Royalty Reduction. If any Licensee exercises a Royalty Reduction (other than a Permitted Reduction) or Set-Off against any portion of the Purchased Royalty Payments, then the Seller shall promptly (and in any event within[***] Business Days following the payment of the Royalty affected by such Royalty Reduction or Set-Off) make a true-up payment to the Buyer such that the Buyer receives the full amount of such Purchased Royalty Payments that would have been payable to the Buyer had such Royalty Reduction or Set-Off not occurred. Notwithstanding anything to the contrary herein, to the extent Seller shall have made a true-up payment to the Buyer pursuant to this Section 5.3 in respect of any such Royalty Reduction or Set-Off, any subsequent payments received from a Licensee in respect, and to the extent, of such Royalty Reduction or Set-Off, whether pursuant to Section 10.4.4 of the 2012 Biogen License, Section 10.4.5 of the 2017 Biogen License or otherwise, shall not be considered a Purchased Royalty Payment.

Section 5.4          Late Fee.A late fee of [***]% over the Prime Rate shall accrue on all unpaid amounts on an annualized basis with respect to any sum that is otherwise payable by the Buyer or by the Seller to the other party under this Agreement.

Section 5.5          Royalty Reports; Notices and Other Information from Licensees.

Section 5.6          Notices and Other Information to Licensee.

(a)          So long as no SMA RP Control Shift has occurred and is continuing, the Seller shall (i) send to the Buyer a copy of any Material Correspondence that the Seller proposes to deliver to Biogen or any of its Affiliates, at least [***] Business Days prior to the proposed date for providing such Material Correspondence, (ii) consult with and consider in good faith any comments or requests from the Buyer regarding such proposed Material Correspondence,  (iii) thereafter act reasonably regarding such Material Correspondence and matters related thereto and (iv) in no event, except as required to comply with the terms of this Agreement or the 2012 Biogen License or the 2017 Biogen License, as the case may be, send any Material Correspondence to Biogen that would reasonably be expected to result in a Material Adverse Effect (it being understood that the occurrence of a Material Adverse Effect may be the subject of, or trigger the Seller’s sending of, such correspondence).  [***]

(b)          So long as no Pelacarsen RP Control Shift has occurred and is continuing, the Seller shall (and shall cause Akcea to) (i) send to the Buyer a copy of any Material Correspondence that the Seller or Akcea proposes to deliver to Novartis or any of its Affiliates, at least [***] Business Days prior to the proposed date for providing such Material Correspondence, (ii) consult with and consider in good faith any comments or requests from the Buyer regarding such proposed Material Correspondence, (iii) thereafter act reasonably regarding such Material Correspondence matters related thereto and (iv) in no event, except as required to comply with the terms of this Agreement or the Novartis License, send any Material Correspondence to Novartis that would reasonably be expected to result in a Material Adverse Effect (it being understood that the occurrence of a Material Adverse Effect may be the subject of, or trigger the Seller’s (or Akcea’s) sending of, such correspondence). [***]

Section 5.7          Inspections and Audits of Licensee.  If either party desires to cause an inspection as provided under Section 6.10 of the 2012 Biogen License, Section 6.10 of the 2017 Biogen License, or Section 7.12 of the Novartis License, for the Purchased Royalty Payments due and payable after the Closing Date then the Seller and the Buyer agree to consult in good faith with each other in connection therewith.  Following such consultation, the Seller may, or if requested by the Buyer, shall (and shall cause Akcea to, as applicable), promptly provide written notice to Biogen or Novartis, as applicable, to cause such an inspection.  With respect to any such inspection or audit required by the Buyer, the Seller shall (and shall cause Akcea to, as applicable), for purposes of Section 6.10 of the 2012 Biogen License, Section 6.10 of the 2017 Biogen License, or Section 7.12 of the Novartis License, as applicable, select Deloitte & Touche LLP or such other independent public accounting firm as reasonably designated by the Buyer for such purpose (as long as, in the case of an audit pursuant to Section 7.12 of the Novartis License, such independent certified public accountant is reasonably acceptable to Novartis).  The Buyer shall be responsible for the expense of any inspection or audit that would otherwise be borne by (and that were actually incurred by) the Seller pursuant to the 2012 Biogen License or 2017 Biogen License only if such inspection or audit is undertaken at the Buyer’s request, and the Seller shall otherwise be responsible for all such expenses.  The Buyer shall be responsible for the expense of any inspection or audit that would otherwise be borne by (and that were actually incurred by) the Seller or Akcea pursuant to the Novartis License only if such inspection or audit is undertaken at the Buyer’s request, and the Seller or Akcea shall otherwise be responsible for all such expenses. For the avoidance of doubt, nothing in this section shall obligate the Seller to exercise any inspection or audit that is not otherwise permitted under Section 6.10 of the 2012 Biogen License, Section 6.10 of the 2017 Biogen License, or Section 7.12 of the Novartis License.

Section 5.8          Amendment of License Agreement.

(a)          If the Seller proposes to amend, modify, provide a consent or waiver, or otherwise to take any action under the 2012 Biogen License or the 2017 Biogen License, so long as no SMA RP Control Shift has occurred and is continuing, the Seller shall (i) send to the Buyer a copy of any such proposed amendment, modification, consent, or waiver, or a description of such any other action that the Seller intends to take under the 2012 Biogen License or the 2017 Biogen License, at least [***] Business Days prior to the proposed date for providing such document to Biogen or taking such action, (ii) consult with the Buyer regarding such document or action and consider any comments and requests from the Buyer regarding such document or action in good faith, (iii) thereafter act reasonably regarding such document or action and matters related thereto and (iv) in no event take any such action that would reasonably be expected to result in a Material Adverse Effect; provided that for any informal or ordinary course consent or other action that the Seller intends to take under the 2012 Biogen License or the 2017 Biogen License, clauses (i) and (ii) above shall apply solely to such consent or other action relates to the SMA Royalties or would reasonably be expected to have a Material Adverse Effect.  [***]

(b)          If the Seller proposes to amend, modify, provide a consent or waiver, or otherwise to take any action under the Novartis License, so long as no Pelacarsen RP Control Shift has occurred and is continuing, the Seller shall (and shall cause Akcea to) (i) send to the Buyer a copy of any such proposed amendment, modification, consent, notice or waiver, or a description of such any other action that the Seller or Akcea intends to take under the Novartis License, at least [***] Business Days prior to the proposed date for providing such document to Novartis or taking such action, (ii) consult with the Buyer regarding such document or action, and consider any comments and requests from the Buyer regarding such document or action in good faith, (iii) thereafter act reasonably regarding such document or action and matters related thereto and (iv) in no event take any such action (or fail to take any action) that would reasonably be expected to result in a Material Adverse Effect; provided that for any informal or ordinary course consent or other action that the Seller intends to take under the Novartis License, clauses (i) and (ii) above shall apply solely to such consent or other action relates to the Pelacarsen Royalty or would reasonably be expected to have a Material Adverse Effect.  [***]

(c)          Subject to the foregoing, promptly, and in any event within [***] Business Days, following receipt by the Seller (or Akcea) of any final amendment, modification, supplement or restatement of any License Agreement, the Seller shall furnish a copy of the same to the Buyer.

Section 5.9          Maintenance of License Agreement.

(d)  [***]

(e)  [***]

Section 5.10        Enforcement of License Agreements.

(a)          Notice of Breaches by Licensee. Promptly (and in any event within [***] Business Days) after the Seller or Akcea becomes aware of, or comes to believe in good faith that there has been a material breach of any License Agreement by Biogen or Novartis, as the case may be, the Seller shall provide notice of such breach to the Buyer.

(b)          Enforcement of License Agreement.

(c)          Allocation of Proceeds and Costs of Enforcement. The Buyer shall reimburse the Seller (and if applicable, Akcea) for (i) as it relates to enforcement of Biogen’s obligations, for the period prior to January 1, 2028, 25%, and commencing January 1, 2028, 45%, and (ii) as it relates to enforcement of Novartis’ obligations, 25%, of all fees and expenses incurred in enforcing Biogen’s obligations or Novartis’ obligations, as the case may be, under any License Agreement pursuant to this Section 5.10, as such costs and expenses are incurred, in connection with any actions taken or exercise of rights and remedies by the Seller. The Proceeds resulting from any enforcement of Biogen’s obligations or Novartis’ obligations, as the case may be, under any License Agreement shall be applied first to reimburse the Seller and the Buyer for any reasonable and documented expenses incurred by them in connection with such enforcement, with the remainder of the Proceeds distributed (i) to the Buyer (A) as it relates to a breach by Biogen, for the period prior to January 1, 2028, 25%, and commencing January 1, 2028, 45%, and (ii) as it relates to a breach by Novartis, 25%, and (ii) to the Seller for all remaining Proceeds. Each of the Seller and Akcea hereby assigns and, if not presently assignable, agrees to assign to the Buyer, the amount of Proceeds due to the Buyer in accordance with this Section 5.10(c).

Section 5.11         [***]

Section 5.12        [***]

Section 5.13        Preservation of Rights; No Material Adverse Effect. Notwithstanding anything in this Agreement to the contrary but except as permitted under Section 9.3, the Seller shall not (i) impose or grant a Lien upon, or otherwise sell, transfer, hypothecate, assign, convey title (in whole or in part), grant any right to, or otherwise dispose of any portion of any Purchased Royalty Payments or any “proceeds” (as defined in the UCC) thereof, or (ii) enter into or deliver any Contracts (or make or propose any amendments, modifications waivers or notices in connection with any contracts or arrangements) related to the Royalty, solely with respect to this clause (ii) that would, individually or in the aggregate reasonably be expected to result in a Material Adverse Effect or otherwise take any action or fail to act with the specific intention to undermine the Royalty.

Section 5.14        Enforcement; Defense; Prosecution and Maintenance.

(a)          The Buyer and the Seller shall promptly inform each other of any suspected infringement by a Third Party they become aware of with respect to any of the Spinraza Licensed Patents, BIIB-115 Licensed Patents or Pelacarsen Licensed Patents in each case where such infringement would reasonably be expected to have a Material Adverse Effect. Seller shall (i) provide to the Buyer a copy of any written notice of any suspected infringement of any of the Spinraza Licensed Patents, BIIB-115 Licensed Patents, or Pelacarsen Licensed Patents where such infringement would reasonably be expected to have a Material Adverse Effect and all pleadings filed in such action and (ii) notify the Buyer of any material developments in any claim, suit or proceeding resulting from such infringement that are communicated by Biogen or Novartis, as the case may be, to the Seller under Sections 7.4 and 7.5 of the 2012 Biogen License, Sections 7.4 and 7.5 of the 2017 Biogen License, or Section 8.6.1 of the Novartis License or otherwise as soon as practicable and in any event not less than [***] Business Days following such delivery.

(c)          The Seller shall (i) take any and all actions, and prepare, execute, deliver and file any and all agreements, documents and instruments, that it deems to be reasonably necessary to diligently prosecute, preserve and maintain any Spinraza Assigned Patents, Spinraza Licensed Patents, BIIB-115 Licensed Patents, Jointly-Owned Pelacarsen Program Patents, and Pelacarsen Licensed Patents for which it controls the prosecution and maintenance in accordance with Sections 7.2.2(a), 7.2.3, and 7.2.4 of the 2012 Biogen License, Section 7.2.2(a), 7.2.3 and 7.2.4 of the 2017 Biogen License, and Section 8.3.1 and 8.3.2 of the Novartis License, and including payment of maintenance fees or annuities on any such Patent Rights where the failure to so prosecute would reasonably be expected to have a Material Adverse Effect, (ii) prosecute any reasonably necessary corrections, substitutions, reissues, reviews and reexaminations, and any other forms of patent term restoration in any applicable jurisdiction, of any Spinraza Assigned Patents, Spinraza Licensed Patents, BIIB-115 Licensed Patents, Jointly-Owned Pelacarsen Program Patents, or Pelacarsen Licensed Patents for which it controls the prosecution and maintenance in accordance with Sections 7.2.2(a), 7.2.3 and 7.2.4 of the 2012 Biogen License, Sections 7.2.2(a), 7.2.3, and 7.2.4 of the 2017 Biogen License, and Sections 8.3.1 and 8.3.2 of the Novartis License where the failure to so prosecute would reasonably be expected to have a Material Adverse Effect, (iii) diligently enforce and defend any Spinraza Assigned Patents, Spinraza Licensed Patents, BIIB-115 Licensed Patents, Jointly-Owned Pelacarsen Program Patents, and Pelacarsen Licensed Patents for which it controls the defense and enforcement, including by bringing any legal action for infringement or defending any counterclaim of invalidity or unenforceability or action of a Third Party for declaratory judgment of non-infringement or non-interference, in accordance with Section 5.14(b) of this Agreement where the failure to so enforce or defend would reasonably be expected to have a Material Adverse Effect, and (iv) not disclaim or abandon, or fail to take any action necessary or desirable to prevent the disclaimer or abandonment (including through lack of enforcement against Third Party infringers) of any Spinraza Assigned Patents, Spinraza Licensed Patents, BIIB-115 Licensed Patents, Jointly-Owned Pelacarsen Program Patents, and Pelacarsen Licensed Patents for which it controls the prosecution and maintenance in accordance with Sections 7.2.2(a), 7.2.3, and 7.2.4 of the 2012 Biogen License, Sections 7.2.2(a), 7.2.3, and 7.2.4 of the 2017 Biogen License, and Sections 8.3.1 and 8.3.2 of the Novartis License, except as would not reasonably be expected to have a Material Adverse Effect.  During the occurrence and continuance of an SMA RP Control Shift, any of the foregoing actions with respect to any Spinraza Assigned Patents, Spinraza Licensed Patents or BIIB-115 Licensed Patents shall be taken and during the occurrence and continuance of a Pelacarsen RP Control Shift, any of the foregoing actions with respect to any Jointly-Owned Pelacarsen Program Patents or Pelacarsen Licensed Patents shall be taken as reasonably instructed by the Buyer; provided that nothing herein shall require the Seller (or Akcea) to take any action in violation of the applicable License Agreement.  The Seller agrees to keep the Buyer reasonably informed of the status of the prosecution and maintenance under the License Agreements.

(d)          The Buyer shall reimburse the Seller for its reasonable and documented out-of-pocket legal costs and expenses incurred in connection with any enforcement actions taken by the Seller or Akcea pursuant to  Sections 5.14(b)(i)(i), 5.14(b)(ii), 5.14(b)(iii), and 5.14(c)(iii) for which the Seller or Akcea is not entitled to reimbursement by a Licensee as follows: (A) as it relates to the Spinraza Assigned Patents, Spinraza Licensed Patents and BIIB-115 Licensed Patents, (i) for the period prior to January 1, 2028, 25%, (ii) for the period commencing January 1, 2028 and ending when the SMA Royalty Cap is achieved, 45%, and (iii) after the SMA Royalty Cap is achieved, 0%; and (B) as it relates to Jointly-Owned Pelacarsen Program Patents, and Pelacarsen Licensed Patents, 25%, of such costs and expenses.

Section 5.15         Additional Monetizations.  The Seller agrees to notify the Buyer in writing at least [***] days prior to entering into a definitive agreement with a Third Party relating to a Seller Monetization Transaction. In the event the Seller provides a Third Party to a Seller Monetization Transaction with any more extensive, favorable, robust, or otherwise broader informational, inspection, consent, enforcement or other rights than any of those similar rights provided to the Buyer under any of Sections 5.5 (solely with respect to reporting related to the Royalty Products) through 5.12 (the “Enhanced Rights”), the Seller shall, subject to this Section 5.15, upon written request from the Buyer, provide the Buyer within [***] Business Days with a copy of the definitive agreement with a Third Party relating to such Seller Monetization Transaction, subject to redactions of sections not related to the Enhanced Rights, and the Buyer shall elect, by written notice to the Seller provided within [***] Business Days of receipt of such definitive agreement, whether it would like to (i) retain its existing rights under Sections 5.5 through 5.12 hereunder, or (ii) replace its existing rights under Sections 5.5 through 5.12 hereunder with the Enhanced Rights, [***], mutadis mutandis, effective upon the Seller’s receipt of such written notice. If the Buyer does not make an election by written notice within [***] Business Days of receipt of such definitive agreement, the Buyer shall be deemed to have elected to retain its existing rights under Sections 5.5 through 5.12 hereunder. Notwithstanding the foregoing, upon the Buyer’s written request for a copy of the definitive agreement, instead of providing a copy of the definitive agreement, the Seller may elect to deliver to the Buyer (a) a certificate signed by the Chief Executive Officer or Chief Financial Officer of the Seller in which the Seller certifies that the Seller did not provide Enhanced Rights in connection with such Seller Monetization Transaction or (b) a summary of any such Enhanced Rights that the Seller did provide in connection with such Seller Monetization together with a draft amendment to this Agreement memorializing the grant of such Enhanced Rights to the Buyer.  If the Buyer elects to replace its existing rights with the Enhanced Rights, the Seller and the Buyer shall, acting reasonably, enter into an amendment to this Agreement within [***] Business Days of the consummation (or material amendment) of the Seller Monetization Transaction memorializing the replacement of the Buyer’s rights under Sections 5.5 through 5.12 hereunder with such Enhanced Rights, in whole and not in part, mutatis mutandis.  Within [***] Business Days of the consummation (or material amendment) of any Seller Monetization Transaction (or the earlier request of Seller pursuant to Exhibit K), the Seller and the Buyer, each acting reasonably and in good faith, shall also agree upon all then current SMA Royalty Percentages or Pelacarsen Royalty Percentages, as applicable, as determined in accordance with Exhibit K.

Section 5.16         Further Assurances. After the Closing, the Seller and the Buyer agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be reasonably necessary in order to give effect to the transactions contemplated by this Agreement.  Without limiting the foregoing, the Buyer shall ensure that it has sufficient capital to pay the Additional Purchase Price Payments as and when due.

Section 5.17         Intercompany Relationship. The Seller shall cause Akcea (a) to continue to operate the Akcea business in the ordinary course of its business, and to continue to be duly licensed and qualified to do business, and be in corporate good standing, in all material respects, in each jurisdiction necessary to continue to operation in the ordinary course of its business, and (b) to comply in all material respects with its obligations under the Pelacarsen Upstream Licenses and the Novartis License.  [***]. Notwithstanding the foregoing, Akcea may consolidate with, merge with or into, liquidate into, or sell, convey, transfer or lease all or substantially all of its properties and assets to the Seller or any wholly-owned subsidiary of the Seller.

Section 5.18         Tax Matters.

(a)          Notwithstanding anything to the contrary in this Agreement, the Seller and the Buyer shall treat the transactions contemplated by this Agreement as a sale of the Purchased Royalty Payments for United States federal, state, local and non-U.S. Tax purposes. Accordingly, any and all Purchased Royalty Payments made pursuant to the License Agreements after the Closing Date shall be treated as sold to the Buyer for United States federal, state, local and non-U.S. Tax purposes. The parties shall cooperate to effect the foregoing treatment for United States federal, state, local and non-U.S. Tax purposes in the event that, notwithstanding the Biogen Instruction Letters and the Novartis Instruction Letter, any Licensee, any sublicensee or any other Person makes any future remittance of Purchased Royalty Payments to the Seller which the Seller must remit to the Buyer or the Escrow Agent pursuant to Section 5.2(a) of this Agreement.

(b)          All payments to the Seller under this Agreement shall be made without any deduction or withholding for or on account of any Tax unless required by applicable law. Provided that Seller provides the IRS Form W-9 called for by Section 3.5, each of the Buyer and the Seller agree that as of the date hereof there are no United States Federal and State withholding obligations under current law in respect of any payment to the Seller under this Agreement.

(c)          The parties hereto agree not to take any position that is inconsistent with the provisions of this Section 5.18 on any Tax return or in any audit or other administrative or judicial proceeding unless (i) the other party hereto has consented in writing to such actions or (ii) the party hereto that contemplates taking such an inconsistent position has been advised by nationally recognized tax counsel in writing that there is no “reasonable basis” (within the meaning of Treasury Regulation Section 1.6662-3(b)(3)) for the position specified in this Section 5.18. If there is an inquiry by any Governmental Entity of the Seller or the Buyer related to this Section 5.18, the parties hereto shall cooperate with each other in responding to such inquiry in a reasonable manner consistent with this Section 5.18.

Section 6.1          Confidentiality. Except as provided in this Article 6 or otherwise agreed in writing by the parties, the parties hereto agree that, for the term of this Agreement and for [***] thereafter, each party (the “Receiving Party”) shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as provided for in this Agreement (which includes the exercise of any rights or the performance of any obligations hereunder) any information furnished to it by or on behalf of the other party (the “Disclosing Party”) pursuant to this Agreement (such information, “Confidential Information” of the Disclosing Party), except for that portion of such information that:

(a)          was already known to the Receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party;

(b)          was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;

(c)          became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the Receiving Party in breach of this Agreement;

(d)          is independently developed by the Receiving Party or any of its Affiliates, as evidenced by written records, without the use of or reference of the Confidential Information of the Disclosing Party; or

(e)          is subsequently disclosed to the Receiving Party on a non-confidential basis by a Third Party without obligations of confidentiality with respect thereto.

Section 6.2          Authorized Disclosure.

(a)          Either party may disclose Confidential Information with the prior written consent, such consent not to be unreasonably withheld or delayed, of the Disclosing Party or to the extent such disclosure is reasonably necessary in the following situations:

(b)          Notwithstanding the foregoing, in the event the Receiving Party is required to make a disclosure of the Disclosing Party’s Confidential Information pursuant to Section 6.2(a)(i) or  Section 6.2(a)(ii), it will, except where impracticable, give reasonable advance notice to the Disclosing Party of such disclosure and use reasonable efforts to secure confidential treatment of such information. In any event, the Buyer shall not file any patent application based upon or using the Confidential Information of Seller provided hereunder.

Section 7.1          General Indemnity. Subject to Section 7.3, from and after the Closing:

(a)          the Seller hereby agrees to indemnify, defend and hold harmless the Buyer and its Affiliates and its and their directors, managers, trustees, officers, agents and employees (the “Buyer Indemnified Parties”) from, against and in respect of all Losses suffered or incurred by the Buyer Indemnified Parties to the extent arising out of or resulting from (i) any breach of any of the representations or warranties (in each case, when made) of the Seller in this Agreement or (ii) any breach of any of the covenants or agreements of the Seller or Akcea in this Agreement; provided, however, that the foregoing shall exclude any indemnification to any Buyer Indemnified Party to the extent resulting from (x) the gross negligence, willful misconduct, or fraud of any Buyer Indemnified Party or (y) acts or omissions of Seller or any of its Affiliates taken (or not taken) upon written instructions from any Buyer Indemnified Party (unless Seller is otherwise liable for such Losses pursuant to the terms of this Agreement); and

(b)          the Buyer hereby agrees to indemnify, defend and hold harmless the Seller and its Affiliates and its and their directors, officers, agents and employees (“Seller Indemnified Parties”) from, against and in respect of all Losses suffered or incurred by the Seller Indemnified Parties to the extent arising out of or resulting from (i) any breach of any of the representations or warranties (in each case, when made) of the Buyer in this Agreement or (ii) any breach of any of the covenants or agreements of the Buyer in this Agreement; provided, however, that the foregoing shall exclude any indemnification to any Seller Indemnified Party to the extent resulting from (x) the gross negligence, willful misconduct, or fraud of any Seller Indemnified Party or (y) acts or omissions of Buyer or any of its Affiliates taken (or not taken) upon written instructions from any Seller Indemnified Party (unless Buyer is otherwise liable for such Losses pursuant to the terms of this Agreement).

(b)          If any claim, action, suit or proceeding is asserted or instituted by or against a Third Party with respect to which an Indemnified Party intends to claim any Loss under this Article 7, such Indemnified Party shall promptly notify the Indemnifying Party of such claim, action, suit or proceeding and tender to the Indemnifying Party the defense of such claim, action, suit or proceeding.

(c)          A failure by an Indemnified Party to give notice, including a Claim Notice, and to tender the defense of such claim, action, suit or proceeding in a timely manner pursuant to this Section 7.2 shall not limit the obligation of the Indemnifying Party under this Article 7, except to the extent such Indemnifying Party is actually prejudiced thereby.

Section 7.3          Limitations on Liability.

Section 7.4          Third Party Claims. Following the receipt of notice provided by an Indemnified Party pursuant to Section 7.2 of the commencement of any action, suit or proceeding against such Indemnified Party by a Third Party with respect to which such Indemnified Party intends to claim any Loss under this Article 7, an Indemnifying Party shall have the right to defend such claim, at such Indemnifying Party’s expense and with counsel of its choice reasonably satisfactory to the Indemnified Party.  If the Indemnifying Party assumes the defense of such claim, the Indemnified Party shall, at the request of the Indemnifying Party, use commercially reasonable efforts to cooperate in such defense; provided, that the Indemnifying Party shall bear the Indemnified Party’s reasonable out-of-pocket costs and expenses incurred in connection with such cooperation.  So long as the Indemnifying Party is conducting the defense of such claim as provided in this Section 7.4, the Indemnified Party may retain separate co-counsel at its expense and may participate in the defense of such claim, and the Indemnifying Party may consent to the entry of any reasonable Judgment or enter into any reasonable settlement with respect to such claim [***].  In the event the Indemnifying Party does not or ceases to conduct the defense of such claim as so provided, the Indemnified Party may defend against such claim and the Indemnified Party may consent to the entry of any reasonable Judgment or enter into any reasonable settlement with respect to such claim [***].  Further, in the event the Indemnifying Party does not or ceases to conduct the defense of such claim as so provided, (A)  subject to the limitations set forth in Section 7.3, the Indemnifying Party shall reimburse the Indemnified Party promptly and periodically for the reasonable out-of-pocket costs of defending against such claim, including reasonable attorneys’ fees and expenses against reasonably detailed invoices, and (B) the Indemnifying Party shall remain responsible for any Losses the Indemnified Party may suffer as a result of such claim to the full extent provided in this Article 7.

Section 7.5          Exclusive Remedy. Except as set forth in Section 9.10, from and after Closing, the rights of the parties hereto pursuant to (and subject to the conditions of) this Article 7 shall be the sole and exclusive remedy of the parties hereto and their respective Affiliates with respect to any claims (whether based in contract, tort or otherwise) resulting from or relating to any breach of the representations, warranties covenants and agreements made under this Agreement or any certificate, document or instrument delivered hereunder, and each party hereto hereby waives, to the fullest extent permitted under applicable law, and agrees not to assert after Closing, any other claim or action in respect of any such breach.  Notwithstanding the foregoing, claims for common law fraud shall not be waived or limited in any way by this Article 7.

Section 7.6          Tax Treatment for Indemnification Payments. Any indemnification payments made pursuant to this Article 7 will be treated as an adjustment to the Purchase Price for U.S. federal income tax to the fullest extent permitted by applicable law.

Section 8.1          Mutual Termination. This Agreement may be terminated at any time by mutual written agreement of the Buyer and the Seller.

Section 8.2          Automatic Termination. Unless earlier terminated as provided in Section 8.1, this Agreement shall continue in full force and effect until [***] days after such time as none of the Licensees ([***]) are obligated to make any payments to the Buyer in respect of any of the Purchased Royalty Payments, at which point this Agreement shall automatically terminate, except with respect to any rights that shall have accrued prior to such termination. Notwithstanding the foregoing, (A) the Buyer’s rights and Seller’s obligations under this Agreement with respect to Spinraza and BIIB-115, the 2012 Biogen License, the 2017 Biogen License and the Spinraza Upstream Licenses, Spinraza Licensed Patents, Spinraza Assigned Patents and BIIB-115 Licensed Patents shall terminate [***] days after such time as the Buyer has received Purchased SMA Royalty Payments in an amount equal to the SMA Royalty Cap, and (B) the Buyer’s rights and the Seller’s obligations under [***] shall terminate upon the Buyer’s receipt of Purchased Royalty Payments equal to [***] times the Purchase Price paid by the Buyer.

Section 8.3          Survival. Notwithstanding anything to the contrary in this Article 8, the following provisions shall survive termination of this Agreement: Section 2.3 (True Sale), Section 5.1 (Disclosures), Section 5.2 (Payments Received in Error), Section 5.4 (Late Fee), Section 5.7 (Inspections and Audits of Licensee), Article 6 (Confidentiality), Article 7 (Indemnification), this Section 8.3 (Survival) and Article 9 (Miscellaneous). Termination of the Agreement shall not relieve any party of liability in respect of breaches under this Agreement by any party on or prior to termination.

Section 9.1          Notices. All notices and other communications under this Agreement shall be in writing and shall be by email with PDF attachment, courier service or personal delivery to the following addresses, or to such other addresses as shall be designated from time to time by a party hereto in accordance with this Section 9.1:

Section 9.2          Expenses. Except as otherwise provided herein, all fees, costs and expenses (including any legal, accounting and banking fees) incurred in connection with the preparation, negotiation, execution and delivery of this Agreement and to consummate the transactions contemplated hereby shall be paid by the party hereto incurring such fees, costs and expenses.

Section 9.3          Assignment. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Seller or Akcea without the prior written consent of the Buyer; provided that each of the Seller and Akcea may assign this Agreement in its entirety to any Person that acquires all or substantially all of the Seller’s business or Akcea’s business, as applicable, to which this Agreement relates (including, for the avoidance of doubt, all of the Seller’s or Akcea’s (as applicable) right, title and interest in the Royalty Products, Upstream Licenses and License Agreements, and the Spinraza Licensed Patents, BIIB-115 Licensed Patents, and Pelacarsen Licensed Patents, as applicable), whether by merger, sale of assets or otherwise, so long as either such Person assumes all of the obligations of the Seller or Akcea, as applicable, in a writing delivered to the Buyer (in form and substance reasonably acceptable to the Buyer) within [***] Business Days of such closing in which such Person assumes all of the obligations of the Seller or Akcea to the Buyer under this Agreement; provided that if such Person is a Licensee, such Licensee shall, within [***] Business Days of closing, enter into an assumption agreement with, and reasonably acceptable to, the Buyer in which such Licensee assumes all of the obligations of the Seller or Akcea (as applicable) to the Buyer hereunder with respect to the applicable Royalty Products and agrees to pay the Purchased Royalty Payments directly to the Buyer notwithstanding any subsequent termination of the applicable License Agreement by the Licensee. This Agreement as a whole may not be assigned by the Buyer without the prior written consent of the Seller; provided that the Buyer may assign its rights and obligations under this Agreement (a) to an Affiliate of the Buyer (provided that, if the Buyer is assigning any of its obligations to pay the Additional Purchase Price Payments the Buyer shall provide a guarantee of the payment of such Additional Purchase Price Payments in form and substance reasonably acceptable to the Seller) or (b) in its entirety to any third party that acquires all or substantially all the Buyer’s assets, whether by merger, sale of assets or otherwise, provided that (x) within [***] Business Days of closing any such transaction, the Buyer causes such assignee to deliver a writing to the Seller (in form and substance reasonably acceptable to the Seller) in which such Person assumes all of the obligations of the Buyer to the Seller under this Agreement.  Notwithstanding the foregoing, the Buyer may assign its rights but not its obligations under this Agreement without the prior written consent of the Seller; provided that the Buyer promptly notifies the Seller of such assignment. Any purported assignment in violation of this Section 9.3 shall be null and void.

Section 9.4          Amendment and Waiver.

(a)          This Agreement may be amended, modified or supplemented only in a writing signed by each of the parties hereto. Any provision of this Agreement may be waived only in a writing signed by the parties hereto granting such waiver.

(b)          No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. No course of dealing between the parties hereto shall be effective to amend, modify, supplement or waive any provision of this Agreement.

Section 9.5          Entire Agreement. This Agreement, the Exhibits annexed hereto and the Disclosure Schedule constitute the entire understanding between the parties hereto with respect to the subject matter hereof and supersede all other understandings and negotiations with respect thereto.

Section 9.6          No Third Party Beneficiaries. This Agreement is for the sole benefit of the Seller, Akcea and the Buyer and their permitted successors and assigns and nothing herein expressed or implied shall give or be construed to give to any Person, other than the parties hereto and such successors and assigns, any legal or equitable rights hereunder; except that the Indemnified Parties shall be third party beneficiaries of the benefits provided for in Article 7.

Section 9.7          Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

(b)          EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF THE BUYER AND THE SELLER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(c)          EACH PARTY HEREBY JOINTLY AND SEVERALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT DELIVERED HEREUNDER OR IN CONNECTION HEREWITH, OR ANY TRANSACTION ARISING FROM OR CONNECTED TO ANY OF THE FOREGOING.  EACH OF THE PARTIES REPRESENTS THAT THIS WAIVER IS KNOWINGLY, WILLINGLY, AND VOLUNTARILY GIVEN.

Section 9.9          Severability. If any term or provision of this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any situation in any jurisdiction, then, to the extent that the economic and legal substance of the transactions contemplated hereby is not affected in a manner that is materially adverse to either party hereto, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect and the enforceability and validity of the offending term or provision shall not be affected in any other situation or jurisdiction.

Section 9.11         Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Copies of executed counterparts transmitted by telecopy, facsimile or other similar means of electronic transmission, including “PDF,” shall be considered original executed counterparts, provided receipt of such counterparts is confirmed.

Section 9.12        Relationships of the Parties. The relationship between the Buyer and the Seller is solely that of purchaser and seller, and neither the Buyer nor the Seller has any fiduciary or other special relationship with the other party or any of its Affiliates.  This Agreement is not a partnership or similar agreement, and nothing contained herein shall be deemed to constitute the Buyer and the Seller as a partnership, an association, a joint venture or any other kind of entity or legal form for any purposes, including any Tax purposes.  The Buyer and the Seller agree that they shall not take any inconsistent position with respect to such treatment in a filing with any Governmental Entity.